Plaintiff (Law Firm Tae, Attorneys Park Sung-sung et al., Counsel for the plaintiff-appellant)

The director of the tax office

Suwon District Court Decision 2008Guhap2874 Decided October 27, 2010

June 29, 2011

1.The judgment of the first instance shall be modified as follows:

A. Of the instant lawsuit, the part of the claim for revocation of imposition of global income tax for the year 2002 is dismissed.

B. The Defendant limited to August 1, 2006 against the Plaintiff:

1) Of the disposition imposing global income tax amounting to KRW 2,512,046,533 in the year 2003, the portion exceeding KRW 2,619,267,413; and

2) Of the disposition imposing global income tax amounting to KRW 1,086,796,140,000 for the tax year 2004 exceeds KRW 1,086,796,140

Each cancellation shall be revoked.

C. The remaining claims of the plaintiff are dismissed.

2. Of the total litigation costs, 85% is borne by the Plaintiff, and 15% is borne by the Defendant, respectively.

1. Purport of claim

The Defendant’s imposition of global income tax of KRW 465,243,027 as of August 1, 2006, exceeding KRW 285,241,412, among the imposition of global income tax of KRW 285,241,412, exceeds the amount exceeding KRW 2,619,267,413, global income tax of KRW 2,332,648,413, global income tax of KRW 1,264,070,984, global income tax of KRW 1,205, global income tax of KRW 101,034,115, which reverts to the Plaintiff on May 1, 2007, and revoked the imposition of global income tax of KRW 11,29,864 as of May 1, 207 (the Plaintiff’s imposition of global income tax of KRW 2002, May 1, 2007).

2. Purport of appeal

The purport of the Plaintiff’s appeal is to revise the following: (a) of the judgment of the first instance court, the part of the claim for revocation of the imposition of global income tax in 2001, 2003, and 2004 as follows. The Defendant’s revocation of the imposition of global income tax in 285,241,412 out of the imposition of global income tax in 2001 as of August 1, 2006, exceeding KRW 285,243,027; (b) the amount exceeding KRW 2,619,267,413 of the imposition of global income tax in 2,619,267, and 413 of the imposition of global income tax in 203; and (c) the amount exceeding KRW 1,264,070,984 shall be revoked.

The purport of appeal by the defendant: The part against the defendant in the judgment of the court of first instance shall be revoked. The plaintiff's claim against the revocation shall be dismissed

1. Details of disposition;

The reasons why this Court shall be used are as follows: (a) the corresponding part of the judgment of the court of first instance (from the second to the fourth above second above) except in the following cases. It shall be cited in accordance with Article 8(2) of the Administrative Litigation Act, Article 420 of the Civil Procedure Act and Article 420 of the Civil Procedure Act:

○ The third fourth fourth 4th " August 3, 2005" is regarded as " August 31, 2005".

○○ 3~4 The Sheet 1>

In the taxable year included in the main text, the first increase or decrease (1. August 1, 2006) in the tax base return for the taxable year (1) (2001 2,045, 245, 243, 027 - 465, 243, 2027 - 2020,7222, 3145, 149, 149, 81726, 480, 805 (2) (1.5, 207), 29, 307, 29, 307, 29, 307, 464, 207, 307, 29, 307, 4636, 484, 297, 205, 207, 207, 307, 307, 308, 2964, 2965

Note 1) Initial increase (cost)

Note 2) 26,480,805

3) △△△△9,934,198

2. Determination as to whether a lawsuit seeking revocation of imposition of global income tax for the year 2002 is legitimate

A. Defendant’s assertion

(1) With respect to the imposition of global income tax in 2002, the imposition of KRW 26,480,805, which was notified of May 1, 2007, is unlawful without undergoing the procedure of the previous trial.

(2) The Defendant’s amount of tax increased or corrected by investigation to the Plaintiff was KRW 14,149,817, and KRW 29,330,758 in excess of the above amount was already reduced. The claim for review was already finalized with respect to KRW 20,722,315 as originally reported by the Plaintiff and the adjusted amount of KRW 26,480,80,805 as corrected for the amount of non-reported taxes. Accordingly, the final remainder of KRW 11,29,864 cannot be reduced.

B. Determination

1) The following facts may be acknowledged by adding up the whole purport of arguments in the evidence Nos. 10-1, 26-2, 1-2, 2-1, 2-1, 2-1, 15, 20 through 23, 25, and 25.

