Appropriateness of the decision on the estimation based on the standard income rate for each business type for the remaining amount after deducting some expenses from the total income (negative)

The standard rate of income for each type of business applied to the determination of estimated investigation is calculated to deduct the ratio of income from the total income to deduct the income from the total income, including all expenses required for the income according to the characteristics of the type of business and the enterprise, including all expenses required for the construction business. Therefore, in applying this and determining the tax base and tax amount, applying the standard rate of income for the construction business to the remaining amount obtained by deducting the housing site price which is part of the total income (housing sale price) from the housing construction cost, is ultimately unlawful.

Article 120 of the Income Tax Act, Article 169 of the Enforcement Decree of the Income Tax Act, Article 82 of the Enforcement Rule of the Income

[Judgment of the court below]

Director of the tax office

Seoul High Court Decision 81Gu579 delivered on November 18, 1982

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the plaintiff and the non-party 1, who is his wife, jointly constructed and sold the above 68 households in 1978 and agreed to divide their total profits (each 40% divided and the remaining 20% joint management). Accordingly, the plaintiff and the above non-party 1 shall determine the total amount of 1,175 and 68 households on the ground of non-party 2, non-party 3 and non-party 4, 154 and 1,175 and construct the above 463,80,800,000 won for the total amount of 1,40,000 won for each household, and 1,000,000 won for the above 30,000,000 won for the total amount of 1,40,000 won for each house and 30,000,000 won for the above land and 30,0005,000 won for the above land.

However, the standard rate of income by type of business applicable to the estimation investigation cannot be made pursuant to the provisions of Articles 117 through 119 of the Enforcement Decree of the Income Tax Act due to the reasons under each subparagraph of Article 169(1) of the same Act, and the standard rate of income by type of business applied to the estimation investigation cannot be made because of the reasons under each subparagraph of the same Article of the same Act, shall be the rate investigated and made to deduct it from the total amount of income, including all expenses required for the income according to the type of business and the characteristics of the enterprise, including all expenses required for the income according to the type of business and the characteristics of the enterprise. Therefore, the standard rate of income of construction business applicable to this case shall be calculated to deduct from the total amount of income including all expenses required for the construction business. Thus, the application of the standard rate of income to the remaining amount after deducting the site price from the total amount of income and the remaining amount after deducting the land price which is the business expense from the total amount of income. Thus, the judgment below cannot be reversed without merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jung-soo (Presiding Justice) and Lee Jong-young's Lee Jong-young