Cho Jae-2014- Busan District Court-4755 (2.03, 2014)

The entire damages for delay based on a refund execution judgment shall fall under the other income under the Income Tax Act.

Even if a part of the damages for delay was paid directly to the lending institution, this is the repayment of its loan obligation with its own money, so the entire damages for delay based on the repayment execution decision falls under other income under the Income Tax Act.

Article 21 of the Income Tax Act

2014Guhap2366 global income and revocation of disposition

Section AA

00. Head of tax office

March 26, 2015

April 23, 2015

1. The plaintiff's claim is dismissed.

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

The disposition of imposition of global income tax of KRW 000,000,000, imposed on the Plaintiff on October 0, 2014 by the former Defendant of the Republic of Korea on the Plaintiff on October 0, 2014 is revoked.

1. Details of the disposition;

A. BB Co., Ltd. (hereinafter referred to as a "non-party company") entered into a contract on June 0, 2005 for the construction ofCC (hereinafter referred to as "CC construction"), 00,000 apartments (hereinafter referred to as "multi-family housing of this case"), which were executed by DD Construction Co., Ltd. (hereinafter referred to as "the apartment of this case"), with the total sale price of 00,000,000,000 above above 00 and above 000,000,000, and the secured creditor as prospective occupants of the apartment of this case. (b) On October 0, 2005, the Plaintiff entered into a contract for the sale of 00,000,000 won and the total sale price of 00,000,0000,0000 won and 00,0000,0000,0000 won and 00,000,0000,000.

However, when the Plaintiff filed a claim for refund against the non-party company as the seller for sale in lots, the non-party company rejected the refund on the ground that the non-party company does not constitute a normal contractor under the terms and conditions of main multi-unit sale guarantee attached to the contract for sale in lots. Accordingly, the Plaintiff filed a lawsuit seeking refund against the non-party company with the district court 00.0 million won and the above court rendered a judgment on October 0, 2012 that "the non-party company shall pay to the Plaintiff the amount calculated at the rate of 20% per annum from October 0, 2011 to the date of full payment" (hereinafter referred to as "the decision on the execution of refund in this case"). The non-party company appealed against this and appealed, but the judgment became final and conclusive as the appeal was dismissed.

D. On October 0, 2012, the Defendant paid 00,000,000 won for delay compensation for the amount of 00,000,000 won from the non-party company (hereinafter “instant delay compensation”). This is the penalty and compensation that the Plaintiff received due to the contravention or cancellation of the contract under Article 21(1)10 of the former Income Tax Act (amended by Act No. 12852, Dec. 23, 2014; hereinafter “former Income Tax Act”) on the ground that the damages for delay in this case were other income and were omitted from the amount of global income by failing to report it as other income (hereinafter “instant disposition”). The Defendant imposed and notified the amount of 00,000,000 won for global income tax for 20 years (hereinafter “the instant disposition”).

E. On October 0, 2014, the Plaintiff asserted that all income was faithfully reported and paid in full, and thereafter filed an appeal against the instant disposition with the Tax Tribunal for the cancellation lawsuit on October 0, 2014. The Tax Tribunal dismissed the said appeal on October 0, 2014 on the ground that the instant damages for delay constituted other income under the former Income Tax Act and constitutes the subject of reporting.

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 3, Eul evidence 1 and 2 (including satisfy numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Of the money paid by the Plaintiff to CC Construction as the sale price of this case, KRW 00,00,000 out of the total amount of 00,000,000,000,000 which was paid by the EE Bank. The non-party company withheld at source the total amount of 00,000,000,000 won of income tax and local income tax on the damages for delay in this case, which had been liable to pay in accordance with the refund performance decision of this case, and paid only KRW 00,000,000,000, which is the balance, to the Plaintiff rather than the Plaintiff. Accordingly, the Plaintiff’s income should be revoked by considering the Plaintiff’s income as the total amount of 00,000,000 won, excluding the above KRW 00,000,000,000, which was directly paid by the Plaintiff as the sale price of this case. However, the Plaintiff’s income tax should be revoked by considering the Plaintiff’s income as the entire amount of this case.

(b) Fact of recognition;

1) Upon the pronouncement of the instant refund performance ruling, the Nonparty Company paid KRW 00,000,000 (principal KRW 000,000,000,000 and KRW 000,000,000,000,000,000 in total on October 0, 2012, and paid KRW 00,000,000,000 in income tax on the instant damages for delay as well as local income tax, and paid KRW 0,00,00,00 in lieu of the Plaintiff to the EE Bank.

2) On October 2012, the Plaintiff: (a) drafted a certificate of subrogation to the effect that the Plaintiff received KRW 000,000,000 from the non-party company the amount of subrogated payment for the instant sold goods as the judgment of the instant refund performance; and (b) written the “written consent to receive the amount of subrogated payment” to the effect that the said amount would directly repay the Plaintiff’s interest and interest of KRW 00,000,000 to the EE bank.

[Ground of recognition] Gap evidence Nos. 1, 3, Eul evidence Nos. 1 and 2, each fact inquiry result, the purport of the whole pleadings

C. Determination

According to the above facts, the right to receive the sale deposit and its delay damages according to the refund performance decision of this case is the plaintiff, and the non-party company paid part of the above judgment amount to the EE bank is merely a substitute payment of the plaintiff's debt to the EE bank. Therefore, even if the plaintiff directly paid part of the sale deposit and its delay damages to the EE bank due to the circumstance that the plaintiff received a partial loan from the EE bank, it does not differ from the repayment of the plaintiff's obligation to the financial institution to the plaintiff. Thus, the damages for delay based on the above refund performance decision constitutes the plaintiff's other income under Article 21 (1) 10 of the former Income Tax Act. Therefore, the disposition of this case where the plaintiff imposed the comprehensive income tax on the whole damages for delay on the plaintiff on the premise that the damages for delay of this case is the plaintiff's other income is reasonable.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.