Cho High Court Decision 2010Du0768 ( November 09, 2010)

It is legitimate to investigate and determine the amount of money deposited in the financial account and determine the sales.

In the field investigation, there is no special restriction in a way that can be objectively based on the method of distributing actual income. Therefore, determining the sales of a taxpayer by investigating the amount deposited in the financial institution account of the taxpayer is a objective and lawful field investigation method.

Article 21 of the Value-Added Tax Act

2011Revocation of revocation of the imposition of value-added tax

XX

Director of the District Office

August 24, 2011

September 21, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of value-added tax for the first term of July 13, 2009 against the Plaintiff, KRW 3,995,90 for the first term of 2004, KRW 5,515,850 for the second term of 2004, KRW 6,227,830 for the value-added tax for the second term of 205, KRW 3,438,320 for the second term of 271 for the year 2005, KRW 3,438,320 for the value-added tax for the 271st 205, KRW 4,979,780 for the 171st 206, and KRW 3,103,430 for the second term of 206 shall be revoked.

1. Details of the disposition;

A. During the investigation of value-added tax with respect to the Plaintiff from February 4, 2008 to February 20, 2008, the director of the tax office confirmed that the Plaintiff is an unregistered business operator of Gangseo-gu Seoul Metropolitan City, Dong-dong, 00-0, and factory located in 00-0 (hereinafter “instant business establishment”) owned by the Plaintiff, and confirmed that the Plaintiff is operating the real estate rental business at the Plaintiff’s store located in Gangseo-gu, Seoul Metropolitan City (hereinafter “the instant business establishment”), which appears to be lessee from February 4, 2004 to February 20, 2006, the sum of 186,280,280,000 won (hereinafter “the instant account”) deposited every month in the Plaintiff’s deposit account (hereinafter “the instant account”), 306,280,500,500 won, 205, 205, 208, 2005, 205, 2005, 2005, 2005.

C. The Plaintiff dissatisfied with the instant disposition and filed an objection with the Defendant on October 17, 2009, but the Defendant rendered a decision of dismissal on November 26, 2009, and again filed an appeal with the Tax Tribunal on February 23, 2010, but the Tax Tribunal rendered a decision of dismissal on November 9, 2010.

[Ground of Recognition] Facts without dispute, Gap evidence 1, 11 through 17, Eul evidence 1 (including provisional number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Although the Plaintiff leased the instant business establishment from May 29, 200 to May 28, 2002, the instant business establishment was in a state of official housing, and the instant business establishment did not thereafter be leased. Moreover, the key funds deposited monthly into the instant account in the name of the Plaintiff’s Y, such as BB, etc. from May 29, 2000 to May 28, 2002 were deposited with Y. However, the instant disposition was unlawful for the Defendant to impose value-added tax by deeming the key funds as the amount of omission of the Plaintiff’s rental income without any grounds.

2) On April 4, 2007, when considering the Plaintiff’s shortage of sales of rental income, the Defendant rendered ex officio registration of the Plaintiff as a simplified taxable person of value-added tax and did not engage in leasing business. However, even after ex officio closure of business on April 9, 2007, the instant disposition imposing value-added tax on the basis of the general taxable person’s tax base after the ex officio registration as a general taxable person was made again, which violates the principle of trust protection or the principle of trust and good faith.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) Calculation of omitted sales of rental income

A) In conducting a tax investigation on the Plaintiff from February 4, 2008 to February 20, 2008, the director of the tax office added the fact that the Plaintiff is operating a real estate rental business at the instant business establishment as an unregistered business operator.

B) Accordingly, the director of the regional tax office investigated the relevant account details, and confirmed that the monthly amount of money was deposited by the business operators presumed to be lessee from the instant account in the name of the Plaintiff’s fatherY, his wife, from 2004 to 2006, and calculated the total amount of money in question as the omitted amount of the Plaintiff’s rental income.

