early 2009Gu2373 ( December 30, 2010)

The instant disposition that included the processed expenses in the calculation of the amount of the commercial sales savings, etc. omitted from the report, and the disposition of this case is legitimate.

The disposition of this case is legitimate in the calculation of expenses for the cancellation of the commercial sales contract and the rental fees, and the exclusion of the personnel expenses and the sales agency fees appropriated for processing from the expenses.

Article 14 of the Corporate Tax Act, Article 15 of the Corporate Tax Act, Article 19 of the Corporate Tax Act

Article 26 of the Corporate Tax Act, Article 27 of the Corporate Tax Act, Article 40 of the Corporate Tax Act

2011Revocation of disposition of revocation of value-added tax, etc.

XX Co., Ltd

Head of the Daegu Tax Office

April 18, 2012

May 16, 2012

1. The plaintiff's claim is dismissed.

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

The disposition of imposition of value-added tax and corporate tax on March 9, 2009, which the Defendant imposed on the Plaintiff on March 9, 2009, is revoked.

1. Details of the disposition;

A. A. On January 2004, the Plaintiff newly constructed and sold at the Daegu-gu Seo-gu, Daegu-gu, 230-12, an underground second and fifth-story 14,336.61 square meters of the total floor area of 14,36.61 square meters (hereinafter “instant building”) to a company engaged in real estate sale, new construction, sales, and lease business.

B. The Defendant notified the director of Daegu Regional Tax Office of the results of the investigation of the tax offense against the Plaintiff, and adjusted the income amount for the business year of 2004 to 2007, and on March 9, 2009, issued a revised and imposed the value-added tax and the corporate tax as stated in the column of the tax amount imposed on the Plaintiff (hereinafter “instant disposition”).

(a) Gross income industry for cancellation of a commercial sales contract;

In the business year of 2004, 000 won which was omitted from the cancellation fee of commercial sales contract received by the plaintiff from Lee AA and two other parties (hereinafter referred to as "the cancellation fee of this case").

(2) Non-deductible of processing expenses

The plaintiff registered newCC and Gab, the head of the teaB, as the plaintiff's employee, as the plaintiff's employee, and deemed 00 won (200 won in July 1, 2004, 2005, 000 won in 2006, 000 won in 2006, and 2007, hereinafter referred to as "the benefits of this case") paid as wages from July 1, 2004 to December 31, 2007, as the processing expenses, and excluded it from deductible expenses.

(3) Non-Inclusion of sales agency fees in deductible expenses

On April 30, 2005, the Plaintiff deemed the purchase tax invoice supply price of 000 won (hereinafter referred to as "the sales commission of this case") received from the OO Development Co., Ltd., a sales agency (hereinafter referred to as "O development") as the processing expenses and excluded the same from deductible expenses.

(4) In the calculation of rental management expenses omitted reporting

The plaintiff received 1501 'PP' representative of 'PP' representative of 1501 of the building of this case and omitted income return (hereinafter 'the lease management expenses of this case') in the gross income.

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on June 4, 2009, but on December 12, 2010.

30. was dismissed.

[Ground of recognition] Facts without dispute, Gap evidence 1 to Gap evidence 4-4, Eul evidence 1-1 to Eul evidence 12-12, the purport of the whole pleadings

2. The plaintiff's assertion is as follows.

A. Of the cancellation fee of this case, 000 won is an intermediate payment not a down payment, so the Plaintiff is required to return it to the buyer, and thus, it should be excluded from the profit. The year to which the remainder of the cancellation fee belongs is not the year 2004, but the judgment of lawsuit on cancellation fee becomes final and conclusive.

B. The NewCC and ParkD actually take charge of the sale of the instant building, building management, etc., and thus, the instant benefits are not processing expenses but actual deductible expenses.

C. Since the OO Development Co., Ltd., a parcelling-out agency, vicariously sells most of the instant buildings, the Plaintiff paid the sales commission of this case, including cash 000 won, as the actual sales agency fee, it is deductible expenses.

D. The Plaintiff’s treatment of 000 won for the instant rental fee as repayment of the Plaintiff’s provisional loan to the Plaintiff’s representative director, and thus, cannot be deemed an omission of income return.

3. Related statutes;

Attached 2 is as stated in the "related Acts and subordinate statutes".

