Supreme Court Decision 2012Du24344 (No. 29, 2015)

early 209Gu2276 (2010.05)

If the amount actually recovered until the date of disposition falls short of the principal, the total amount of interest income shall not be included.

(Reversal) There is considerable room to view that the claim of this case was objectively and objectively impossible to recover its entire amount at the time of the instant disposition, and since the amount actually recovered immediately after the instant disposition falls short of the principal, the total amount of interest income shall be deemed nonexistent.

Articles 16 and 39 of the former Income Tax Act, etc.

2015Nu12 Revocation of Disposition of Imposing global income tax, etc.

○ ○

○ Head of tax office

Daegu District Court Decision 2010Guhap1073 Decided November 17, 2010

October 16, 2015

November 20, 2015

1. The judgment of the first instance, including the Plaintiff’s claim that has been exchanged before the remand, shall be modified as follows:

A. The Defendant’s imposition of global income tax of KRW 49,668,860 for the year 2006 against the Plaintiff on March 1, 2009 and the imposition of global income tax of KRW 99,968,910 for the year 2007 against the Plaintiff, each of which exceeds KRW 1,867,980 for the imposition of global income tax of KRW 99,968,910 for the year 2007.

B. The plaintiff's remaining claims that were exchanged before the remand are dismissed.

2. All costs of the lawsuit shall be borne by the defendant.

The decision of the court of first instance is revoked. The defendant sought the revocation of each disposition of KRW 49,68,860 on March 1, 2009 against the plaintiff on January 5, 201 and KRW 9,968,910 on global income for the year 2007 (Provided, That the plaintiff, at the court of first instance, sought the revocation of the disposition of KRW 233,796,590 on global income for the year 2006 and KRW 219,393,780 on global income for the year 2007, KRW 208, KRW 960 on global income for the year 206, KRW 208, KRW 960 on global income for the year 206, KRW 960 on global income for the year 206, KRW 960 on global income for the year 206, KRW 93,780 on January 5, 2010.

1. Details of the disposition;

A. In the course of investigating KimA as a person suspected of evading tax payment in arrears, the director of the Daegu Regional Tax Office confirmed that the Plaintiff loaned KRW 1.7 billion to SongB over four occasions from April 26, 2004 to December 28, 2004, and KRW 3.679 billion over one time from August 22, 2006 to December 11, 2007, and then notified the Defendant of the amount of KRW 1.67 billion from 2004 to 2007 [the amount of KRW 6.6 billion from 2007, KRW 3.6 billion from 205 billion from 207, KRW 400,000 to 3.6 billion from 200,000 from 207, KRW 4.6 billion from 200,000 to 3.6 billion from 205 billion from 200,000 won from 205.

"The defendant, on March 1, 2009, issued a revised notice of correction to the plaintiff on March 1, 2009 (hereinafter "the previous disposition in this case"). On May 25, 2009, the tax Tribunal filed a request for adjudication on May 2009, 783,30,360 won (66,830,360 won belonging to the year 2004, 263,282,240 won belonging to the year 2005, 2396,590 won belonging to the year 2006, and 219,393,780 won belonging to the year 2007). The plaintiff's request for adjudication on May 25, 2009, the Tax Tribunal dismissed the amount of interest income accrued to the plaintiff's 690,000,000 won and the remaining amount of interest income accrued to the plaintiff's 98,200,000 won.

D. Meanwhile, on January 5, 2010, the Defendant imposed the global income tax of 2007 KRW 26,075,437 on the Plaintiff’s 207 upon the notice of the global income tax of 209 KRW 700,000,000 for KRW 26,075,437 and KRW 221,261,760 (=26,075,437-4,813,671) upon the Plaintiff’s 206.7 billion after the notice of the global income tax of 207 KRW 9,70,000,000 for KRW 506,00,000 for KRW 506,00,000 for KRW 265,00,000,000 for KRW 360,000,000 for KRW 967,00,000,00 for KRW 361636,79.37.

Gu Sector

Amount of previous disposition tax

Reduction and Correction Tax Amount

The remaining tax amount

Reversion to the year 2006

233,796,590

184,127,730

49,668,860

Reversion to the year 2007

191,182,460

91,213,550

9,968,910

Consolidateds

424,979,050

275,341,280

149,637,770

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful on the following grounds.

1) Since the money that the Plaintiff paid to SongB (the actual obligor) is an investment loan, not a loan, the amount recovered from SongB is only the collection of the investment principal, not interest income.

