[1] The burden of proving that, where a tax assessment is conducted on the omitted income by the on-site investigation decision, the cost corresponding to the omitted income was also omitted (=taxpayer)

[2] In a case where a tax assessment is conducted with respect to omitted income by a field investigation decision, whether the cost corresponding thereto can be determined by the method of estimated investigation (negative)

[1] In a case where a tax authority finds the revenue omitted from the initial return of a corporation by the method of a field investigation, barring special circumstances, such as account books or other documentary evidence that the corresponding purchase cost was separately disbursed, it shall be deemed that the total loss corresponding to the total revenue already included in the deductible expenses. In this case, if a tax authority intends to obtain a deduction because it omitted a report on the expenses corresponding to the omission revenue, it shall assert and prove the omission itself.

[2] In a case where the tax authority determines the tax base and tax amount on the corporation's income through the field investigation method, the tax authority shall not calculate and deduct only the deductible expenses corresponding to the relevant omission portion by the method of the estimation investigation, not the actual investigation.

[1] Article 26 of the Administrative Litigation Act, Article 9 of the Corporate Tax Act, Article 12 Paragraph (2) of the Enforcement Decree of the Corporate Tax Act / [2] Article 32 Paragraph (3) of the Corporate Tax Act, Article 93 Paragraph (1)

[1] [2] Supreme Court Decision 90Nu10179 delivered on July 12, 1991 (Gong1993Sang, 1479) / [1] Supreme Court Decision 91Nu4935 delivered on November 22, 1991 (Gong1992, 343) Supreme Court Decision 91Nu12912 delivered on March 27, 1992 (Gong1992, 1455), Supreme Court Decision 91Nu10695 delivered on July 28, 1992 (Gong192, 2594) / [2] Supreme Court Decision 83Nu271 delivered on December 13, 1983 (Gong1984, 199), Supreme Court Decision 198Nu187175 delivered on November 27, 1986 (Gong1984, 199)

South Young Communications Co., Ltd. (Attorney Park Young-chul, Counsel for the plaintiff-appellant)

Head of Daegu Tax Office

Daegu High Court Decision 97Gu2239 delivered on November 27, 1997

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

We examine the grounds of appeal.

Unless special circumstances exist, such as where the tax authority finds any income omitted in the initial return of a corporation through a field investigation by determining the tax base and amount of tax on the corporation’s income, it shall be deemed that the corresponding purchase cost was separately disbursed as deductible expenses, such as the corresponding purchase cost, etc., were already included in the total deductible expenses corresponding to the total income. In this case, if a taxpayer who seeks to include expenses in deductible expenses seeks to receive deduction on the ground that he/she omitted a report on the expenses corresponding to the omission income was omitted, the taxpayer’s own assertion and proof of the omission was established (see, e.g., Supreme Court Decisions 91Nu10695, Jul. 28, 1992; 91Nu12912, Mar. 27, 1992; 90Nu10179, Jul. 12, 191; 198Nu16, Jul. 196, 197).

In the same purport, the court below rejected the plaintiff's assertion that there was no evidence that the sales cost was separately paid in addition to the omitted purchase price acknowledged by the defendant on the premise that the plaintiff was omitted in sales. Such a measure of the court below is just, and there is no error of law as to the location of the burden of proof and the decision of estimated calculation, such as the theory of lawsuit, and there is no error in the law as to the existence

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

Justices Lee Yong-hun (Presiding Justice)