(a) Whether each provision of Article 17(1) through (3) of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978) can be a standard for determining the time of acquisition following the acquisition of assets;

B. Criteria for determining the time of acquiring shares under Article 6 of the Addenda of the former Corporate Tax Act (amended by Act No. 3270, Dec. 13, 1980)

A. Each provision of Article 17(1) through (3) of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978) is merely a set of the business year of accrual of earnings and losses in calculating the income amount of a corporation for each business year, and it cannot be deemed that the time of transfer of assets or the time of acquisition of assets is defined in the calculation of the income amount of the corporation for each business year. Furthermore, Article 17(2) and (3) of the former Corporate Tax Act is merely related to the sale or transfer of assets, and it is not a provision regarding the acquisition of assets, and thus

B. In determining “the time of acquiring stocks” as referred to in Article 6 of the Addenda of the former Corporate Tax Act (amended by Act No. 3270, Dec. 13, 1980); Article 17(3) of the same Act cannot be the basis for the above reasons; and it cannot be seen that the time of acquiring stocks is the time of acquiring stocks for the purpose of imposing corporate tax. Thus, the time of acquiring stocks cannot be seen as the time of receiving stocks under Article 336 of the Commercial Act.

A. Articles 17(1) and 17(3)(b) of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978); Article 6 of the former Corporate Tax Act (amended by Act No. 3270, Dec. 13, 1980); Article 336 of the Commercial Act

Han-il, Attorney Park Jong-sung et al., Counsel for the plaintiff-appellant-appellant

Head of Daegu Tax Office

Daegu High Court Decision 85Gu307 delivered on August 29, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (the supplemental appellate brief was submitted after the expiration of the period, to the extent of supplement in case of supplemental appellate brief).

Article 17(1) of the Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978) provides that the year in which earnings and losses accrue for each business year of a domestic corporation shall be the year in which the date on which the earnings and losses are determined are included. Paragraph (2) of the same Article provides that the year in which profits and losses accruing from the sale of goods, products, or other products in each business year belongs shall be the year in which the date on which the goods, products, or products are delivered: Provided, That in cases where the domestic corporation is not delivered but it is possible to deliver it, Article 17(3) of the Corporate Tax Act provides that the year in which profits and losses accrue from the transfer of assets that do not fall under paragraph (2) of the same Article shall be the year in which the domestic corporation receives part of the proceeds in addition to the date on which the proceeds are settled or the date of registration of ownership transfer is made, in calculating the income amount of each business year of the domestic corporation, the period in which the profits and losses accrue from the sale or transfer of assets cannot be determined.

Meanwhile, Article 18-3 (1) of the Corporate Tax Act (amended by Act No. 3270, Dec. 13, 1980) provides that the interest on loans paid by a domestic corporation which owns stocks of another domestic corporation for each business year shall not be included in deductible expenses in calculating the income amount for each business year; Article 1 of the Addenda provides that this Act shall enter into force from January 1, 1981; Article 18-3 of the Addenda provides that the interest that the corporation that acquired stocks after this Act enters into force shall apply from the interest that the corporation first pays to the business year that commences after this Act enters into force. In determining "the time of acquiring stocks" as referred to in Article 6 of the Addenda, Article 17 (3) of the same Act cannot be the basis for determining "the time of acquiring stocks" as mentioned above, and therefore, it cannot be viewed that the restriction on acquisition of stocks is separately granted for the purpose of imposing corporate tax, and therefore, the time of acquiring stocks cannot be seen as the time of acquiring stocks under Article 336 of the Commercial Act.

According to the reasoning of the judgment below, the court below held that even if the plaintiff company paid part of the purchase price other than the down payment in the year 1980 when it acquired each of the above stocks, the acquisition price of each of the above stocks shall not be 1980 years. The defendant recognized the fact that the acquisition price of each of the above stocks is 1981, based on the adopted evidence. The defendant considered the acquisition time of each of the above stocks as 1981 and applied Article 18-3(1) of the Corporate Tax Act to the above stocks in accordance with Article 43-2 of the Enforcement Decree of the Corporate Tax Act (amended by December 31, 1980) on the method of calculating the non-deductible amount of interest paid in deductible expenses by applying Article 43-3(1) of the Corporate Tax Act to each of the above stocks. In light of the records, the above recognition and judgment of the court below are just and acceptable in accordance with the above legal principles, and it cannot be accepted from the above other opinion.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yellow-ray (Presiding Justice)