A. Whether Article 169-2 (2) of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 9229 of December 30, 1978) goes against the Income Tax Act and becomes invalid

B. The burden of proving the legality of the estimated taxation

(c) The case holding that a disposition of estimated taxation is unlawful, since the fact alone that the actual amount of income falls under the total amount of standard income of an average enterprise;

A. The purport of Article 169-2(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 9229, Dec. 30, 1978) provides that the amount calculated by adding or deducting a certain rate to an average enterprise by taking into account the materials reporting for the pertinent taxable period and the good faith in training transactions shall also be determined. It is difficult to conclude that the purpose of the provision is only to demand the taxpayer in bad faith without any relation to the reflection of the income amount. It is difficult to conclude that the purpose of the provision is only to demand the taxpayer in bad faith without any relation to the reflection of the income amount. The degree of loyalty in collecting withholding, collecting transactions, reporting materials, and training transactions, which are the grounds for taking into account the differential rate set forth in the above provision, may be the basis for calculating the accuracy of the determination of the income amount for the pertinent enterprise.

B. The estimated taxation under Article 120 of the Income Tax Act is exceptionally acknowledged in cases where there is no tax base and documentary evidence of a taxpayer who is the basis for the determination of the tax base and amount of tax, or where it is impossible to impose tax by the basis of the taxation because the details are incomplete or false. Thus, the estimated taxation should be reasonable and reasonable to reflect the actual amount of income near the truth, as well as the method and contents of the estimation in a way that it is impossible to investigate the actual amount of tax, and the burden of proof is borne by the Defendant

C. The Defendant’s disposition of this case based on the above high rate is unlawful as an estimated taxation lacking rationality and feasibility, since it is not proven reasonable and reasonable to estimate the Plaintiff’s actual income amount as an average amount of the company’s standard income according to the records of this case, and rather, it is recognized that the above high rate is determined by policy consideration not reflecting the disguised actual income amount, but rather demanding the disguised income earner.

(a) Article 169-2 (2) and (b) of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 9229, Dec. 30, 1978);

Supreme Court Decision 82Nu36 delivered on September 14, 1982

Attorney Kim Jong-young, Counsel for the defendant-appellant

The director of the tax office

Seoul High Court Decision 80Gu628 delivered on December 22, 1981

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

1. According to the reasoning of the lower judgment, the lower court determined that the Plaintiff’s total amount of income for the year 1978 is 69,524,454 won when it filed a final tax base return on global income tax (11%) according to the basic rate of income (7,647,685 won) and paid global income tax and defense tax imposed on the Plaintiff based on the 7,647,765 won (7,689 won which caused error) under the provisions of Article 27 of the Enforcement Decree of the Income Tax Act, which would be 69,524,454 won for the purpose of imposing additional income tax on the Plaintiff according to the method of estimated research for the year 1978 on which the Plaintiff would be a disguised income earner, and that the Defendant would be legitimate in determining the amount of income for the purpose of Article 271 of the Enforcement Decree of the Income Tax Act which would be 100 percent higher than that of the enterprise’s 100 percent higher than that of the enterprise under Article 2971 of the Income Tax Act.

2. However, examining the provisions of Article 169-2 (2) of the former Enforcement Decree of the Income Tax Act, it is difficult to readily conclude that the purpose of this provision is to determine a differential rate by which the basic rate for an average company may be increased or decreased, taking into account the sincerity of withholding, collecting transactions, reporting data, and training transactions for the pertinent taxable period, etc., and it is difficult to conclude that the purpose of the provision is only to respond to a defaulted taxpayer without any relation with the reflection of the income amount, such as the time of original judgment, and that the same purpose can be the basis for calculating the accuracy of the determination of the income amount for the pertinent company, such as withholding, collecting transactions, reporting on data, and training transactions, which are the grounds for taking into account the differential rate set forth in the above provision, can be the basis for calculating the accuracy of the determination of the income amount for the pertinent company. Therefore, the above provision

Therefore, the judgment of the court below that Article 169-2 (2) of the former Enforcement Decree of the Income Tax Act is invalid cannot be said to have committed an error of law interpretation.

3. However, according to the reasoning of the judgment below, even though the provision on the differential rate of the above Enforcement Decree is not null and void, the court below held that the highest rate 22% of the differential rate of the income rate of the defendant established in 1978 and applied to the plaintiff was determined in this case, regardless of the reflection of the income amount, and the taxation based on it was unlawful because it lacks validity and rationality.In conclusion, the estimated tax under Article 120 of the Income Tax Act is exceptionally recognized in cases where there is no taxpayer's account and documentary evidence, etc. which are the basis for the determination of the tax base and tax amount, or where it is impossible to impose tax by the method of the basis of the taxation because the contents are incomplete or false, it is difficult to conduct the actual amount investigation and it is reasonable and reasonable to reflect the actual amount of income that is close to the truth, and the burden of proof for this is to the defendant who is the tax authority.

However, even after examining the records, it is not reasonable and reasonable to presume that the plaintiff's actual income amount is equivalent to the amount of the average income level of an enterprise as above, and rather, according to records, the above high rate is not reflected in the disguised income amount, but it is recognized that the rate is determined in the policy consideration that the disguised income earner should comply with the disguised income amount. Thus, the defendant's disposition of imposing this tax based on the above high rate is illegal as an estimated tax without rationality and feasibility. The court below's disposition ordering the cancellation of the disposition of imposing this tax under a constructive judgment is just in its conclusion and there is no error of law such as the theory of lawsuit.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-ju (Presiding Justice)