Evidence of the Certificate

It is difficult to see that the confirmation document has been prepared against the will of the originator because there are no particular circumstances such as the detailed descriptions of the amount illegally appropriated in each item, such as entertainment expenses, and the forced preparation of a confirmation document.

The contents of the decision shall be the same as attached.

1. All of the plaintiff's claims are dismissed.

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

The Defendant’s imposition of KRW 21,703,420 and corporate tax of KRW 85,96,110 for the year 2002 and corporate tax of KRW 85,96,110 for the Plaintiff on August 1, 2007, and the notice of change in income amount on August 6, 2007 (income amount of KRW 96,69,060 for the income amount of KRW 101,117,741, KRW 83,26,547, KRW 85,758,80 for the year 2005, KRW 24,449,630 for the income amount of KRW 96,60 for the year 2002, and KRW 101,17,741, KRW 26,547 for the year 204) shall be revoked.

1. Circumstances of the disposition;

A. The Plaintiff is a juristic person established on June 26, 1964, which is currently engaged in real estate rental business, and the representative director is registered as KimB, and the largest shareholder is the de facto manager.

B. From 2002 to 2006, the Plaintiff purchased art works worth KRW 3.1 billion (hereinafter referred to as “art works of this case”), and on December 31, 2002, the Plaintiff made an investment in kind in △△ Group Co., Ltd. (hereinafter referred to as “△ Group”) with art works worth KRW 757,552,41 in total as its subsidiaries.

C. From June 4, 2007 to June 28, 2007, the defendant conducted a tax investigation with the plaintiff. The defendant considers the art works of this case as unrelated assets to its business, and excluded the interest paid in 346,369,434 won from deductible expenses, and also reported and paid the amount of 491,291,778 won in total, including the entertainment expenses used by the largestA for its personal purpose, and 350,000,291,778 won in special bonus of 2006 to the 360,000,000,000,000 won in deductible expenses of 341,291,778 won in total, 200,000 won in total, 206, 160, 207, 207, 360, 406, 207, 207, 209, 865, 106, 297, 10.

D. The plaintiff is dissatisfied with each of the dispositions listed in paragraph (3) (hereinafter referred to as "each of the dispositions in this case"). The plaintiff filed an appeal on February 22, 2008 after filing an objection on November 2, 2007, but the above appeal was dismissed on October 20, 2008 (However, the contents of the appeal include any disposition other than each of the dispositions in this case, and the part of the claim for revocation of the disposition for the imposition of value-added tax was cited).

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 to 3 (including provisional number), the purport of the whole pleadings

2. Whether each of the instant taxation dispositions and notice of change in the amount of income is legitimate

A. The plaintiff's assertion

The plaintiff seems to be unlawful for the following reasons.

① The Plaintiff purchased the instant art works for a new entrepreneur’s art gallery service business, and whether it is a rent for business should be determined by the corporate necessity or the necessity for income-generating. Here, it should be deemed that the instant art works cannot be excluded from the assets for future business or future income-generating. In addition, since there is no legal fiction regarding the retention period, etc. unlike real estate, the objective use at the time of acquisition should be determined by the criteria for determining the objective use.

② The confirmation document prepared by KimB, the representative director of the Plaintiff, shall be conducted differently from the facts to conclude the tax investigation. Of the expenses excluded from the deductible expenses, part of the entertainment expenses, such as meal expenses for business consultation (380,600 won on November 30, 2002) for the establishment and operation of the London Metal Exchange (LME) designated warehouse, among the expenses that the Defendant excluded from the deductible expenses, totaling 5,974,650 won, such as meal expenses with golf practice range instructors, totaling 5,974,650 won, and maximum AA, participating in the Japan New Chuncheon Management Competition (3,366,750 on January 20, 200), part of travel and transportation expenses, including travel expenses, and the total of education and training expenses for each class of the participation expenses in the new Chuncheon Management Competition in Japan, should be deemed to be related to the Plaintiff’s business.

③ Since the Plaintiff’s art works, among the instant art works, did not require the acquisition cost, there is no room for applying Article 28(1)4 of the Corporate Tax Act even if they are non-business assets.

(b) Related statutes;

It shall be as shown in the attached Form.

(c) Fact of recognition;

(1) On April 11, 2003, the Plaintiff amended the articles of incorporation to add performance and profit-making business to the purpose of business, and around that time the Plaintiff added art gallery service business to the category of business.

(2) In 2005, the Plaintiff, the largest shareholder, purchased 74-1 and 65,430 square meters of ○○○○○○-gun, ○○○○○, and 7 lots.