2) Even if the money paid as above was a loan, 4150 million won, which was deducted as interest income, is not interest income as much as it was not actually received as interest, and furthermore, prior to the Defendant’s instant disposition, the above loan claim constitutes a claim that cannot be recovered under Article 51(7) of the Enforcement Decree of the Income Tax Act, and thus, it was impossible to recover the principal and interest, and the principal and part was not recovered, and thus, it shall be deemed that there was no interest income pursuant to the above Enforcement Decree.

(b) Related statutes;

It is as stated in the "Annexed Acts and subordinate statutes".

(1) The plaintiff, who is the actual manager of the ○○ Housing Co., Ltd. (the representative director BB, hereinafter referred to as the "○ Housing"), has to lend a total of KRW 3170 million (hereinafter referred to as the "the amount of this case") 11 times as stated in the statement of the contents of this case and the loan certificate, and the plaintiff has actually paid KRW 2.5 billion after deducting KRW 415 million from the prior interest, 400 million. The plaintiff was paid KRW 11 million. The plaintiff, who is the plaintiff and the debtor as the plaintiff, and the debtor as the ○○ Housing, received KRW 11,000,000,000,000 after deducting KRW 415,000,000,000,000,000,000 won (the amount of this case and the statement of the loan certificate: KRW 5,000).

2) With respect to the contents of each of the above loans offered as collateral, the Plaintiff was provided as collateral the ○○○-gun, ○○○○-gun, ○○○○○, and buildings completed on the ○○-gun, ○○○, and its ground (hereinafter “the instant ○○-ri land and building”) and the ○○○○, ○○-gun, ○○, ○○-si, ○○○○, and other premises (hereinafter “the instant △△-ri land”).

"3) Meanwhile, on August 23, 2006, the Plaintiff prepared an investment contract between SongCC and the business owner, the investor as the Plaintiff, the investment company as the Plaintiff, and the investment company as the ○○ House project to implement on the ground of the instant ○○○ Land. The main contents of the investment contract are as follows (hereinafter referred to as “A” in the contents of the said investment contract are as follows: “B”; “B” refers to the Plaintiff; and “B” refers to the Plaintiff [main contents of the investment contract]

Article 3 (Distribution of Profits)

By entering into an investment contract with B, A distributes 20% of the profit of A to B. In this regard, A and B will discuss the distribution of profit after accurate settlement.

Article VI(1) (Investment Amount in First Instance)

B shall pay from August 23, 2006 to the first investment amount of KRW 1,00,000,000 for the electric power resource housing business of Party A, and the date of payment shall be determined by mutual agreement.

Article VI(2) (Investment Amount in Second Instance)

Eul recognizes the material cost imported from Canada as secondary investment, and pays 1,030,000.00 won for the secondary investment from August 31, 2006 to L/COEN in order, and the date of payment shall be determined by mutual agreement in accordance with the schedule of the purchase of materials.

Article VI(3) (Investment Amount in Third Instance)

B shall recognize the amount required for the construction of ○○ House with the exception of the first and second investments (2,030.00,000 won), as the third investments, and support the investment to A, and the date of payment shall be determined by mutual agreement.

Article 7 (Compensation for Damages)

When Gap and Eul are unable to pay the profit distribution amount to Eul due to the failure to pay the profit distribution amount to Eul for the electric source housing business, Gap and Eul shall settle the accounts, and when the profit amount is not generated as a result of the settlement of accounts, Eul shall not distribute the profit amount to Eul, Eul shall not be liable for any compensation and compensation to Gap, and Eul shall not be requested for any compensation and compensation.

Provided, That the return of the amount of investment may be requested.

4) With respect to the instant claim from SongCC, the Plaintiff recovered respectively KRW 10 billion on March 28, 2007, and KRW 716 billion on June 15, 2007, respectively.

5) On December 27, 2007, SongCC sold the instant land at KRW 3 billion to KimD, the Plaintiff’s intermediary, the Plaintiff’s form of sale, and KimD entered into a sales contract with the content that KRW 1.3 billion out of KRW 3 billion was succeeded to a bank loan, and that KRW 1.7 billion was paid in lieu of the Plaintiff, and that SongCC would pay the remainder of the real estate at KRW 1.7 billion in lieu of the Plaintiff.