4. Determination

A. Judgment on the Plaintiff’s assertion No. 2. A

(1) The principle of confirmation of a right refers to a method of calculating income when a right, which is a cause of income, exists between the time when the right is established and the time when the income is realized, and it is deemed that there exists income when the right is not the time when the income is realized. The purpose of this principle is to allow a prior taxation of uncertain income under the premise that it is realized in the future, and to prevent a taxpayer from sustaining income depending on his or her own income for a taxable year. Even if it is not necessary until the income is realized, it shall be considerably mature and determined in light of the possibility of realizing the right to receive income. Thus, it is merely established without this degree. The issue of whether the right to receive income is mature and finalized should be uniformly determined by taking into account the specific nature and substance of each individual right and various legal and factual matters. Even if a claim that becomes a cause of income accrues, it shall be objectively determined that the debtor’s income is not subject to corporate tax, and thus, it shall be objectively determined that the debtor’s income cannot be recovered through the debtor’s bankruptcy or other specific circumstances.

Unless special circumstances exist, such as that if a tax authority received a written confirmation from a taxpayer that a certain part of a transaction is a processing transaction during the course of a tax investigation, it is difficult for the tax authority to readily deny the evidence of such written confirmation only by means of evidence of the fact that such written confirmation was forced against the intent of the originator, or that it is difficult to consider it as evidence of the specific fact due to lack of the content thereof, etc. (see, e.g., Supreme Court Decision 2001Du2560, Dec.

(2) In light of the above legal principles, in light of the following circumstances acknowledged by the overall purport of evidence Nos. 13, 14-1, Eul evidence Nos. 15 through 22, Eul evidence Nos. 26 through 40, Eul evidence Nos. 58 and 59, it is reasonable to deem that the plaintiff has confirmed that the plaintiff included the cancellation money of this case in gross income for the business year 2004, and the plaintiff's assertion is justified.

(A) Around January 2009, the Plaintiff’s representative director, BB prepared a written confirmation that the sales contract and intermediate payment (the second down payment seems to mean the second down payment) received from one other (the second down payment) was privately used without appropriating it as profit (No. 14-1), and on February 3, 2009, the Plaintiff’s tax investigation was conducted, and on February 3, 2009, the Plaintiff’s question, “I will not report and omit 000 won such as the sales deposit and deposit in the personal account, and will be useful for private use.” At the time, I would like to enter the corporate fund into the personal account without entering the personal fund into the personal account.” (No. 13-1).

(B) According to the contract for sale in lots (Evidence Nos. 15, 17, 19, 22) the Plaintiff may cancel the contract when the buyer delays the intermediate payment and the balance, and the total contract deposit belongs to the Plaintiff (Article 14 of the contract), and the buyer agrees to pay the down payment in two installments. The letter of demand and the letter of demand sent by the Plaintiff to the FF also indicate "the second down payment" as "the second down payment", and the Plaintiff asserted 00 won as the second down payment in the lawsuit for return of unjust enrichment against the Plaintiff (Tgu District Court 2005Gahap5991) on the cancellation money of this case raised by the FF against the Plaintiff, and Kim GGG also testified as the second down payment.

(C) On April 30, 2010, when reporting and paying corporate tax in 2004 on April 30, 2010, the Plaintiff and the Plaintiff’s representative director: (a) was sentenced to a fine for committing a crime of violating the Punishment of Tax Evaders Act (Tgu District Court 2009No4475) and became final and conclusive as they were, in its entirety, that the instant termination money deposited in the name of commercial contract deposit was intentionally omitted from corporate income and evaded corporate tax in 2004.

(D) The Plaintiff notified the buyer of the cancellation of the contract on September 30, 2004, after paying the first down payment and part of the second down payment, as the remainder of the second down payment was not paid within the due date.

B. Judgment on the Plaintiff’s assertion No. 2.B.

According to Article 19(1) and (2) of the former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007), deductible expenses recognized under the Corporate Tax Act shall be the amount of deductible expenses incurred from transactions which reduce the net assets of the relevant corporation, except as otherwise provided for in the Act or other Acts and subordinate statutes. The deductible expenses shall be the amount of deductible expenses recognized under the Corporate Tax Act, which are generally accepted or directly related to profits, except as otherwise provided for in the Act or other Acts.

In light of the following circumstances, it is reasonable to view that the instant benefits are processed expenses, and therefore, the Defendant’s inclusion of the entire amount in deductible expenses is lawful, and the Plaintiff’s assertion is without merit. It is reasonable to deem that the instant benefits are included in deductible expenses, in light of the following circumstances: (a) evidence No. 6-1, evidence No. 11, 23, evidence No. 48-1 through 53, evidence No. 66-1, and evidence No. 66-2.

