The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. Article 17 of the former Value-Added Tax Act (wholly amended by Act No. 11873, Jun. 7, 2013) provides that “the tax amount for the supply of goods or services used or to be used for one’s own business” under Article 17(1)1 shall be deducted from the output tax amount. Meanwhile, Article 17(2)3 provides that “the input tax amount for an expenditure not directly related to one’s business” as one of the input tax

Article 17(2)2 of the former Value-Added Tax Act (amended by Act No. 915, Jan. 1, 2010; hereinafter the same shall apply) and Article 60(3) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter the same shall apply) provides that the scope of input tax amount for expenditures not directly related to business shall be governed by Article 48 of the Enforcement Decree of the Corporate Tax Act. The main sentence of Article 48(1)2 (a) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22035, Feb. 18, 2010; hereinafter the same shall apply) provides that “in cases of a special relationship between non-joint investment business operators under any subparagraph of Article 87(1), the amount exceeding the amount calculated by the ratio of sales of the relevant corporation from the total sales amount for the immediately preceding business year shall not be included in deductible expenses.”

2. The lower court acknowledged the following facts by citing the reasoning of the first instance judgment.

The plaintiff and the Aeronautical Automobile Co., Ltd are companies that carry on the manufacture and sale business of various vehicles and parts, and are affiliated companies belonging to the Hyundai Automobile Business Group.

B. From June 2004, the Plaintiff entered into a joint research and development agreement with Abandoned Automobile Co., Ltd. and the instant joint research and development agreement with respect to the development of technology in accordance with the ratio of sales during the immediately preceding business year. As to the amount disbursed in excess of the share ratio.