6) During the period from August 23, 2006 to June 15, 2007, SongB borrowed money from the Plaintiff during the construction of the instant tree house on the instant land from August 23, 2006 (see tea). Of these, on March 28, 2007, some of the amount of KRW 110 million and KRW 716 million as of June 15, 2007 were paid in cash, and the remainder of the loan shall be repaid in lieu of the loan.

7) However, inasmuch as SongCC did not release the remaining rights established on the instant land of △△△△, the Plaintiff applied for a voluntary auction on the instant land of △△△△ on March 20, 2008 and received dividends of KRW 1123 billion on April 27, 2009.

"8) At the time of March 1, 2009 when the Defendant rendered the instant disposition, SongCC owned and operated ○○ Housing, and owned ○○○○○○○○○○-dong, ○○○○○○○-dong Building (hereinafter referred to as “Seoul △△△ Building”) on the ground of △△○-dong, and 9) on the application of the creditor ○○ Capital Co., Ltd around October 16, 2008, the creditor ○○ Capital Co., Ltd. applied for each compulsory auction on or around November 18, 2008, and each of the above applications for auction was withdrawn on May 1, 2009 and on the 6th of the same month.

10) Since then on May 13, 2009, with respect to the building in △△△, a voluntary auction was conducted upon the creditor’s application by the ○ Agricultural Cooperative and sold to a third party around April 23, 2010, but there was no money distributed to the plaintiff in the auction procedure.

11) The Plaintiff sold the instant land and most of the instant water, which the Plaintiff received as a security in relation to the instant claim, to a third party, voluntarily auctioned from January 2008 to June 201, and sold to the third party, but there was no money distributed to the Plaintiff in the said auction procedure.

12) The ○○ Housing was closed on January 2007, 2007, with the pressure of funds to purchase the building in △△△△△, and eventually, ○○ Housing was closed on March 3, 2010 and 23.

13) On March 1, 2009, the Defendant issued to the Plaintiff comprehensive income tax of KRW 23,796,590, and KRW 219,393,780, and KRW 2000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00,000,00,000,000,000,000,000,000,000,000,00,00,000,00,00.

D. Determination

1) Determination on the first argument

In determining the nature of the funds of this case paid by the Plaintiff to SongCC, the terms and conditions of the loan agreement and the details of the loan return should be determined by actual terms and conditions. In order to regard the funds of this case as the investment fund, the Plaintiff must agree to share losses or benefits arising from the investment in the business after investing in the business of SongCC. The following circumstances revealed by the facts of recognition of the above paragraph (c) and the aforementioned evidence are as follows: ① receipt of the loan certificate by specifically stipulating the interest, interest rate, repayment period, and collateral security each time the Plaintiff pays the funds to SongCC; ② The SongCC actually provides security to the Plaintiff according to the loan certificate; ③ there was no procedure such as settlement of profits and losses of the business before returning the funds to the Plaintiff; ④ The Plaintiff did not request the Plaintiff to return the funds of this case to the Plaintiff, and ④ it is difficult to say that the funds of this case were distributed to the Plaintiff, not to mention the funds of this case, but to have been distributed to the Plaintiff under Article 7 of the Investment Contract.

Therefore, the other plaintiff's above assertion is without merit.

2) Judgment on the second argument

(A) Article 39(1) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same shall apply) provides that “the total amount of interest income and necessary expenses of a resident for each year shall be the year including the date when the total amount of income and necessary expenses are determined.” Article 45 subparag. 9-2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; hereinafter the same shall apply) provides that “if interest income and expenses of a non-business loan are not returned to the Supreme Court; if interest income and expenses of a resident are not returned to the Supreme Court; if interest income and expenses of a non-business loan are not recovered from the total amount of interest income and expenses of a debtor’s tax base and expenses are not recovered from the total amount of interest income and expenses of a non-business loan under Article 51(7) of the former Enforcement Decree of the Income Tax Act, it shall be determined based on the amount recovered from such tax base and expenses.”