The Plaintiff reported global income tax of KRW 20,722,315 in 2002, but confirmed the omission of sales, etc., and received a disposition to rectify the amount of KRW 14,149,817 on August 1, 2006. Upon filing a request for review on October 30, 2006, the Plaintiff filed a request for correction of the disposition to impose global income tax of KRW 14,149,810 for the year 2002, notified on August 1, 2006. During the review, the Plaintiff received a disposition to rectify the amount of KRW 16,480,805, May 1, 2007, by deeming the amount recognized as additional, as necessary expenses were additionally recognized, and was subject to a disposition to rectify the amount of KRW 14,30,758, Nov. 29, 2008.

On March 18, 2008, the Plaintiff sought revocation of the disposition imposing global income tax amounting to KRW 14,149,817 on August 1, 2006, with respect to global income tax in 2002 at the time of filing the instant lawsuit. However, on November 16, 2009, the Plaintiff sought revocation of the disposition imposing global income tax amounting to KRW 32,022,179, which was disposed of on December 18, 2007 through an amendment to the purport of the claim on November 16, 2009 (the sum of the final return tax amounting to KRW 20,722,315 and the amount reduced to KRW 11,29,864, which was finally added by reflecting the reduced portion after the request for review). On June 22, 2010, the Plaintiff sought revocation of the disposition imposing global income tax amounting to KRW 11,29,864 except for the original return

2) If a correction disposition is issued after a tax disposition has already been imposed, the initial disposition loses independent existence value by absorbing the correction disposition, and thereafter, a re-revision disposition that reduces it thereafter becomes effective only for the portion of the reduced tax amount. Therefore, in principle, the issue of whether to implement the previous trial procedure shall be subject to the correction disposition. However, in a case where the preceding disposition and the grounds for a correction are common in common, as long as the tax authority has already granted an opportunity to review the basic facts and legal issues, as long as they have already undergone legitimate procedures for the preceding disposition, it is harsh to have the taxpayer undergo the previous trial procedure for the same reason of illegality, and thus, the taxpayer may institute an administrative litigation without going through the previous trial procedure (see Supreme Court Decision 90Nu1892, Aug. 28, 190).

The Plaintiff’s additional inclusion in necessary expenses at the time of the request for examination was a ground for objection. A disposition to rectify the increase in KRW 6,480,805 on May 1, 2007 is an additional recognition. In light of the fact that the procedures for the request for examination were subject to a disposition to correct the increase during the process of the request for examination, and that the Defendant was given an opportunity to reflect to the Defendant during the procedures for the request for examination, and that autonomous control was possible, it is reasonable to deem that the procedures for a prior trial are not necessary for the increased portion following the disposition to correct the increase in May 1, 2007. Therefore, on the ground that the procedures for the request for revocation of the disposition to impose global income tax for

3) We examine ex officio whether the Defendant complied with the filing period of the lawsuit by correcting the global income tax of KRW 26,480,805, which was reverted to the year 2002, as of May 1, 2007.

However, in a case where a legitimate revocation claim concerning the initial tax imposition disposition is pending in a lawsuit seeking a correction or re-determination that changes the initial tax imposition, with respect to the same subject matter of taxation, the grounds for revocation alleged in the initial tax imposition disposition exist likewise in the case of a correction or re-determination of correction, and thus, cannot be deemed unlawful, the plaintiff may seek a revocation of the correction or re-determination without having to undergo a separate procedure for the previous trial, and it does not need to separately consider whether the period for filing a lawsuit is complied with based on the time of amendment of the purport of the claim (see Supreme Court Decision 80Nu522, Feb. 9, 1982). This legal principle likewise applies to a case where a lawsuit is filed against the tax imposition disposition prior to the revision of the purport of the claim, but a correction of the claim is sought to revoke the amendment while the lawsuit is pending

The Plaintiff sought revocation of the disposition of imposition of KRW 14,149,817 on August 1, 2006 at the time of filing the lawsuit. The part concerning the determination of the revocation of the original disposition of KRW 14,149,817 on May 1, 2007 is attributable to recognition. The grounds for revocation asserted as having existed in the part concerning which the Plaintiff sought revocation of the original disposition are sought are the same as the above determination of the revocation of the above determination of the revocation. (The Plaintiff does not dispute as to the recognition of the grounds for revocation of the original disposition of KRW 14,149,817,

Therefore, it is examined whether the period of filing a lawsuit has been changed in the purport of the claim.