(1) On December 3, 2008, the Plaintiff’s representative director: (a) around December 2008, newCC (the age of 82) and long-term gamblingD (the age of 79) entered the company as an employee without having worked as a legal entity; (b) disclosed KRW 000 in the name of paying wages to make a private use of funds for the principal’s investment; and (c) written a written confirmation (Evidence 48-1) that “I would have been making a private use of funds for the principal’s investment.” (d) upon undergoing a tax investigation on or around February 3, 2009, the Plaintiff’s representative director stated that “I would have been partly downloaded with money to the president, what is the reason why I would have paid for the principal, and that I would have been making it difficult and most of them have used.”

(2) NewCC (1926) was the age of 78 years at the time of entry in 2004, and around 2007, it was difficult for her to move with urology, and died on February 20, 2010. ParkDD (1929) was the age of 75 years at the time of entry in 2004, and operated the general restaurant called PP XX (53) on the second floor of the instant building from September 15, 2005 to August 16, 2006, and died on October 30, 2009.

(3) The Plaintiff had 5-6 licensed real estate agents located in the office, and selected a specialized sales agency and a building management service company separately, and conducted sales agency, promotion of sales, and building management. Although benefits were paid to the accounts of newCC and ParkD each month, it was deposited in cash after opening up, or transferred to another account or to a substitute or private fund. Some of the fund deposit clients were confirmed as the wife of the nextB and the next BB (Evidence No. 51). At the time of tax investigation, the Plaintiff’s current status of employees secured at the time of tax investigation (Evidence No. 49) did not have the name of newCC and ParkD.

C. The plaintiff 2.C. Judgment on the argument

In light of the following circumstances, it is insufficient to acknowledge that the Plaintiff was liable to pay the sales fee of this case to the O development only with the statements as set forth in 10, 12, 7, 13-1 through 5 of the evidence Nos. 6-10, 12, 13-1, and 13-5, and the testimony of the witness KaK, and rather, considering that the sales fee of this case is recognized by the statements as set forth in the evidence Nos. 41-1 through 47, and Nos. 63-1 through 46, it is reasonable to view that the sales fee of this case is the processing expenses, and therefore, the Defendant

(A) On January 3, 2009, the Plaintiff’s representative director: (a) drafted a confirmation document stating that the amount of KRW 000 out of the purchase tax invoice of KRW 000,000 received excessively from OO development, the representative director’s management account deposit of KRW 000,000, the representative director’s account deposit of KRW 000,000, the representative director’s deposit of the next BB check, was reverted to the next BB; and (b) even if the tax investigation was conducted on February 3, 2009, the Plaintiff did not actually pay the sales agency fee of KRW 00,00,000, the investigator’s question of whether the omission of corporate income is recognized by receiving the excessive tax invoice and appropriating the processing expenses. The sale was not well-known; (c) the Plaintiff stated that some of the tax invoices received from the corporation or the corporation’s sales agency and the corporation’s sales agency’s sales agency were received the same as 13.

(B) The part of the table which the Plaintiff’s employee deposited in the O Development’s deposit passbook is not the mobile phone number of Y but the mobile phone number of L appears to have been recorded and managed by L as the Plaintiff’s employee created and managed the deposit passbook under the O Development’s name.

D. Judgment on the Plaintiff’s assertion No. 2. D

If a taxpayer finds any revenue, such as omitted sales, from filing a return on the tax base of corporate tax, etc., the competent tax office may include the omitted revenue in the gross income. If the taxpayer omits the return on the revenue to be included in the deductible expenses, not only the omission of the return on the revenue to be included in the gross income in filing the return on the tax base, etc., but also the omission of the return on the expenses to be included in the deductible expenses, the existence and amount of such expenses shall be determined by the verification of the claimant to include the expenses in the deductible expenses (see Supreme Court Decision 91Nu10695, Jul. 28, 1992). Even if the amount received by the corporation through sales is included in the provisional account, which is a final and conclusive account, in which the cash, the other account, was entered into the accounting as a whole, and if it is found that the content of the provisional account was a short-term loan transaction from the representative director and that it is an obligation against the representative director, such transactions may not result in a change in the corporation’s net assets or an increase in the corporation’s profits (see Supreme Court Decision 201201Du.

According to each of subparagraphs 13, 13, and 55-1 and 2, it is recognized that the plaintiff omitted the income return of KRW 000,00, which is part of the income of the rental management expenses of the "O", and thus, this shall be included in the plaintiff's gross income. Even if the representative director deposited the rental management expenses of this case with the personal account of the second director B, as alleged by the plaintiff, and disposed of them with the representative director's repayment of the provisional loan, such repayment amount cannot be included in the plaintiff's deductible expenses because it is unrelated to the plaintiff's profit or expenses. Thus, the disposition of this case on the same premise is legitimate, and the plaintiff's assertion is without merit.

5. Conclusion

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