(3) The plaintiff's representative director KimB did not start a site or building construction related to the construction of the art gallery on June 27, 2007 in the above tax investigation process. The plaintiff's business plan to establish the art gallery on the above real estate or internal documents related thereto were written or not able to be submitted, and 2. 64,274,50 out of the amount included in the entertainment expenses for the year 2002-206-200, 85, 78, 947, 60, 208, 205, 207, 205, 206, 207, 205, 206, 205, 206, 207, 2005, 206, 2005, 206, 207, 306, 205, 206, 3867, 356, 2010.

(4) After the completion of the tax investigation, the Plaintiff submitted defense materials related to the instant art works, entertainment expenses, etc. to the Tax Tribunal, which must be from April 10, 2008.

[Reasons for Recognition] Facts without dispute, each evidence mentioned above, part of Gap evidence No. 5, witness Kim Yong-jin's testimony, the purport of whole pleadings

D. Determination

(1) Generally, the burden of proof of the facts requiring taxation in a tax lawsuit is a taxation authority, but considering that most of the tax data in tax practice are not easy to collect in the taxpayer’s control area, it cannot be readily concluded that the pertinent tax disposition is an unlawful disposition that has not been satisfied unless the other party proves that there are special circumstances where the pertinent facts cannot be applied to the pertinent facts in question, unless it is proved that the facts alleged in light of the empirical rule in the specific litigation process are presumed to be taxable. (See Supreme Court Decision 97Nu9895, Mar. 4, 1998)

(2) Determination as to the assertion

According to Articles 28(1)4(a) and 27 subparag. 1 of the former Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006), and Article 49(1)2(a) and (c) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19815 of Dec. 30, 2006), the amount calculated as prescribed by Presidential Decree among the interest on loans paid by a domestic corporation to the domestic corporation that acquired or held assets not directly used for its business for each business year shall not be included in deductible expenses.

In the instant case, it is reasonable to view that the instant art works are assets not directly used for the Plaintiff’s business, and the mere fact that the Plaintiff added performance and profit-making business to business registration to the art gallery and added business registration to the art gallery is insufficient to establish the said recognition after considering the following circumstances, i.e., (i) even if the Plaintiff purchased the land, it is difficult to deem that the Plaintiff acquired it; (ii) there is no specific material to deem that the Plaintiff is preparing for the establishment of the art gallery; (iii) the Plaintiff’s representative director KimB confirmed that there is no timely preparation for the business plan related to the establishment of the art gallery; and (iv) the KimB explicitly stated that the art works purchased by △B are purchased regardless of the business affairs during the course of the tax investigation into the art works purchased by △ Group; and (iii) the art works in this case are not directly used for the Plaintiff’s business affairs. In addition, the Plaintiff’s mere fact that the Plaintiff was consulted with the accounting firm for financial and accounting review of the establishment of the art gallery, and that requested the Japan’s art gallery to provide specific materials.

Therefore, this part of the plaintiff's assertion that art works of this case are assets used by the plaintiff for the plaintiff's business is without merit.

(3) Judgment on the argument

Unless special circumstances exist, such as that if a tax authority received a written confirmation from a taxpayer that a certain part of a transaction is a processing transaction during the course of a tax investigation, it is difficult for the tax authority to readily deny the evidence of such written confirmation solely based on the evidence of the fact that such written confirmation was forced against the intent of the originator or that it is difficult to use it as supporting material for the specific fact due to insufficient details (see Supreme Court Decision 2001Du2560, Dec. 6, 2002).

In this case, it is found that the plaintiff unfairly included entertainment expenses, welfare expenses, travel expenses, transportation expenses, education and training expenses, etc. in the course of the defendant's tax investigation against the plaintiff. Accordingly, KimB, the representative director of the plaintiff, was found to have been included in the expenses based on such expenses and issued a written confirmation that the defendant was included in the plaintiff's losses even though the leastAB personally paid each of the above expenses to the defendant. The above written confirmation contains details of entertainment expenses, welfare expenses, travel expenses, transportation expenses, education and training expenses, etc. as mentioned above, and there is no special circumstance such as that KimB forced the above written confirmation, it can be sufficiently recognized that the plaintiff unfairly included entertainment expenses, welfare expenses, travel expenses, education and training expenses, etc. in light of the above legal principles, in light of the above legal principles, the plaintiff can be found to have sufficiently counted the fact that the above written evidence No. 5, part of the witness Kim Jin's testimony against them was submitted after the written confirmation according to his intention, and some testimony by the witness KimB was not included in the above No. 17 or No.

Therefore, the plaintiff's assertion on this part is without merit.

(4) Judgment on the assertion

Among the art works of this case, the plaintiff paid the expenses for acquiring the art works that the plaintiff invested in kind in Dogdo. Thus, the plaintiff's assertion on this part is without merit on different premise.

3. Conclusion

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