(a) Relationship between Articles 31 and 58 of the Income Tax Act;

(b) Whether Article 113 (1) of the Enforcement Decree of the Income Tax Act is in conflict with Article 58 (1) of the same Act; or

A. Article 31 of the Income Tax Act provides the principle of responding to the revenue cost: Provided, That if the expenses corresponding to the revenue before the current year are finalized in the current year, it is intended to correct the previous expenses by calculating them as the expense for the year of reversion of revenue, and avoid the spread of the procedure of correcting the income tax, and Article 58 of the Income Tax Act provides that the former provision is applied in cases where a loss occurs because the expenses determined under the above provision are more than the revenue, and the latter provision provides for the method of calculating the necessary expenses, and the latter is a special provision on the calculation of the income amount, so

B. Article 58(1) of the Income Tax Act provides that a business operator shall keep. The amount of losses by income generated in calculating the amount of income by income in the current year by the account book kept by the business operator, while Article 113(1) of the Enforcement Decree of the Income Tax Act provides that losses carried forward shall be included in the necessary expenses only in the case of a field investigation decision under Article 118 of the Income Tax Act, and the written investigation decision under Article 119 of the Income Tax Act also provides that losses determined by the Enforcement Decree of the same Act can be included in the necessary expenses. Thus, the provisions of the Enforcement Decree of the same Act do not conflict

(a) Articles 31 and 58 of the Income Tax Act; Article 58(1) of the Enforcement Decree of the Income Tax Act; Article 113(1) of the Enforcement Decree of the Income Tax Act;

[Judgment of the court below]

The head of Dongjak-gu Tax Office (the director of the Southern Tax Office prior to rectification)

Seoul High Court Decision 85Gu417 delivered on June 19, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

As to the ground of appeal by the Plaintiff’s attorney:

1. The court below asserts that the judgment of the court below violated the provisions of Article 31 (2) of the Income Tax Act and misunderstanding the legal principles as to inclusion of losses carried forward in deductible expenses, and that there was an error of disregarding the general principles of

Article 31 (1) of the Income Tax Act provides that the sum of the expenses to be included in the necessary expenses in the calculation of the business income amount shall be the sum of the expenses corresponding to the total income amount in the corresponding year, and Article 31 (2) of the same Act provides that with respect to the expenses corresponding to the total income amount in the corresponding year which are finalized in the corresponding year, only those which are not appropriated in the necessary expenses prior to the corresponding year, shall be considered as the necessary expenses in the corresponding year, and Article 58 (1) of the same Act provides that the losses incurred in the calculation of the income amount by income in the corresponding year according to the books kept and kept by the businessman shall be applied to the income amount by corresponding type and the sum of them shall be made in the calculation of the corresponding tax base by income, among those generated in the corresponding year within 3 years (4 years in the case of a green reporter) of the previous year under the conditions as prescribed by the Presidential Decree.

Article 31 of the Income Tax Act provides that the former expenses shall be calculated at the expense of the year to which the income is attributed and the former expenses shall be calculated at the expense of the year to which the income is attributed and the latter shall be calculated as the necessary expenses of the year to correct the income amount, and Article 58 of the Income Tax Act provides that the former provisions shall apply in cases where the expenses determined under the above provisions are more than the income amount, and the latter shall be determined in accordance with the following provisions.

The court below held that the export loss amount of 600 million won due to Crecil which occurred in the previous business prior to the closure of the plaintiff's business does not correspond to the expenses corresponding to the total income amount of the plaintiff's new business in 1983 as well as the expenses corresponding to the total income amount of the plaintiff's new business in 1983, and because the investigation and decision of the government pursuant to Article 58 of the Income Tax Act, Article 118 and Article 119 of the Enforcement Decree of the same Act is not confirmed, the above decision of the court below is just, and there

2. The theory argues that it is null and void because it limits the scope of losses under Article 58(1) of the Income Tax Act without delegation of this Act, Article 113(1) of the Enforcement Decree of the Income Tax Act.

Article 58 (1) of the Income Tax Act provides that the loss brought forward shall be included in the necessary expenses only when the on-site investigation decision is made under Article 118 of the Income Tax Act, and the written investigation decision under Article 119 of the Income Tax Act is also the same as the above, so the provisions of the Enforcement Decree of the Income Tax Act do not conflict with the mother law, since the loss determined by the Enforcement Decree of the Income Tax Act can be included in the necessary expenses.

3. The theory of lawsuit argues that the non-deductible losses in deductible expenses are subject to taxation, the principle of unity with the purpose of taxation, and the principle of taxpayer’s prohibition of unjust infringement on property rights, but it cannot be adopted as an independent opinion. The arguments are groundless.

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

Justices Kim Jong-chul (Presiding Justice)