The case holding that, in the case of a long-term contract, it is difficult to confirm the cost of construction which was put in place due to the failure of the contractor's account book and the settlement between the parties is made on the premise that the contractor will continue to complete the construction, and if the construction contract was rescinded immediately thereafter, it cannot be said that the contractor confirmed the work progress rate or the contractor's ability to confirm the amount of the revenue of the construction, it cannot be said that the contractor could not determine the amount of the

The case holding that, in the case of a long-term contract, the work progress rate or the contractor's work progress rate and the amount of the revenue is determined by the confirmation of the work progress rate and the contractor's work progress rate cannot be confirmed due to the lack of the contractor's account books, and thus, the settlement of work progress amount between the parties is unclear, and the contractor does not agree to confirm the completed portion and pay the settlement amount based on it, but unilaterally accepted the contractor's request under the premise that the contractor continues to complete the work, and thus it cannot be said that the settlement is confirmed by the settlement thereof. Thus, it is difficult to determine the amount of revenue at the time of the cancellation

Article 17(8) of the former Corporate Tax Act (Amended by Act No. 4803, Dec. 22, 1994; see current Article 40(2) of the Enforcement Decree of the Corporate Tax Act; see current Article 69(2) of the Enforcement Decree of the Corporate Tax Act); Article 37(1) of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 14468, Dec. 31, 1994); Article 15(1) of the former Enforcement Rule of the Corporate Tax Act (Amended by Act No. 492, Mar. 30, 1995; see current Article 34(1)); Article 34(2) (see current Article 34(1) and (3) (see current Article 34(3)); Article 9(2) of the Value-Added Tax Act; Article 22 subparag. 1, 2, and 3 of the Enforcement Decree of the Value-Added Tax Act

[Plaintiff-Appellant] Plaintiff (Attorney Jeong Sung-sung, Counsel for plaintiff-appellant)

Head of tax office

Busan High Court Decision 2000Nu3047 delivered on August 3, 2001

The appeal is dismissed. The costs of appeal are assessed against the defendant.

1. Article 17(8) of the former Corporate Tax Act (amended by Act No. 4803, Dec. 22, 1994); Article 37(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1468, Dec. 31, 1994); Article 15(1), (2), and (3) of the former Enforcement Rule of the Corporate Tax Act (amended by Presidential Decree No. 492, Mar. 30, 195); where a domestic corporation enters into a long-term contract for construction or manufacture, profits and losses for each business year shall be included in the gross income and deductible expenses for the relevant business year; where the ratio of work progress is unclear, the profits and losses for the relevant business year shall be calculated according to the completed portion of supply confirmed by the contractor; where the portion of supply of value-added tax becomes final and conclusive, the amount of supply at the time of supply becomes final and conclusive under Article 9(2) and Article 22 subparag. 3 of the Enforcement Decree of the Value-Added Tax Act;

2. After finding the facts as indicated in its holding, the court below determined that the corporate tax of this case was unlawful on the ground that, in its factual relations, the legal relationship on the origin of the construction project of this case as at the time of cancellation of the construction contract of this case was considerably high enough to determine the maturity and maturity in excess of the previous reported part, and that the corporate tax of this case was unlawful on the ground that the disposition of imposition was not unlawful on the ground that, inasmuch as the value of the construction project was not determined due to the failure to determine the validity of the construction project, the Plaintiff and the contractor, the non-party company did not agree to confirm the completed portion of the construction project and to pay the settlement amount accordingly, in light of the degree of settlement, the settlement process and content thereof, and the situation before and after the construction project of this case, the non-party company was unilaterally accepted the Plaintiff's request on the premise that the construction project was completed.

In light of the above legal provisions in comparison with the evidence of the record, the above recognition and judgment of the court below are just and there are no errors in the misapprehension of legal principles as to gross income amount under the Corporate Tax Act or the proceeds from supply of services under the Value-Added Tax Act.

We cannot accept the allegation in the grounds of appeal.

3. Therefore, the defendant's appeal is dismissed, and all costs of appeal are assessed against the defendant. It is so decided as per Disposition by the assent of all Justices who reviewed the appeal.

Justices Shin Shin-chul (Presiding Justice)