(a) Requirements for determination of estimated tax base of corporate tax;

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

A. The corporate tax base should, in principle, be determined by the on-site investigation method, and the case where the account books and other documentary evidence of the taxpayer are not existing or even if there exists no such books and other documentary evidence, it is permissible when the tax authorities do not have any other means to disclose the actual amount of income without reliability because the important part of the account books and other documentary evidence is incomplete or false. Therefore, even if the account books and other documentary evidence are incomplete or false, it is not necessary to estimate if the account can be calculated based on the existing account books and documentary evidence.

B. Unless there are other special circumstances, the tax authority bears the burden of proof regarding the facts which constitute taxation requirements, such as the reason for taxation, tax base, etc.

(a) proviso of Article 32(3) of the Corporate Tax Act; Article 93(1)1 (b) of the Enforcement Decree of the Corporate Tax Act; Articles 1 and 14 of the Administrative Litigation Act

Attorney Ahn Dong-dong, Inc., Counsel for the defendant-appellant

The superintendent of the tax office

Seoul High Court Decision 80Gu660 delivered on January 31, 1983

The judgment below is reversed, and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

(1) The court below reasoned that the defendant's tax base and amount of corporate tax of the plaintiff company in the business year 1977 and 1978 determined as the method of the estimation investigation and confirmed the fact that the tax assessment in this case was conducted, and that the defendant's tax assessment in this case was unlawful by the method of estimation investigation following the plaintiff's argument that the tax assessment in this case was unlawful. The defendant's assertion that the tax assessment in this case was conducted by the method of estimation investigation is concerned, and it cannot be viewed that all of the items of subparagraph 6-1 and subparagraph 65-10, which are documentary evidence of the plaintiff's submission of the plaintiff's evidences that the tax assessment in this case could be conducted on-site investigation as to the tax disposition in this case, shall not be viewed as stating all the facts about the earnings and losses of the two business years in 1977 and 1978, and there is no other evidence to prove that the above documentary evidence was actually prepared.

On the other hand, the tax base of corporate tax is, in principle, determined by the actual amount revealed by the method of on-site investigation and the method of on-site investigation is allowed only when there is no taxpayer's account books and other evidential documents or when there is no other method to clarify the actual amount of income without reliability because of lack of material parts or false entries or false entries. Thus, even if there are grounds in which part of account books and other evidential documents are incomplete or false entries, there is no need for estimation if it is possible for the tax authorities to calculate the actual amount of income by using existing account books and evidential documents.In the tax litigation where the issue is whether the necessity of on-site taxation exists, the court shall examine the necessity of on-site taxation and determine the legality of the taxation disposition. Thus, in case where a corporation keeps account books and evidential documents of the business year, it is necessary to determine the legitimacy of the estimated taxation by clarifying whether it is impossible to conduct on-site investigation due to lack of credibility or false entries in important parts of the account books and other evidential documents, etc. The above part of the court below's decision that the plaintiff company's total account books and evidential documents are not clear.

The court below did not examine whether or not the plaintiff corporation's tax base cannot be determined on the spot due to deficiencies or false statements in important parts of the above books, etc., and determined that the tax base of the plaintiff corporation was legitimate for the reason that there is no evidence to acknowledge that the above documents, etc. were written as they are all matters concerning the plaintiff corporation's gross income and deductible expenses. It did not err in the misapprehension of legal principles as to estimated taxation, thereby failing to exhaust all necessary deliberations, or violating the law of improper reasons. The grounds for appeal pointing

(2) The court below found that the defendant calculated the business revenue amount of the plaintiff corporation based on the production monthly report to the non-party coal association in 1977 and 1978, and determined the tax base and tax amount by estimation method, and found the plaintiff again that the defendant calculated the business revenue amount of the plaintiff corporation as 13,090 tons of the production amount of the plaintiff corporation in the business year 1978 and calculated the direct production amount of the plaintiff corporation with 150,930 tons of the production amount, but the direct production amount of the plaintiff corporation was 35,264 tons of the 128,756 tons of the production amount of the plaintiff corporation. Thus, the plaintiff's assertion that the tax revenue amount of the plaintiff corporation was no more than the tax revenue amount of the plaintiff corporation in the business revenue amount of the non-party corporation in the year 197 and it cannot be viewed that it was legitimate for the plaintiff to prove that there was no other legitimate tax revenue amount of the plaintiff corporation in the business revenue amount of the plaintiff corporation in the tax disposition of this case.

(3) Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to Seoul High Court. It is so decided as per Disposition by the assent of all participating Justices

Justices Jeong Tae-tae (Presiding Justice)