[The following table omitted]

2) The current status of the instant place of business

A) The business registration status of the instant place of business is as follows.

[Attachment of Status of Business Registration]

(1) The Plaintiff did not have any other business registration except for the business registration with the trade name of “new chemical” at the instant business establishment, but the Defendant, on April 4, 2007, identified that the Plaintiff was operating a real estate rental business at the instant business establishment in the second taxable period of the value-added tax in 2006, and dealt with the Plaintiff ex officio registration on April 4, 2007 for the imposition of value-added tax, and then disposed of the Plaintiff ex officio registration on April 9, 2007, again on April 9, 2007. In the instant tax investigation process, the Plaintiff’s additional rental income was confirmed in the process of the instant tax investigation, thereby failing to meet the requirements for a simplified taxable person, re-

B) The Defendant inquired the instant workplace of the details of the use of electricity and water supply and sewerage systems and the current status of the conclusion of security contracts. The results of the inquiry are as follows.

(1) The Chairman of the Gangseo branch of the Korea Electric Power Corporation set up electric power under the name of ○○ Logistics (NDD) at the instant plant, and continuously used electric power from January 2002 to May 2007 (total of 104,755 Kwh) and sent reply to the purport that the monthly usage fee was imposed (total of 11,022,910 won).

(2) The river basin water supply business place sent reply to the purport that the water supply and sewerage was opened in the name of the Plaintiff at the instant business establishment and continued to use the water supply and sewerage from June 200 to April 2007, and that the monthly fee was imposed.

(3) On July 12, 200, the closures, a private security business entity, concluded a security service contract with EF (stock company ○○○○ Logistics) on the instant business establishment, and terminated on December 22, 2002. On December 23, 2002, the closures concluded a security service contract with UD (○○ Logistics) and responded to the purport that they terminated on April 27, 2007.

C) On July 17, 2008, the Defendant received a written confirmation (Evidence No. 7) from F as to the process of using the instant workplace, etc., which is registered in the name of the business operator of the instant workplace. The specific details of the written confirmation are as follows.

(1) On May 14, 200, the principal set the lease deposit amount of KRW 40 million and monthly rent of KRW 45 million from the Plaintiff, and established and operated the instant business establishment on October 2, 200, and subsequently subleted the instant business establishment to UDR on October 1, 200, while transferring the portion of corporate logistics to UDR on October 1, 2002, and thereafter, UDR operated the instant private business establishment with the trade name of UDR ○○ logistics.

(2) Since October 10, 2003, UND sublet the instant place of business to BB. On March 31, 2005, the BB transferred the instant place of business to EJ on the transfer of its business to EJ, and thisJ knows that on September 1, 2006, the J transferred its business to △△ C&P Co., Ltd.

(3) Meanwhile, at the request of the lessor at the time of the principal’s operation of ○○ Logistics Co., Ltd., the rent was deposited monthly into the instant account in the name of Y.

[Ground of recognition] Facts without dispute, evidence Nos. 1, each entry of evidence Nos. 2 through 7, partial testimony of the witness or scarcity, purport of the whole pleadings

D. Determination

1) As to the first argument

A) In revising the final return on the tax base of a taxpayer due to an error or omission in, it is the principle to be based on account books or evidence, but it is recognized that there is an error or omission in the details of the tax return by other data, and where it is possible to conduct a field investigation, it can also be corrected by other data. On the other hand, a field investigation is not an objective method to capture actual income. Thus, determination of the taxpayer's sales by investigating the amount deposited in the account of a financial institution of the taxpayer is a objective on-site investigation. Generally, in a lawsuit seeking revocation of tax imposition and disposition, the burden of proof on the facts of taxation must be borne by the taxpayer. However, if the facts alleged in the facts alleged in light of the empirical rule in the specific litigation process are revealed, it cannot be readily concluded that the other party is an illegal disposition that fails to meet the taxation requirements (see, e.g., Supreme Court Decision 2003Du14284, Apr. 27, 2004).