Article 56(3) of the Framework Act on National Taxes provides that an administrative litigation against a disposition of national tax imposition shall be filed within 90 days from the date of receipt of notice of the decision on the request for examination. In the event that the pre-trial procedure may be omitted on the grounds that the prior-trial procedure had gone through the pre-trial procedure, as in this case, it shall be deemed that, in principle, an administrative litigation may be filed within 90 days from the date of notification of the decision on the request for examination, and within one year from the date

The Plaintiff sought revocation of the disposition of imposition of KRW 14,149,817 on August 1, 2006 at the time of filing the instant lawsuit. However, the Plaintiff sought revocation of the disposition of KRW 32,022,179, which was disposed of on May 1, 2007 through amendment of the purport of the claim on November 16, 2009. However, it is apparent that the amendment of the above purport of the claim was filed one year after May 1, 2007 (the date of receipt of notice of the correction of the amount of amount), which was the date of the correction of the amount of claims, is apparent from the calendar (the date of notification of the correction of the amount of claims), and it is apparent that the Plaintiff had already been aware of the date of receipt of the first decision of the request for examination on the correction of the amount of increase (at least the date of notification of the request for examination was made on January 11, 2008).

Therefore, the part of the claim for revocation of imposition of global income tax in 2002 among the instant lawsuit is unlawful as it was filed after the lapse of the filing period.

3. Whether the disposition imposing global income tax for the year 2001, 2003, 2004, and 2005 is legitimate.

A. The plaintiff's assertion

The reasons for use in this part are as follows: The corresponding part of the judgment of the court of first instance (from the fourth to the seventh Table 2), except in the following cases. It shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act:

"A" that reduces "A" that reduces "(1) to 3) the fifth 6th 6th .

The fourth 6th "interest expense" is added "in addition to the interest expense included in the necessary expenses in the process of making the initial report and the decision of correction according to the request for review," and "149,44,000 paid in 202" is deleted.

○ From 9th below the fourth, up to 5th above the fifth, she shall be as follows:

2) Claim on steel tower construction cost and civil engineering construction cost

A) The Plaintiff operated a golf range business on the ground, such as Song-dong, Song-dong, Gwangju-si, Gwangju-si, and sold part of the above land and the steel tower to Nonparty 1, etc. for KRW 3.4 billion. However, in addition to the road work cost of KRW 9.46 million recognized as necessary expenses in relation to the site for a golf range, the Plaintiff paid KRW 850 million in total of the civil and steel tower construction cost of KRW 6.5 billion in total and KRW 1.45 billion in the steel tower construction cost of KRW 1.45 billion, and the said amount should be additionally recognized as necessary expenses.

B) If the cost of civil construction and steel tower construction cannot be confirmed, the amount of income shall be calculated based on the estimation determination. Under the proviso of Article 143(3) of the Enforcement Decree of the Income Tax Act, the amount of income shall be calculated based on the estimation determination. [The amount of income = 2,538,00,000 won ? (the amount of income ? the amount of principal expenses ? the amount of KRW 946,000,000 x the standard expense rate of KRW 15.2%) - (the amount of income ? the amount of income 2,538,000,000,000,000 won - (the amount of income 2,538,000,000,000 won ? (the amount of income 2,538,000,000,0000 won x simple expense rate of KRW 1.5] 】 The amount of income calculated based on the simple expense rate of KRW 309, 20005,20005,200000.

○ 6th, the 12th, “Reported capital gains tax has been calculated”.

○ 6. The 6th page <202> The part of the taxable period of the 2002>

B. Relevant statutes

Attached Form 1 of the judgment of the first instance court shall be as specified in the relevant statutes.

