(a) Scope to which the obligation of the merged company to the surviving company is succeeded;

B. Whether the right to receive the deduction of the income amount for the portion of capital increase of the merged company can not be allowed by nature

(a)in the event of a merger of companies, the obligation of the merged company to the rights of the merged company shall be succeeded in all the circumstances that continue to exist due to the merger, except that the transfer is not permitted by nature of the relationship under private law or public law;

(b) The right under Article 62(1) of the Emergency Order on Economic Stabilization and Growth, that is, the right to receive deduction of the amount of income for the portion of the capital increase of the merged company, in its nature, is not prohibited from being transferred.

Article 23 of the Framework Act on National Taxes, Article 235 of the Commercial Act

[Defendant-Appellee] Defendant 1 and 3 others

Litigation Performers of the North Daegu Tax Office and three others

Daegu High Court Decision 77Gu3 delivered on September 15, 1977

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The defendant's grounds of appeal are examined.

Article 235 (This Article shall apply mutatis mutandis to a stock company under Article 530 of the Commercial Act) of the Commercial Act provides that in the case of a merger by absorption, the company surviving the merger shall succeed to the obligation of the company extinguished by the merger. Article 23 of the Framework Act on National Taxes provides that the corporation surviving the merger after the merger shall be liable to pay national taxes, additional dues and expenses for disposition on default to the corporation extinguished by the merger or extinguished by the merger. In light of the above provisions and the legal principles of the merger by companies, the rights and obligations of the merged company shall be deemed to be succeeded to the company surviving the merger except where transfer is not permitted by the nature of the relationship between private law and public law, regardless of its nature. In other words, the right to receive the deduction of the amount of income for the increase in capital of the merged company under Article 62 (1) (Special Provisions on Taxation on Capital Increase) of the Emergency Order on Economic Stabilization and Growth shall not be allowed by its nature

Therefore, the court below's above opinion that the non-party 35 million won, which is the merged company, succeeded to the right to income deduction under Article 62 (1) of the above Emergency Order as to the amount of capital increase on January 11, 1973 by the non-party 35 million won, is just and there is no error in the misapprehension of legal principles or in the misapprehension of legal interpretation as in the judgment of the court below.

The issue is 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 Yu Tae-hee (Presiding Justice)