A. Whether the accumulation of reserves for corporate rationalization under Article 16 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3096 of March 25, 1978) is a prior requirement for corporate tax reduction and exemption

(b) If a corporation which has received income deduction for capital increase and carried forward losses due to its profits in the business year and fails to accumulate the reserve for corporate rationalization because there is no remaining balance, the additional collection of the equivalent amount of tax;

A. The provisions of Article 16 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3096, Mar. 25, 1978) concerning the accumulation, use, and restriction on disposal of reserves for corporate rationalization are not the requirements to be implemented first to reduce income tax or corporate tax, but only the requirements after the disposal of profits for the business year in which income tax or corporate tax has been reduced or exempted.

(b) Where a corporation which has received income deduction for capital increase or a loss carried forward in the previous year according to the corporate accounting standards at the time of disposing of its profits in the business year and there is no remaining balance, the equivalent amount of the income deduction for capital increase or decrease under Article 16 of the Regulation of Tax Reduction and Exemption Act shall not be collected additionally on the grounds that it did

(a)Article 16(a) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3096 of March 25, 1978). Article 17 of the same Act

A. Supreme Court Decision 79Nu403 delivered on February 10, 1981, 83Nu407 delivered on May 22, 1984

Co., Ltd.

Head of the Military Tax Office

Gwangju High Court Decision 84Gu121 delivered on June 25, 1985

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

According to the reasoning of the judgment below, since the plaintiff company was a domestic corporation that runs feed manufacturing business as its main business from January 1, 1980 to December 31 of the same year and applied for income deduction of 15,632,675 won in accordance with Article 4-2 of the former Regulation of Tax Reduction and Exemption Act, and obtained income deduction of 14,367,325 won in addition to the amount of income determined at the time of the on-site investigation of the Gwangju regional tax office around October 1981, the above 32,00 won in total for 14,367,325 won in the amount of income deduction of 14,367,325 won in the above business year, and the above 34,321,052 won in the above business year, and the defendant did not make up for losses carried forward for 197,970 won in the above business year since the above 1984's net income for 1984 won in the business year.

The provisions of Article 16 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3096, Mar. 25, 1978) on the accumulation, use, and restriction on disposal of the reserve for corporate rationalization are not the requirement to be performed first for the reduction or exemption of income tax or corporate tax, but the requirement to be performed at the time of disposal of profits for the business year in which income tax or corporate tax is reduced or exempted (referring to the case of party members 79Nu403, Feb. 10, 1981; 83Nu407, May 22, 1984; referring to the case of each subparagraph of Article 83Nu407, Dec. 31, 1981; 100.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Jong-tae (Presiding Justice)