C. Determination

1) As to the assertion that interest expenses are included in necessary expenses

A) Facts of recognition

(1) Details of interest expenses already deducted from the necessary expenses

In 201, 2003, and 2004, the interest paid by the Plaintiff as an obligor to a financial institution is as shown in the table Nos. 1 through 3. Interest expenses incurred by the Defendant himself or according to the request for review are as listed in Table No. 3 â……………………………… and the citing Request for Examination. Ultimately, the interest expenses that the Plaintiff seeks additional deductions in this case are the same as the attached Table 3 â………………………………

(a) The error calculation of KRW 134,04,00 for the applicant for review of KRW 314,726,00,00 for the erroneous calculation formula of KRW 314,726,00 for KRW 314,52,00 for KRW 314,726,00 for the wrongful calculation formula of KRW 40,924,651, KRW 613,61, KRW 611, KRW 6139, KRW 694, KRW 694, KRW 38,612,00 for the wrongful calculation formula of KRW 38,912,00,00 for the year 205, KRW 27,542,083, KRW 45,125,81, KRW 20 for the wrongful calculation formula of KRW 2,00 for the additional calculation formula of KRW 42,00,00 for KRW 40,515,00 for the year 20.

The details of interest expenses included in necessary expenses when the Defendant corrected the amount of reduction according to the request for review are KRW 27,542,083,03, as stated in [Attachment 2] No. 9,969,007, and KRW 17,573,076, as stated in [Attachment 2] No. 15] (i.e., KRW 9,969,07, + KRW 17,573,076) and KRW 45,125,881, as stated in [Attachment 2] No. 3 “interest paid in 2004.” It is unclear whether the interest expenses included in necessary expenses at the time of the initial report by the Plaintiff are included in [Attachment 1 through 3].

(2) Details of payment of interest on loans for real estate acquisition

[Attachment 1]

On March 4, 2002, the Plaintiff: (a) purchased each land from Nonparty 2 and 3 in Hanam-si (number 2 omitted), (number 3 omitted), (number 4 omitted); (b) and (c) KRW 1.3 billion on the same day; (b) agreed to pay KRW 30 million on the same day’s intermediate payment; (c) KRW 50 million on the 16th of the same month; (d) KRW 270 million on the 22th of the same month; and (e) KRW 200 million on April 1 of the same year; (b) as the Plaintiff was unable to pay the second intermediate payment and any balance due to the shortage of funds, the Plaintiff again borrowed each of the above land in the name of Nonparty 2 in lieu of the payment of intermediate payment by lending KRW 50 million to Nonparty 4 in the name of the seller; and (c) again, paid the balance by borrowing each of the above land in the name of Nonparty 4150 million.

On the other hand, on August 16, 2002, the Plaintiff borrowed KRW 430 million from the bank in Korea as security (number 2 omitted). The Defendant included KRW 17,248,300,000 in the amount of interest paid from the loan to the repayment of principal on August 13, 2003, as shown in Annex 8 related to the “interest paid in 2003”, as shown in Annex 2, as stated in Annex 8 related to the “interest paid in 2003.”

[Attachment 2]

On September 25, 2002, the Plaintiff purchased each parcel of land from Nonparty 5, 1,72, and 6,700,000,000,000 won for each piece of land (number No. 777,4,000,000 won for the same day, and the remainder of 5,724,000,000 won for the same year on December 19, 200. However, upon the Plaintiff’s failure to pay any balance due to the shortage of funds, the Plaintiff borrowed 3,00,00,000 won from the Bank of Korea as security on December 27, 2002. The Plaintiff paid the said loan (number No. 17,30,00,000, August 17, 2003, Number No. 20031, Dec. 24, 2004, 203, 203, 2013, 203, 2004, etc.).

[Third Transactions]

On August 28, 2003, the Plaintiff purchased land, such as Pungsan-dong (number 9 omitted) from Nonparty 6 at KRW 20 billion, and as a result, the Plaintiff was unable to pay any balance due to the shortage of funds, on August 29, 2003, borrowed KRW 5 billion from the National Bank of Korea Co., Ltd. on August 29, 2003. The Plaintiff paid KRW 102,612,327 won in total in 203, and KRW 314,175,334 in total in 204, as shown in [Attachment 2] No. 17 related to “interest paid in 2003”, and [Attachment 3] No. 9 related to interest paid in 2004.

