Seoul Administrative Court 2012Guhap21307 (Law No. 19, 2013)

Interest received under the principal among interest income, shall be excluded from the taxable income.

Where a certain reason arises that makes a final return on interest income from non-business loans or that makes it impossible to recover the principal and interest claims before determination or correction of the amount of tax, and where the collected amount falls short of the principal, such interest income shall not be subject to taxation of interest income tax even if there is an interest income actually recovered in the taxable year before the

Article 16 of the Income Tax Act

2013Nu14797 Global income and revocation of disposition

IsaA

The director of the tax office.

Seoul Administrative Court Decision 2012Guhap21307 decided April 19, 2013

October 2, 2013

October 30, 2013

1. The defendant's appeal is dismissed.

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

1. Purport of claim

Each disposition taken by the Defendant on August 5, 201 against the Plaintiff on the global income tax (including additional taxes), the global income tax OOOOO(including additional taxes), the global income tax 2007, the global income tax OOO(including additional taxes), the global income tax 2008, and the global income tax OO(including additional taxes) in 2009 is revoked.

2. Purport of appeal

The part of the judgment of the first instance against the defendant shall be revoked, and the plaintiff's claim corresponding to the above revocation shall be dismissed.

1. Quotation of judgment of the first instance;

This court's reasoning is as follows, except for the addition of the decision of this court as to the defendant's argument that is especially emphasized or re-emphasized by this court, since it is the same as the entry of the reasons in the judgment of the court of first instance, it shall be quoted in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of

2. The defendant's assertion

Defendant: (1) Electric bills, bank loans interest, etc. in relation to the Plaintiff’s rental income are leased income; and

It is difficult to see a direct causal relationship with the Plaintiff’s interest income, and ② to exclude the interest income from taxable income on the ground that the interest income received by the GangwonB andCC falls short of the principal amount, which violates the principle of a fixed-term-term taxation, and if it is confirmed as the interest income in the following year, it does not affect the interest income already generated even if the amount equivalent to the principal cannot be recovered due to the debtor’s default, etc.

3. Determination

A. As to the Defendant’s assertion ①

The following circumstances, i.e., electric charges and water charges, such as the statement of the necessary expenses by the Plaintiff, acknowledged by the reason of the judgment of the court of the first instance, based on the overall purport of the arguments.

Property tax

Elevator maintenance and repair expenses

In full view of the fact that the above money was used directly for the maintenance and management of the officetel of this case, and that the plaintiff paid the interest on bank loans as stated in the attached documents, and that the above money was the interest paid to the bank after taking over the OOO of the debt of the loans of the officetel of this case in lieu of the difference between exchange and exchange, it is reasonable to deem that the money stated in the attached documents falls under the necessary expenses corresponding to the plaintiff's rental income." Accordingly, the above argument by the defendant is without merit.

B. As to the Defendant’s assertion

Unlike the Corporate Tax Act, Article 51 (7) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010) appears to be a provision to prevent unfair result in imposing interest income tax even though there is no institutional device to reflect the loss in the deduction item of interest income even if the loss was incurred later due to the failure to recover the principal of the non-business loan. The above provision appears to be a provision to prevent unfair result in imposing interest income even though there is no institutional device to reflect the loss in the calculation item of the interest income. The above provision is applicable in the language of the provision where the total amount recovered by the time a certain cause not yet occurs before the final return on tax base or the tax base and the amount of tax are determined and corrected is below the principal amount, and it is difficult to discuss whether there was interest income under the Income Tax Act is the possibility of recovering the principal claim, which is the source of income. In full view of the following, it shall be deemed that there is no special exception.

In full view of the evidence adopted in the reasoning of the judgment of the court of first instance cited by this judgment, the Plaintiff received interest from DoD and CC, but the Plaintiff’s claims against DoD and CC were in an unrecoverable state by compulsory execution before August 5, 201, the date of the instant disposition, and the interest falls short of the principal. Therefore, it is reasonable to view that the interest income from DoD and CC from 2005 to 2009 is not subject to taxation.

Therefore, the defendant's above assertion is without merit.

4. Conclusion

Thus, the defendant's appeal is dismissed as it is without merit.