Early High Court Decision 2014-0612 (No. 24, 2014)

There is no evidence that some of interest has been paid again to the previous owners.

It is insufficient to recognize that the Plaintiff paid part of the interest of this case to the previous owners as interest, and there is no evidence to acknowledge otherwise.

Article 19 of the Income Tax Act

2014Guhap18589 global income and revocation of disposition

○ ○

○ Head of tax office

on July 24, 2015

on January 28, 2015

1. Of the instant lawsuit, the part of the instant lawsuit seeking revocation of the part exceeding the imposition disposition of global income tax of KRW 000,000, imposed on the Plaintiff on August 8, 2013, is dismissed.

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

The imposition of global income tax of 000 won (including additional tax) on the Plaintiff on August 8, 2013 shall be revoked.

1. Details of the disposition;

A. From August 1, 2005 to December 6, 2005, the Plaintiff engaged in financial and credit business under the trade name, i.e., “○○○” and “△△” from May 23, 2007 to January 17, 2008.

B. The Plaintiff loaned funds to △ro Co., Ltd. (hereinafter referred to as “Nonindicted Company”) and received 000 won (hereinafter referred to as “the interest of this case”) totaling 12 times as indicated below from Nonparty Company around 2006.

C. On August 8, 2013, the Defendant: (a) determined and notified the global income tax of KRW 00 ( KRW 000, KRW 000, KRW 00, KRW 00 for additional tax on negligent tax returns, and KRW 00 for negligent tax payment) to the Plaintiff by applying standard expense rate (15.7%) on the ground that the instant interest constitutes business income of finance and credit business (hereinafter “the instant original disposition”).

D. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on November 6, 2013, and the said appeal was dismissed on July 24, 2014.

E. During the instant lawsuit pending, the Defendant issued a decision of correction that ex officio reduces KRW 00 of the initial additional tax on negligent tax returns (hereinafter “instant reduction decision”) on August 8, 2013, on the ground that there was an error in calculating the amount of the additional tax on negligent tax returns during the instant disposition, and accordingly, the Defendant issued a disposition of imposition on the Plaintiff on August 8, 2013 shall be KRW 000 of the global income tax (the main tax amount, KRW 00, KRW 00 of the additional tax on negligent tax returns, and KRW 00 of the additional tax on negligent tax returns) that reverts to the Plaintiff (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 2, 4, 5 (including branch numbers), and the purport of the whole pleadings

2. Whether the part of the instant lawsuit seeking revocation of the instant reduction decision is legitimate

As to the legitimacy of the part of the lawsuit in this case seeking revocation of the original disposition of this case, there is no interest in the lawsuit to seek revocation of the original disposition of this case, since there is no interest in filing a lawsuit to seek revocation of the original disposition of this case, and as to the part legally revoked by correction or re-revision of the tax imposition disposition of this case, it is sufficient to seek revocation of the original disposition of this case (see Supreme Court Decision 81Nu393, Nov. 23, 1982). As seen above, the defendant decided to reduce the original disposition of this case ex officio and the plaintiff sought revocation of the original disposition of this case. Thus, there is no interest in filing a lawsuit seeking revocation of the original disposition of this case which has already been lawfully revoked. Accordingly, the lawsuit seeking revocation of this part is unlawful.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff raised funds borrowed from the non-party company to the non-party company from the ○○○ and 20 persons (hereinafter referred to as the "exclusive licensee"). Accordingly, the above 00 won out of the interest of this case was paid as interest to the above-mentioned owner again. The above 00 won was the necessary expenses under Article 19 (2) of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) consumed by the plaintiff to obtain interest income from the non-party company, and the disposition of this case which did not deduct it from the interest of this case is unlawful.

Even if the principal tax of this case is lawful, the error in calculating the penalty tax is unlawful.

(b) Related statutes;

▣ 구 소득세법(2009. 12. 31. 법률 제9897호로 개정되기 전의 것)

Article 19 (Business Income)

(1) Business income shall be the following income, generated in the relevant taxable period:

10. Incomes accruing from the banking and insurance businesses;

(2) The business income shall be the amount obtained by deducting the necessary expenses required therefor from the gross income amount in the current year.

C. Determination

1) Whether the principal tax is lawful

In a lawsuit seeking revocation of global income tax disposition, the burden of proof on the tax base, which is the basis of taxation, is on the tax authority, and the tax base is deducted from necessary expenses. Therefore, the tax authority shall, in principle, bear the burden of proof on revenue and necessary expenses. However, as necessary expenses are more favorable to the taxpayer, and most of the facts generating necessary expenses are located within the territory under the control of the taxpayer and the tax authority is difficult to prove. Thus, in a case where it is reasonable to prove the taxpayer by taking into account difficulty in proof or equity between the parties, it accords with the concept of fairness (see, e.g., Supreme Court Decision 2002Du1588, Sept. 23, 2004).

In the case of this case, it seems reasonable to prove that the plaintiff borrowed funds from the previous owners to lend them to the non-party company. However, it is not sufficient to recognize that the plaintiff again paid 00 won out of the interest of this case to the previous owners on the basis of the evidence Nos. 3 and 5 submitted by the plaintiff, as well as the evidence No. 3, where the plaintiff cannot know at all the principal and each date of lending the loan to each previous owner, etc., and there is no other evidence to support this, the plaintiff's assertion on this part is without merit

2) Whether the additional tax portion is lawful

As seen earlier, the Defendant rendered ex officio a decision of reduction in this case by correcting errors in the calculation of the additional tax on negligent tax returns among the original disposition of this case, and there is no other evidence to prove that there was an error in calculation in the additional tax portion among the disposition of this case, the Plaintiff’s assertion on

4. Conclusion

Therefore, the claim for revocation as to the part exceeding the disposition of this case among the lawsuit of this case is unlawful. Thus, the plaintiff's remaining claims are dismissed as it is without merit. It is so decided as per Disposition.