Early High Court Decision 20141657 ( October 27, 2015)

It cannot be deemed that the rent received from the borrowed account is the principal collection of the loan.

The argument that the principal of the loan was collected with respect to the monthly rent received from the lessee as the borrowed account is entirely unreasonable.

Article 17 of the Income Tax Act Article 26-2

revocation of revocation of imposition of value-added tax by Suwon District Court2015Guhap69844

O KimO

O Head of tax office

2016.08.30

2016.27

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of value-added tax for the first term of December 1, 2013 against the Plaintiff on December 1, 2013, KRW 12,525,250, value-added tax for the second term of 207, KRW 12,224,160, value-added tax for the second term of 208, KRW 11,926,530, value-added tax for the second term of 208, KRW 11,625,270, value-added tax for the first term of 209, KRW 11,329, KRW 980, value-added tax for the second term of 209, KRW 11,865,370, value-added tax for the second term of 2010, value-added tax for the second term of 201, value-added tax for the second term of 14,1630, KRW 1301, KRW 2375,2019.

1. Details of the disposition;

A. On July 3, 2003, the Plaintiff is the owner who completed the registration of transfer of ownership, etc. on the ground of sale with respect to a reinforced concrete building of 1,495.17 square meters (hereinafter “instant building”).

B. As a result of performing a tax investigation with respect to the Plaintiff (hereinafter “instant tax investigation”), the Plaintiff leased the instant building from 2007 to 201 to Maa and sss, respectively, and confirmed that the Plaintiff received KRW 573,55,000 in total from Maa and sssss to d1) accounts in the name of 00 bank accounts in the following manner:

Accordingly, the defendant received 567,95,000 won (hereinafter referred to as "in this case") for the remainder of 5,60,000 won after March 8, 201, which was confirmed to have been issued a tax invoice of the above remittance amount of KRW 573,55,00 (hereinafter referred to as "in this case"), using the borrowed account as rent, and on the ground that this was omitted at the time of filing a return, such as the tax base and the amount of the value-added tax, etc., value-added tax for 12,525,25,250 won for the first period of 207, 207, 12,224,160 won for the second period of value-added tax for 207, 11,926, 530 won for the first period of 208, 207, 201, 207, 301, 207, 209, 2017.

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on March 3, 2014, but the Tax Tribunal decided to dismiss the appeal on July 27, 2015.

Facts that there is no dispute over recognition, Gap's Nos. 1, 2, 3 (including virtual numbers), Eul's Nos. 1 and 2, and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

1) The Plaintiff’s East Kimff leased the building of this case and operated the Gggggg Gag Ba (hereinafter “Sag Ba”), and during the business process, the Plaintiff was obligated to pay a total of KRW 560,000,000,000 to the Plaintiff for facility expenses, illegal removal of the building, etc. In the course of the business process, the Plaintiff succeeded to the obligation in return for taking over the instant letter or business from Kimff, and the Plaintiff succeeded to the remainder of the said obligation while taking over the instant letter or business from Ba. The Plaintiff received the omitted amount in return for the repayment of the said borrowed amount, but the Defendant’s disposition based on the premise that the omitted amount was the rent is unlawful.

2) Even if not, the Plaintiff cannot be deemed as “Fraud or other unlawful act” solely on the ground that the omitted amount of this case was paid by shipa and oils as a borrowed account. However, since the Defendant imposed the Plaintiff an unjust under-reported penalty tax on the Plaintiff on the premise that it falls under this case, each of the instant dispositions of this case is unlawful. For the same reason, each of the instant dispositions of this case is unlawful, and each of the value-added tax on January 2, 2007 and January 2, 2008 among each of the dispositions of this case was imposed with the exclusion period, and thus, is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Determination on the first argument

In light of the following circumstances: (a) at the time of the instant tax investigation, the Plaintiff: (b) at the time of acquiring the instant building from bB, 30 million won; (c) the monthly rent was KRW 13.5 million; (d) around December 2006, the Plaintiff leased the instant building to Masa with the same condition and KRW 33.6 million; and (e) around January 201, the Plaintiff did not receive rent of KRW 5.6 billion from 3.5 million to Masa for rent of KRW 5 billion; and (e) from around September 2011, the Plaintiff did not receive rent of KRW 15.6 million from 5 billion to 5.6 billion to Mas, the Plaintiff did not appear to have received rent of the instant building from 1.65 million to 3.5 million to 5 million to Masa and ss, because it was difficult for the Plaintiff to view that the rent of the instant building was not changed to 3.5 million to 5.6 million to 5 million.5 million won.

However, the Plaintiff stated that “The Plaintiff was treated as a loan without receiving KRW 620,000,000 which was actually raised from Kimff.” However, the Plaintiff failed to submit objective data proving transaction relations between Kimff, and it is difficult to easily obtain the amount of money actually increased despite the Plaintiff’s assertion that it would have increased the deposit money. ③ The Plaintiff did not have any conflict with Ma as to motive for using the borrowed account at the time of the instant tax investigation, so it was repaid to Dodd’s account under the name of the Plaintiff, and the Plaintiff received the loan amount of KRW 50,000 (330,000,000) from 20,000,000 won for the principal and interest of the instant building (the amount of KRW 60,000,000,000,000,0000). However, the Plaintiff’s assertion that the Plaintiff did not have any special relation with the loan amount of KRW 24,000,000,000.

2) Judgment on the second argument

Article 47-3 (2) 1 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201; hereinafter "former Framework Act on National Taxes") provides that where there is an additional tax on the under-reported tax base by improper means, the sum of the amount equivalent to the under-reported tax base shall be either added to the payable tax amount or deducted from the refundable tax amount. The main sentence of Article 26-2 (1) provides that national tax may not be imposed after the expiration of the 10-year period from the date on which the taxpayer could not evade national tax or receive refund or deduction by fraudulent or other unlawful means, and that the Plaintiff may not be deemed to have received the above tax base and exemption from 20-year period from 200 to 150-year period from the date on which the said tax base and exemption was made remarkably impossible or considerably difficult to impose and collect taxes, and that the Plaintiff does not constitute an active act with the declaration of tax evasion or other unlawful means.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.