[No. 4 Transactions]

On February 6, 2003, the Plaintiff purchased each parcel of land from Nonparty 7, 3.3 billion won, i.e., the first day (number 10 omitted) and each parcel of land from Nonparty 7, i.e., the Plaintiff agreed to pay the remainder of KRW 200 million on the same day, the intermediate payment of KRW 50 million on March 17, 200, and the remainder of KRW 2.6 billion on April 21, 200. However, as the Plaintiff was unable to pay the remainder due to the shortage of funds, the Plaintiff, as security, obtained loans of KRW 1.75 billion in the name of the seller, in lieu of

On the other hand, the Plaintiff completed the registration of ownership transfer on May 27, 2003, and acquired the above obligation on March 11, 2004. The Defendant paid KRW 56,594,045, a total of KRW 300 million on July 2003, KRW 540 million on December 2003, KRW 500,000 on February 2004, KRW 241,61,815 on March 2004, KRW 18 related to the “interest paid in March 2003” and KRW 3,594,045, KRW 39,594,95, 204, and KRW 389,5839,03, as shown in the attached Table 2, No. 10 related to “interest paid in 204.”

[Basis] Evidence No. 2-7, 8, 24, 30, 45, 72, Evidence No. 18-6, Evidence No. 21, 23, and 24, Evidence No. 28-15, 26 through 29, Evidence No. 29-3 through 9, the whole purport of the pleading, and the whole purport of the pleading No. 29

B) Determination

(1) In the administrative litigation seeking revocation on the ground that the taxation disposition is unlawful, and the tax authority bears the burden of proving the existence of the taxation requirements. As such, the tax authority bears the burden of proof as a matter of principle, necessary expenses that constitute the basis for the determination of taxable income. However, not only necessary expenses are favorable to the taxpayer, but most of the facts constituting the basis for necessary expenses are difficult for the tax authority to prove. Therefore, if it is reasonable to allow the taxpayer to prove in consideration of difficulty in proof or equity between the parties, the burden of proof must be returned to the taxpayer (see, e.g., Supreme Court Decisions 94Nu3407, Jul. 14, 1995; 2005Du647, Apr. 14, 2005). If the tax authority clarified the omission of the amount of income during the taxable period through the field investigation and recognized the necessary expenses corresponding thereto through the field investigation, and then imposed global income tax by the tax authority, then the taxpayer is not recognized by the tax authority.

Article 55(1)13 of the Enforcement Decree of the Income Tax Act provides that “interest paid on debts used directly in order to obtain gross income” shall be one of the necessary expenses corresponding to the gross income amount of each year of real estate rental income and business income. Therefore, if interest paid is to be appropriated as necessary expenses, the relevant loan shall be used directly for business purposes.

(2) The interest on loans indicated in the above facts as “A” appears to have been paid for each real estate acquisition purpose in view of the correlation between the date of loan and the date of transfer of ownership, the correlation between the purchase price and the loan, etc., and each real estate also seems to have been acquired for business purposes by the Plaintiff who runs a real estate sales business. Accordingly, the interest on each loan is deemed as the interest paid on the debt used directly for the purpose of gaining the total amount of income.

However, the data submitted by the Plaintiff alone is insufficient to prove that the remaining interest costs, excluding the above-mentioned portions, are related to loans used for business purposes because the purpose of the loan is not clear, and thus, it is not recognized as necessary expenses.

(3) However, among the interest on the above loans, which are recognized to be additionally included in the necessary expenses, the above amount shall be deducted, since the Defendant appears to include KRW 141,76,00, which was recognized as necessary expenses by the initial report of the Plaintiff, and KRW 134,048,00,000, which was recognized as necessary expenses by the Plaintiff.

Therefore, when calculating the interest cost that is deemed necessary, it is as follows:

- - Total 215,959,894 [The 2003 =17,248,300 (the 1 transaction) +181,271,222 (the 2 transaction) +102,612,327 (the 3 transaction) +56,594,045 (the 4 transaction)- the 141,76,000 mutual-aid];

- Total 370,956,290 won (=150,883,153 (2 transaction) +314,175,334 (3 transaction) + 39,945,803 (4 transaction)- Weather deduction of 134,048,00 won)

2) As to the assertion that civil construction costs and steel tower construction costs are included in necessary expenses

A) As to the assertion that necessary expenses are included

(1) The following facts are recognized in full view of Gap evidence Nos. 4, 25, Eul evidence Nos. 3 and 4, and testimony of non-party 8 and 9 of the first instance court.

