Cho High Court Decision 2015J3491 ( October 06, 2015)

The disposition imposing global income tax is legitimate by deeming the amount deposited in the borrowed account as the omission of income.

The existence of a special circumstance in which the amount deposited in the deposit account may be recognized as a transaction overlapping with the already reported sales or revenues or an individual transaction unrelated to the sales or revenues must be proved by the claimant.

Article 14 of the Framework Act on National Taxes

Article 24 (Calculation of Gross Amount of Income)

2015Guhap5465 Global income and revocation of disposition

StateAA

○ Head of tax office

November 25, 2016

December 16, 2016

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposition of global income tax of KRW 000,00,000 for the year 2008, global income tax of KRW 000,000 for the year 2009, global income tax of KRW 000,000 for the year 2009, global income tax of KRW 000,000 for the year 2010, global income tax of KRW 000,000 for the year 201, global income tax of KRW 000,000 for the year 2011, global income tax of KRW 00,000 for the year 2012, and global income tax of KRW 00,000 for the year 2013 is revoked.

1. Details of the disposition;

A. The Plaintiff has engaged in the medical business in the name of 00-00 of Mari-gu Mari-dong Mari-gu, MaBwon (hereinafter “instant place of business”).

B. After conducting a tax investigation with respect to the Plaintiff, the Defendant: (a) on September 11, 2014, up to the second taxable period of 2013, the cash sales amount of the Plaintiff was directly transferred from the patients or deposited by the employees of the Plaintiff in the accounts of DFC branch D branch in the name of workers of the instant business establishment (hereinafter referred to as “each of the instant Nos. 1 and 2”) and the FFFF branch account opened in the Plaintiff’s name of EFFF branch in the Plaintiff’s name (hereinafter referred to as “third-party account”); (b) on 00 years of global income, including the global income tax base of 00, 000, 000 won of global income tax for 208, 2000 won of global income tax for 10 years of 200, 2000, 2000, 2000 won of global income tax for 10 years of 200, 20000 won of global income tax for 20 years of .

C. The Plaintiff dissatisfied with the instant disposition and filed an objection on November 27, 2014, but was dismissed, and thereafter filed an appeal with the Tax Tribunal on June 25, 2015, but was dismissed on October 6, 2015.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Although there are a large number of deposits that do not constitute cash income among the accounts of the instant business establishment, the Defendant’s public official’s statement that did not contain a specific content of the sales fact and would substantially reduce the actual taxation without clear evidence, recognized it as the Plaintiff’s revenue amount on the basis of the Plaintiff’s confirmation document prepared by the defective intent, and this is an unlawful disposition that did not bear the burden of proof regarding the taxation disposition.

2) In particular, among the entry fees for each of the instant borrowed accounts, the amount paid in cash for KRW 00 million on May 20, 2008 and KRW 00 million on February 5, 2010 that was paid in cash on 24 occasions from the same members, the advance payment and the shortage of the amount of withholding taxes received from the employees, and the amount of money paid directly by the Plaintiff out of the operating funds, etc. Thus, it is unlawful for the Defendant to aggregate the above money to the Plaintiff’s income.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The details of omitted income calculated by the Defendant are as follows:

2) On July 1, 2014, the Plaintiff opened a passbook under the name of his employee and his wife (each of the instant borrowed accounts) and deposited the medical income accrued in the course of operating the instant business, or managed it by directly receiving money from the patients. Moreover, on July 18, 2014, the Plaintiff signed a written confirmation stating that all the amount deposited in the relevant passbook is the medical income amount generated in the instant business establishment, and signed on the written statement stating that it is as follows (Omission).

D. Determination

1) Relevant legal principles

Inasmuch as the tax authority bears the burden of proving the fact of taxation requirement in a lawsuit seeking revocation of a tax imposition disposition, the taxpayer’s account constitutes sales or revenues, and the taxpayer’s taxation requirement fact that the amount of money deposited in the account of a financial institution falls under the category of sales or revenues omitted from the return is a principle. However, the taxpayer’s account may prove that the amount of money deposited in the account of a financial institution constitutes sales or revenues in light of the empirical rule in the specific lawsuit process or indirect facts that can be inferred. In such cases, whether such presumption can be made can be determined by comprehensively taking account of whether the account of a financial institution was used as a principal deposit or management account for sales or revenues, and whether the account has a appearance of sales or revenues, contrary to the proportion of sales or revenues transaction to the account, possibility of mixing sales or revenues with funds for other than sales or revenues, etc. In addition, if the account of a financial institution as a result of the aforementioned various circumstances is established as the principal deposit or management account of a financial institution without any specific type of deposit or revenue, it can be determined that it constitutes an individual account or sales revenue, etc.

(ii) the application of this case;

In light of the above facts and the overall purport of the plaintiff's evidence and arguments, the following circumstances, i.e., (i) if the tax authorities were to prepare a confirmation document stating a certain taxation requirement from the taxpayer during the tax investigation, it cannot readily deny the value of the confirmation document unless there are special circumstances, such as that it is difficult for the plaintiff to use the confirmation document as evidence for specific facts against the will of the originator, or that it is difficult for the plaintiff to use it as evidence. (See, e.g., Supreme Court Decision 2006Du8068, Sept. 25, 2008) The plaintiff deposited the amount of medical income in each of the following 0G accounts, and all of the amount of money deposited in the 0G account were hard to find that the plaintiff's money was insufficient to use it as evidence to prove that it was insufficient for the plaintiff to use it as evidence to prove that it was insufficient for the plaintiff to use it as evidence for the remaining 0G account. The above statement and statement are insufficient to support each of the above facts.

3) Sub-decisions

Therefore, the instant disposition based on the premise that there was an omission in the return of the Plaintiff’s revenue amount is legitimate, and the Plaintiff’s assertion is not accepted.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.