B) In light of the above legal principles, if we look at the following circumstances recognized by comprehensively considering the evidence and the purport of the entire arguments as seen earlier, it is reasonable to view that the Plaintiff was paid the key money as rent from the lessee, ○○ Logistics, and the Do-dong store in Yangcheon-dong, Do-dong, Do-dong, in the instant workplace from 2004 to 2006, while engaging in real estate rental business at the instant workplace. Therefore, the Plaintiff’s assertion on this part is without merit.

(1) The plaintiff's Y's Y's account in this case was deposited monthly in the name of the ○○○ Logistics (YY) and the Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do, and the above deposit was all made at the time of this case's business registration at the time of the deposit of the above money, and it is difficult for the plaintiff to claim that the above deposit of the above Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Do-dong Y.

(2) On May 14, 200, the above FF, which the Plaintiff leased the instant workplace from the Plaintiff, prepared a written confirmation to the effect that “FF, upon the Plaintiff’s request, made deposits into the instant account in this case Y’s name at the time of operating ○○ Logistics, the Defendant established and operated ○○ Logistics Co., Ltd. for 2 years from the Plaintiff’s lease of the instant workplace, and transferred the instant establishment to ○D on October 1, 2002, and subsequently subleted the instant establishment. The instant establishment is known to have been subleted in sequence to Do, JJ, and △△△&P Co., Ltd., Ltd., and the monthly rent was deposited into the instant account in this case Y’s name at the Plaintiff’s request. However, the content of the written confirmation is reliable in accordance with the details of the instant deposit in this case’s account and the current business registration status

"(3) On the other hand, the plaintiff argued that the workplace of this case was in a state of official housing because the contract of this case was terminated after the FF and the contract of this case was terminated, but the plaintiff did not submit objective data to support the plaintiff's assertion other than the fact confirmation (Evidence A 4). However, the plaintiff submitted objective data to prove that the workplace of this case was in a state of official housing, but the customer comprehensive inquiry was submitted to confirm that the electricity supply of the workplace of this case was suspended, but the above customer comprehensive inquiry was in a 000-dong, Gangseo-gu, Seoul, etc., and the business number or trade name was not accurately in a state of business registration of this case and the business number or trade name was still different from the business registration of the workplace of this case. In light of the above fact that the termination date of the contract of this case was the date before the conclusion of the contract of this case with the FF and the contract of this case, the contract of this case was still concluded after the conclusion of the contract of this case and the contract of this case was terminated until the neighboring workplace of this case.

A) Generally, in order to apply the principle of trust and good faith to a tax authority’s act in a tax law relationship, the tax authority should name a public opinion that is the subject of trust to taxpayers, and the taxpayer should not be responsible for the taxpayer’s reliance on the tax authority’s reliance on the tax authority’s reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the tax law relationship, and the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance

B) In light of the above legal principles, the following circumstances are comprehensively taken into account as to this case’s health class, the evidence as seen earlier, and the purport of the entire pleadings, namely, ① the Defendant: (a) was treated as a simplified taxable person for the taxation of value-added tax because the Plaintiff was engaged in a real estate rental business but failed to make a business registration; (b) was confirmed in the course of the tax investigation that annual rent income after 2004 exceeded the standard amount for simplified taxation; (c) the Plaintiff was corrected as a general taxable person and imposed a tax base for a general taxable person; and (b) the entrepreneur who did not make a business registration is obliged to apply a simplified tax in the first taxable period only when the total amount of rent proceeds for the calendar year to which the date of commencement of the business falls short of the standard for simplified taxation (Article 25(5) of the Value-Added Tax Act). In the case of a business operator who did not make a business registration, even if the tax base was imposed based on a simplified taxable person’s tax base after being treated as a simplified taxable person, it cannot be seen that the Plaintiff’s tax payer can be seen as a public taxable person.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.