The Plaintiff, on January 28, 2004, transferred 3.4 billion won to Nonparty 1 on the aggregate of 5,823 square meters of land owned by Nonparty 9, Nonparty 10-owned land, 1,615 square meters of land owned by Nonparty 10, and 3,853 square meters of land owned by Nonparty 11, 3853 square meters of land owned by Nonparty 11, and 11,291 square meters of land owned by Nonparty 12, who was operated with permission for a golf range in the name of Nonparty 12.

In the case of civil engineering works [the name of the construction work: the civil construction work for site creation: the construction work for golf practice range: the period from October 25, 2002 to December 31, 2003; the contract amount of KRW 800,000,000; the contract amount of KRW 800,000; the contract amount of the plaintiff: the contractor; the contractor: Nonparty 13); and in the case of the steel tower construction [the name of the construction work: the steel tower construction, the construction period: from November 20, 202 to December 31, 2003; the contract amount of KRW 650,00,000; the contract amount of the construction work; the plaintiff; the contractor: Nonparty 8].

(2) However, in full view of the following circumstances, it is insufficient to recognize that the Plaintiff paid the above civil construction cost and steel tower construction cost only with the descriptions of Gap evidence 4-1 through 3, Gap evidence 25-1 through 39.

① From October 15, 1996, Nonparty 13 engaged in the ○○○○○○, a trade name, in the name of “○○○,” from Gwangju-si ( Address 1 omitted), and Nonparty 8 was engaged in the textile manufacturing business in the name of “△△△△△△△” from December 10, 1990 to June 30, 192, and did not engage in the architectural civil engineering business.

② The Plaintiff has not submitted objective evidence or financial data, such as construction-related books and the details of the settlement of construction cost.

B) As to the assertion of estimated decision

(1) The proviso of Article 80(3) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009) and Article 143(3) of the Enforcement Decree of the Income Tax Act provide that where the amount of income cannot be calculated on account of account books or other evidentiary documents due to the grounds prescribed by the Presidential Decree, a determination of an additional investigation may be made. The grounds prescribed by the Presidential Decree are as follows: (i) where necessary account books and evidential documents are not available or important parts are incomplete or false; (ii) where the entry is obviously false in light of the size of facilities, the number of employees, raw materials, goods, market prices, and various charges, etc., of raw materials, the contents of

(2) In a case where a tax assessment is conducted based on the on-site investigation decision, the taxpayer shall assert and prove the existence of necessary expenses corresponding to the omission of sales, and when the amount of income can be determined by the method of the on-site investigation, it shall not be determined by the method of the on-site investigation. If the tax authority, after stating the omission of revenue during the taxable period through the on-site investigation, recognized the necessary expenses corresponding thereto by the on-site investigation, and thereby imposes global income tax, it is not impossible to make a decision by the on-site investigation. If necessary expenses not recognized by the tax authority exist, the taxpayer shall assert and prove it, and the income shall not be determined by the method of the on-site investigation to deduct the necessary expenses (see Supreme Court Decision 2002Du12786, Dec. 12, 2003

In full view of the following facts, it is not determined that the Defendant calculated and deducted necessary expenses corresponding to the omission of income through an estimated investigation when imposing global income tax for 2004 on the grounds that there are no grounds for estimated determination under the proviso of Article 80 (3) of the former Income Tax Act and Article 143 (3) of the Enforcement Decree of the Income Tax Act.

① The Plaintiff prepared relevant books on the basis of the evidentiary documents, etc. already prepared for the transfer of a number of real estate other than each of the instant lands, and reported and paid the business income resulting therefrom.

② However, the Defendant found the omitted amount by investigating account books, tax invoices, etc. in addition to the details reported by the Plaintiff. Such investigation method belongs to a legitimate on-site investigation method by means of objectivity.

③ The Plaintiff recorded the fact of sales and purchase in the account book prepared by double entry, and issued and issued sales tax invoices or received purchase tax invoices in accordance with the account books, and subsequently filed a value-added tax and global income tax return on the basis of such sales and purchase tax invoices and account books, based on the adjustment of tax accountants.

④ Although there are some omissions in account books or documentary evidence kept and recorded by the Plaintiff, the Defendant determined the tax base and tax amount according to the method of on-site investigation by taking into account the remaining parts that correspond to the facts and were omitted.

⑤ The Plaintiff did not submit evidentiary documents proving that necessary expenses, such as the steel tower construction cost, corresponding to the omission of import in the original return, have been separately paid.