In addition, in the case of prior interest deduction, the receipt date of the interest is the agreed date, if there is an agreement on the date of repayment of the principal, and if there is no agreement, it shall be deemed the actual repayment date of the principal, and if there is an interest income, it shall be determined depending on whether the interest income has been actually realized. Therefore, in the case of repayment of the amount which falls short of the principal even when there is no possibility of repayment of the remaining bonds, it shall not be deemed that the interest income

B) Comprehensively taking account of the aforementioned facts and the purport of the arguments, the Plaintiff: (a) provided the instant ○○○ and the instant △△△ Group land as collateral to secure the instant claim; (b) applied for voluntary auction on March 20, 208; (c) received dividends of KRW 1123 million on April 27, 2009; (d) was not paid at all during the voluntary auction proceeding from January 2008 to June 2010; (e) 2, 3,000,000,000,000 KRW 2,000,000 KRW 6,000,000,000 KRW 36,000,000,000 KRW 96,000,000,00 KRW 1,67,000,000,000,000 KRW 96,000,000,000,000.

Examining these facts in light of the legal principles as seen earlier, since SongCC, SongB, or ○○ Construction, as of March 1, 2009, as of March 1, 2009, deemed that creditors including the Plaintiff, had no sufficient means to repay a large amount of debt, the Plaintiff’s claim in this case was objectively and objectively apparent that it was impossible to recover the entire amount at the time of the instant disposition. In this case, immediately after the instant disposition, the Plaintiff’s total amount of KRW 2,00,000,000 (=21,000,000 won on March 28, 2007 + KRW 716 million on June 15, 2007 + The principal amount of KRW 112,300,000 on April 27, 2009, including the Plaintiff’s interest income amount of KRW 2,500,000,000,000,000,000,000.

C) On this issue, the defendant should determine whether there are interest income from non-business loans depending on individual loan claims. Thus, if there are claims for loans already recovered and extinguished at the time of the final return on tax base or the determination and correction of tax base and amount of tax among multiple loans, such claims shall be deemed as interest income, barring special circumstances. Thus, the plaintiff's claim in this case constitutes several loan claims, and the plaintiff's interest income is deemed as interest income for loans already recovered and extinguished at the time of the final return on tax base or the determination and correction of tax base and amount of tax, and the disposition in this case is lawful as to interest income of KRW 140,000,000 and interest income of KRW 227,50,000,000 belonging to the year 207.

In full view of the following facts: (a) the Plaintiff lent money over 11 times, even though the Plaintiff made an investment contract for the ○○ Housing Project to be implemented on the ground of the instant land with SongCC; and (b) lent money to the Plaintiff; (c) according to the terms and conditions of the investment contract, the Plaintiff paid the money several times, including first, second, and third, depending on the content of the investment contract; (d) the same security was established and executed for the entire loan; and (e) the collected money was appropriated for the entire loan; and (e) the repayment was made without specifying the specific loan. In light of the above, it is reasonable to deem the instant credit as a single bond under a single contract.

Therefore, the defendant's above assertion that the plaintiff's claim of this case is several loans is without merit.

3) Sub-decisions

Ultimately, the Plaintiff’s claim of this case is a single claim, and there is no interest income accrued from the Plaintiff as it constitutes an irrecoverable claim under Article 51(7) of the former Enforcement Decree of the Income Tax Act at the time of the instant disposition. Thus, the Defendant’s disposition of this case, which regarded the claim of this case as 11 individual loan claims and imposed a comprehensive income tax on the interest portion of the part of the loan claims, is unlawful. However, the Plaintiff’s disposition of this case is unlawful. However, the amount of KRW 9,968,910, the global income tax for which 2007 belonged to the disposition of this case, included KRW 1,867,980, which was increased by the income recognized by ○○○ located separately from the interest income on the claim of this case.

Therefore, among the instant dispositions, the Defendant’s imposition of global income tax of KRW 49,668,860 on March 1, 2009 against the Plaintiff on March 1, 2006 and the imposition of global income tax of KRW 9,968,910 on January 5, 2010 on the Plaintiff and KRW 1,867,980 on the global income tax of KRW 2007 on the Plaintiff should be revoked.

3. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of global income tax for the year 2006 among the disposition of this case is justified. The plaintiff's claim for revocation of the disposition of global income tax for the year 2007, which was changed to exchange in the trial, is accepted within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. The plaintiff's appeal as to the claim for revocation of the disposition of global income tax for the year 2006, and the judgment of the court of first instance, including the plaintiff's claim changed to exchange in the trial before remand, was accepted, and the defendant's decision of March 1, 2009 against the plaintiff on January 5, 2010, "the disposition of imposition of global income tax for the year 2006, which was 49,668,910 won, which was 207, which was changed to the original judgment, shall be dismissed as the judgment of the court of first instance as the changed order of the plaintiff's appeal."