[Defendant-Appellant] Dictic Co., Ltd. (Attorney Cho Chang-chul, Counsel for defendant-appellant)

The Director of Gangnam District Office

May 1, 2009

Seoul Administrative Court Decision 2008Guhap31659 Decided November 7, 2008

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of KRW 50,293,020 on September 4, 2007 against the plaintiff on September 4, 2007.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation concerning the instant case is as stated in the part of the judgment of the first instance, except for the addition of the following determination as to the Plaintiff’s new argument at the trial. Therefore, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Matters to be judged additionally;

The plaintiff argues that the proviso of Article 106 (4) of the Enforcement Decree of the new Act, which stipulates that a corporation shall collect the outflow money by itself and include it in the gross income and make a revised report on the disposition of the outflow from the company, violates Article 23 (1) of the Constitution guaranteeing property rights and Article 37 (2) of the Constitution prohibiting infringement on the essential contents of fundamental rights. Since the above provision imposes tax liability on non-existent income, it is invalid as it violates the provisions of the Income Tax Act. Meanwhile, at the time of the notice of change in the amount of income which is deemed as at the time of the payment of income or income amount, the outflow money in this case was already recovered and the representative director's income does not exist at the time of the notice of change in the amount of income which is deemed as at the time of payment. Thus, the disposition of this case on the premise of the establishment of the tax liability

In principle, the amount of the outflow from the outflow cannot be deemed to be not per se because it was recovered after the fact. In the case of such outflow from the outflow, it shall be treated as dividends, bonuses, other income, etc. to the person to whom the outflow from the outflow belongs (the representative in case of unsound division). However, in case where the amount of the outflow from the company is recovered within the reported period under the main sentence of Article 106 (4) of the Enforcement Decree of the new Act and is included in the gross income, it is intended to give the corporation an opportunity to correct the outflow from the company under certain conditions (the above provision was deleted on December 30, 200 after it was newly established on December 29, 200 and newly established on February 19, 200). The plaintiff's assertion that the correction was made in advance constitutes a loss of the opportunity to correct the outflow from the outflow from the outflow from the company, and thus, it cannot be viewed as a violation of the plaintiff's property rights or an actual infringement of property rights without any justifiable reason.

3. Conclusion

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Judges Cho Jong-chul (Presiding Judge)