(a)Requirements and grounds for decision of estimated investigation under the Income Tax Act;

(b) The case holding that, even if a taxpayer received a written confirmation from the taxpayer as to lack of documentary evidence and the inorganic certificate, the decision on the estimated total expenses on the estimated operating expenses of the place of business made by having the taxpayer state the total expenses in outline without review, shall be unlawful in applying the standard income rate to the total expenses on the estimated operating expenses of the place of business, and the decision on the estimated total expenses calculated by calendar method, even though the taxpayer submitted documentary evidence

A. Estimated taxation under the Income Tax Act is exceptionally granted in cases where there are no books or documentary evidence of a taxpayer, which serves as the basis for income or tax base, or where it is impossible to use them as the basis for taxation due to lack of documents or falsity, and thus, if there are documents presented by a taxpayer or parts suspected of false contents, the tax authority may determine the tax base or tax base by means of estimated investigation only when it is found that the tax base or tax amount cannot be determined even if the documents presented by a taxpayer are inappropriate and new materials are presented and that all documentary evidence are clearly false as a result of the investigation, and the method and contents of the estimation shall also be determined by reasonable and reasonable grounds so as to reflect the revenue amount or the actual income amount near the truth.

B. The case holding that if an employee of the tax authority applied the standard rate of income to the total expenses on the presumption of total expenses for operating places of business prepared by making a taxpayer state the total expenses in outline, and calculated the total expenses by reverse calculation method, the standard rate of income is applied to the total expenses on the presumption of total expenses for operating places of business prepared by making a taxpayer state the total expenses in outline, and the standard of income rate is not reasonable because the tax authority is unable to conduct a field investigation only on the ground that such data cannot be conducted on the spot investigation by making a taxpayer supplement evidentiary documents or prepare and submit a new account book, and it cannot be asserted that the taxpayer took such measures, even though the taxpayer submitted evidentiary documents which form the basis for revenue and expenditure at the time of filing the global income tax return and submitted the books prepared accordingly, and the taxpayer did not withhold such documents without examining them, and it cannot be found that the calculation method cannot be based on the presumption of total expenses based on the estimation method and the calculation method cannot be determined on the same basis as the calculation method based on the estimation method under Article 159 (6) 4(b) of the former Enforcement Decree (1) of the Income Act.

A.B. Articles 114-2 and 120(1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994); Article 169(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994); Article 159(6)4(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994)

A. Supreme Court Decision 85Nu859 delivered on March 10, 1987 (Gong1987,656) 87Nu32 delivered on July 7, 1987 (Gong1987,1340) 87Nu966 delivered on May 24, 198 (Gong198,1001) B. Supreme Court Decision 94Nu3025 delivered on September 27, 1994 (Gong194Ha, 2890)

[Judgment of the court below]

Gangwon-gu Director of the District Office

Seoul High Court Decision 93Gu25297 delivered on June 29, 1994

The part of the judgment below against the plaintiff shall be reversed, and the case shall be remanded to Seoul High Court.

The Plaintiff’s attorney’s ground of appeal is examined.

1. Estimated taxation under the Income Tax Act is exceptionally granted in cases where there are no books or documentary evidence of a taxpayer, which serves as the basis for income or tax base, or where it is impossible to use them as the basis for taxation due to lack of documents or falsity, and thus, if there are documents presented by a taxpayer, etc. or there are parts suspected of false contents, the tax authority may determine the tax base and tax amount by the means of estimated investigation only when it is found that the tax base and tax amount cannot be determined and all documentary evidence are clearly false as a result of the investigation, and the method and contents of the estimation should also be determined by reasonable and reasonable grounds so as to reflect the revenue amount or actual income amount adjacent to the truth (see, e.g., Supreme Court Decision 87Nu32, Jul. 1987).

2. According to the reasoning of the judgment below, with respect to the method of determining the tax base of this case, the court below found that the non-party, who is a tax official of the defendant, tried to visit a private art institute operated by the plaintiff on March 26, 1992 to practically inspect the plaintiff's total amount of income in 191, but the plaintiff presented only 12 tax invoices on rent, management expenses, electricity charges, etc., and 6 copies of advertising commission receipts, but did not present them on the ground that there are no basic books on the basis of the current status of collection of tuition fees, the issuance register of tuition fees, the student attendance book, etc., and no other tax invoices except 12 copies and 6 copies of receipt, and the fact that the plaintiff prepared and rejected the tax base of the plaintiff's tax base by arbitrarily assessing the total amount of income and the amount of tax, based on the results of the plaintiff's report on global income tax around May 26, 192.

3. However, even if an employee of the defendant received a written confirmation from the plaintiff as above, the defendant cannot conduct an on-site investigation on the ground that such materials alone cannot be conducted, and there is no evidence as to the fact that the defendant made efforts to conduct an on-site investigation by requiring the plaintiff to supplement documentary evidence or to prepare a new account book. In addition, according to the records, the defendant denies the plaintiff's submission of documentary evidence which served as the basis for revenue and expenditure and its related account books while submitting the written global income tax return, and denies them without reviewing them. The defendant did not based on any such documentary evidence as may be believed in the decision of the estimate of total operating expenses (Evidence No. 8-2) prepared by making the plaintiff generally state the total expenses, and it cannot be acknowledged that the defendant calculated the total income amount by calculating the income-based income-based rate, 40.8%, and it is difficult to find that the defendant's calculation method should not be based on the presumption of total income-based calculation ratio, as alleged by the defendant, and thus, it cannot be found that the above estimation method and calculation ratio cannot be applied to the above estimation method.

There is reason to point this out.

4. Therefore, the part of the judgment below against the plaintiff is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Cho Chang-tae (Presiding Justice)