(3) In addition, the Plaintiff asserts that the subsequent tax should be the notified tax amount in a case where the tax amount determined by the on-site investigation method exceeds the tax amount determined by the method of estimated investigation.

In principle, income tax base determination shall be based on a field investigation, and it shall be based on an exceptional method only on a field investigation, so the income tax amount determined by a field investigation method is smaller than the income tax amount determined by a field investigation method (see Supreme Court Decision 95Nu6809, Jan. 26, 1996). Necessary expenses asserted by the Plaintiff are calculated by deducting necessary expenses, etc. from the total amount corresponding to the total amount of income. The determination of estimated income is determined by the standard rate of income by type of business in the absence of necessary account books and documentary evidence or in the absence of important parts, etc., and the standard rate of income by type of business shall be determined by taking into account the ordinary necessary expenses. Therefore, even if some necessary expenses are confirmed, it shall not be deducted from the tax base determined by a method of estimated investigation.

3) As to the assertion on title trust

A) Facts of recognition

(1) Transfer of real property and imposition of income tax

This Court's explanation is the same as the corresponding part of the judgment of the first instance except for the following reasons: Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

The term " June 20, 2002" in the 11th fiveth place shall be read as " April 22, 2002".

No. 11. The phrase, “san (number 12 omitted),” “san (number 13 omitted),” “san (number 14 omitted),” “san (number 15 omitted),” “san (number 16 omitted),” and “san (number 16 omitted),” both inside and outside of the table below, shall be deleted.

○ The phrase “san (number 18 omitted)” in the middle column of the 12 table shall be deemed to read “san (number 19 omitted),” “ August 10, 2004” to read “ August 31, 2004.” and “ February 9, 2004.” to read “ February 19, 2004.”

○○ 12 Madern, “No.S. 1,898 square meters of forests and fields (number 17 omitted)” are “No.S. 1,898 square meters of forests and fields,” “No.S. 1,898 square meters of forests and fields,” “ August 10, 2004. 23, 2004.” and “ February 9, 2004.” are “No.S. 19, 2004.”

In addition, each of “((3) February 9, 2004)” is added to “(3) transfer of this case: (4) transfer of this case appears to be a clerical error as of December 23, 2004 with respect to the assignment of this case 4 transfer of this case.”

(2) The flow of payment, etc.

① A person who actually entered into a contract to purchase the instant land from Nonparty 14 and 15 is the Plaintiff, and at the time of transfer of the instant case, the person who entered into a direct sales contract with Nonparty 1 and received the price or received the price from the Plaintiff’s account in the Cheongdong-dong, Gwangju-si at the time of transfer of the instant case.

② In order to purchase the instant land from Nonparty 14 and pay the remaining amount, the instant real estate was loaned KRW 636,00,000 from the Livestock Cooperative (△△ Branch) as collateral, and deposited KRW 150,000,000 in the name of Nonparty 9, Nonparty 10, Nonparty 10, and KRW 186,00,000 in the name of Nonparty 11, respectively, in the name of Nonparty 14; thereafter, the Plaintiff began to pay the principal and interest thereof from August 10, 202 to Nonparty 14.

③ On June 10, 2002, the Plaintiff withdrawn KRW 450 million and paid intermediate payments to Nonparty 15 in the name of Nonparty 9.

④ Of the balance of the purchase price paid by Nonparty 1, KRW 345 million on August 10, 2004, and KRW 150 million on July 23, 2004 were paid to each Plaintiff.

[Reasons for Recognition] Gap evidence 6-1 to 3, Eul evidence 5-1 to 7

B) Determination

Although the burden of proof of the fact that a taxation disposition exists in an administrative litigation seeking revocation on the ground that the taxation disposition was unlawful is against the disposition agency, if it is proved in light of the empirical rule in the specific litigation process that the other party is not eligible to receive the application of the empirical rule, the taxation disposition does not constitute an illegal disposition that fails to meet the taxation requirements (see Supreme Court Decision 2006Du6604, Feb. 22, 2007).

