Hanil Co., Ltd. (Attorney Park Jong-chul, Counsel for the plaintiff-appellant)

Head of Daegu Tax Office

July 25, 1986

The plaintiff's claim is dismissed.

Litigation costs shall be borne by the plaintiff.

The disposition of imposition of 89,343,200 won and 18,301,300 won and 19,300 won and 19,300 won of the defense tax against the plaintiff as of March 2, 1985 shall be revoked.

Litigation costs shall be borne by the defendant.

(1) The defendant shall determine the tax base amount of Gap 1 and Eul 1, 1 and 2, 3, 4, 5, 6, 70, 3, 3, 98-1 and 98-2, 3, 98-1 and 98-2, 3, 98-1 and 98-2, 3, 98-1 and 98-2, 3, 98-1 and 98-2, 3, 98-1 and 98-2, 3, 1 and 98-1 of the Corporate Tax Act as non-deductible income tax base of plaintiff 1 and 9-2, 3, 10-1 and 9-2, 3, 30-1 and 9-2, 3, 198-1 and 9-2, and 18-3, 3,000-1 and 4,000-18,000 won, respectively, respectively.

(2) On December 24, 1980, Plaintiff Co., Ltd. purchased KRW 5,00,000 on a total of KRW 1,250,000 on the same day and paid KRW 450,00,000 on the same month and on the 26th day of the same month, intermediate payment of KRW 609,00,000 during the period from 27 to 31. In addition, on the Korea Stock Exchange (Korea Stock Exchange) bid for 19,230,00 shares of Nonparty Co., Ltd. to auction under the name of the representative director, and paid KRW 460,00,00 on the date of bid for 5,00,000 and KRW 230,00,00,000 on a non-deductible Co., Ltd., Ltd., Ltd., and then paid KRW 1,250,000 on the date of acquisition of shares from 30,1981, respectively.

Article 17 (1) of the Corporate Tax Act (amended by Act No. 3099 of Dec. 5, 1978) provides that the business year to which the profits and losses accrue for each business year of a domestic corporation shall be the business year to which the date when the profits and losses are determined. Paragraph (2) of the same Article provides that the year to which the profits and losses accruing from the sale of the goods, products, or other products belong shall be the business year to which the date when the goods, products, or products are delivered: Provided, That if the assets are not delivered but they can be delivered, it shall be the business year to which the date when the profits and losses are transferable, and Paragraph (3) of the same Article provides that the period to which the profits and losses accrue from the transfer of assets which does not fall under Paragraph (2) shall be the year to which the profits and losses accrue, other than the date when the proceeds and losses are liquidated or the date when the assets are transferred, shall not be deemed the period to which the profits and losses accrue for the transfer of assets are determined separately from the time of acquisition of assets under paragraph (2).

Therefore, the acquisition time of each of the above shares is to be determined in accordance with the Commercial Act, and according to the entries in Gap evidence 9-1 (securities auction agreement) and Eul evidence 5-1 and 2 (detailed statement of stock movement), each of the above shares acquisition time is recognized to have been 1981, and on the other hand, pursuant to Article 18-3 (1) of the Corporate Tax Act (amended by Act No. 3270 of Dec. 13, 1980), the amount determined by the Presidential Decree out of the interest paid by a domestic corporation which owns shares of another corporation in each business year in Article 18-3 (1) of the Corporate Tax Act (amended by Act No. 3270 of Dec. 13, 1980) shall not be included in deductible expenses in calculating the income amount of each business year. Article 1 of the Addenda provides that this Act shall enter into force from January 1, 1981, the provisions of Article 6 to Article 18-3 of the same Act shall apply from the first payment year after the enforcement of this Act.

(3) If so, the Plaintiff’s claim of this case seeking revocation is without merit on the premise that the time of acquisition of each of the above shares is 1980 years, and thus, it is dismissed and the costs of lawsuit are assessed against the losing Plaintiff. It is so decided as per Disposition.

August 29, 1986

Judges Shin Sung-si (Presiding Judge)

[Attachment Form Omission (Tax Invoice)]