In full view of the following facts as well as the facts recognized earlier, the Plaintiff appears to have held title trust in the names of Nonparty 9 and Nonparty 10 after actually purchasing each of the instant forests and fields in full view of the following: (a) most of the acquisition funds was withdrawn from the Plaintiff’s account or the Plaintiff repaid the principal and interest of loans; (b) the Plaintiff entered into a direct contract on the instant land with the seller and the buyer; and (c) on the other hand, Nonparty 9 and Nonparty 10 did not submit objective financial transaction data verifying that Nonparty 9 and Nonparty 10 were the actual owner.

① The Plaintiff, in the aggregate of Nonparty 9’s land owned by Nonparty 5,823 square meters, Nonparty 10’s land owned by Nonparty 1,615 square meters, and Songdong-dong, Songdong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-si-dong-dong-dong-si-dong-dong-dong-dong-dong-do-dong-si-do-do-do-do

② There is no objective evidence that the Plaintiff paid the purchase price of the land at the time of purchase of the land from Nonparty 9 and Nonparty 10.

③ There is no evidence that the down payment and intermediate payment paid by the Plaintiff was leased to Nonparty 9, and there is no evidence about the expenses borne by Nonparty 9 at the time of land acquisition.

④ There is no evidence that Nonparty 9 received the sales price from Nonparty 1 or the Plaintiff, and the intermediate payment of KRW 600 million paid by the Plaintiff to Nonparty 10 was also used on April 22, 2004, which was two days after the result of the financial tracking, as the purchase fund for other land (Evidence 17-1).

⑤ The Plaintiff loaned an intermediate payment of KRW 450 million to Nonparty 9, but Nonparty 9 claimed that, on September 12, 2002, the Plaintiff borrowed KRW 550 million as collateral and repaid the said loan and lent KRW 100 million. However, there is no evidence that Nonparty 9 paid the said amount to the Plaintiff.

4) As to the assertion of acquisition value of actual transactions

According to the statement No. 8-1 and No. 2, the Plaintiff acquired 1/2 of the land category 1,682.5 square meters in Chungcheongnam-dong (number 21 omitted) and transferred the value to Nonparty 16 on September 15, 2001. The Plaintiff reported and paid the business income from real estate trading at KRW 160,000,000, and the acquisition value at KRW 145,000,000, the transfer value was 400,000, the actual transaction value was 400,000,000, and the Defendant imposed global income tax for the tax year 201.

The Plaintiff asserts that, since the real acquisition value of the above real estate is KRW 350 million, the additional KRW 250 million should be recognized as necessary expenses, in addition to the original reported KRW 145 million. However, it is insufficient to recognize the fact that the actual acquisition value of the above land is KRW 350 million by itself on the sole basis of the evidence No. 8-1 or 3. The Plaintiff’s assertion is not acceptable.

(v)the calculation of a reasonable amount of tax;

If the costs of interest paid in 215,959,894 won in 2003 and 370,956,290 won in 2004 are additionally recognized as necessary expenses and deducted from the amount of income, the amount of legitimate final tax on the Plaintiff shall be global income tax of 2,512,046,53, 2004, as shown in attached Table 4, 503, 1,086,796,140 won in global income tax of 2,619,267, 413 won in global income tax of 203 and 2,512,046,53 won in 204, global income tax of 204, global income tax of 204,264,070,984 won in 1,086, 796, and 140 won in addition to attached Table 5, is unlawful.

4. Conclusion

Of the instant lawsuit, the part of the claim for revocation of the imposition of global income tax for the year 2002 is dismissed. The part that the Defendant recognized as unlawful among the dispositions imposed by the Defendant against the Plaintiff is revoked. The Plaintiff’s claim shall be accepted within the scope of the foregoing recognition with merit, and the remainder of the claim shall be dismissed as without merit. The Defendant’s appeal partially accepted

[Attachment]

Judges Kim Jong-dae (Presiding Judge)

Note 1) The amount stated in the column is more increased than the total amount initially reported. The amount stated in the column is also increased or decreased. The amount in the column is the last increased or decreased portion than the total amount initially reported.

2) This is because, as a result of the investigation conducted by the Plaintiff, the Plaintiff was found to have been excessively appropriated in personnel expenses of KRW 44,026,00 as a result of the said investigation, and was disposed of as a bonus to the Plaintiff.

3) The first Defendant calculated the amount of income by applying standard expense rate when determining the amount of income for real estate sales business for the year 2005, but the amount of income has been reduced due to the Plaintiff’s acceptance of a civil petition for grievance and application of simple expense rate.