Income 2013-0064

The defendant's rejection disposition against the defendant's request for correction of this case is legitimate.

The Defendant’s rejection disposition against the Plaintiff regarding the instant claim for correction is justifiable in applying a wrongful calculation, and it does not constitute a violation of the good faith principle.

Article 41 of the Income Tax Act

Seoul Administrative Court 2013Guhap63810

KimA

The Director of Gangnam District Office

May 2, 2014

June 20, 2014

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on March 22, 2013 is revoked in the amount of KRW 21,945,000 as global income tax for the year 201.

1. Details of the disposition;

A. A. On January 5, 2005, the Plaintiff, the husband of the State, set a rent of 2.5 million square meters for an OO-dong 00 O-dong 200.4 square meters (hereinafter “instant land”) from LA, the husband of the State, and constructed a new building of the first and the sixth floor above the ground (hereinafter “instant building”) on that ground, and completed registration of preservation of ownership in the name of the Plaintiff on April 12, 2005, and operated a real estate rental business.

B. On January 1, 2012, the Plaintiff decided to increase the amount of KRW 3.5 million per month to the DamageA and the tea, and paid KRW 3.5 million per month to the DamageA.

C. When the Plaintiff reported and paid global income tax for the year 201, the Plaintiff included the rent of KRW 30 million in the instant land (=2.5 million x 12 months) as necessary expenses.

D. The DamageA operates 'O' by leasing a part of the instant building from the Plaintiff.

E. On October 2012, the director of the Seoul Regional Tax Office sent to the Plaintiff the following information:

In our Office, you analyzed the details of your return on the second half of 2011 and the first half of 2012, as follows. The following analyses based on actual business (on-site verification) are confirmed, and the value-added tax is faithfully reported and paid to the competent tax office until October 19, 100 according to the actual business performance of your.

Details of analysis

E. As a result of the analysis of E.I. 201 and 1. 2012, it is determined that there is a high possibility of underreporting the amount of revenue unless there are special circumstances, such as the discovery of suspected facts as follows. This is the main time after a revised return is filed in good faith to guide the selection of individual analysis subjects, and if a revised return is not implemented or is faithfully reported, it is possible to suffer disadvantages, such as being selected as tax investigation subjects.

○ Facts of false report

In comparison with the market price of the same location and the report of the rental fee for the neighboring rental business operator, there is a suspicion of underreporting the amount of revenue by reporting a significantly low rental fee.

- suspicions of omitting revenue by leasing at a low price to persons with special interest;

- suspicions of omission in filing a separate collection of management costs;

- The suspicion of underreporting the difference in the rent for each floor on the same building;

F. On November 20, 2012, the Plaintiff drafted a lease modification contract stating that “The difference between the DamageA and the instant land shall be increased by KRW 12 million per month, but shall be retroactively applied from July 1, 201. However, in consideration of the Plaintiff’s circumstances, the difference between the existing rent and the total amount shall be settled within 50% and one year.”

G. 1) According to the above modified contract, on or before December 2012, grandchildren paid the Defendant a revised return and payment of the global income tax for the second term portion in 2011 and the first term portion in 2012, and for the year 2011. The Plaintiff returned a revised return and payment of the global income tax for the year 200,000 won from July 1, 201 to December 31, 2011 (rent 10,450,00 = 13.2 million won = (=1.2 million won x 1.2 million) - 2750,00 won (=2.5 million won x 2.5 million x 1.6) x 2750,00 won to the Defendant on December 21, 2012.

2) On March 2, 2013, the Defendant rejected the Plaintiff’s claim for correction on the ground that “the amount to be included in necessary expenses in the calculation of income amount” against the Plaintiff is the total amount of expenses corresponding to the total amount of income in the pertinent year, and that the rent was paid at the end of each month, even though it is a general practice, it is difficult to view that the Plaintiff received rent based on the real estate lease agreement, which was formulated retrospectively between the husband and wife. The effect of the avoidance of wrongful calculation is limited to the calculation of the resident’s act and does not affect the other party’s act.” (hereinafter “instant disposition”).

3) The Plaintiff appealed and filed a request for examination with the Commissioner of the National Tax Service on June 24, 2013, but was dismissed on August 28, 2013.

H. The Plaintiff deposited KRW 70,810,000,000 on May 14, 2013, and KRW 781 million on November 21, 2013, with the account under the name of the DamageA.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 14 (including each number; hereinafter the same shall apply), Eul

Each entry of evidence Nos. 1, 2, and 4 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

1) In concluding a lease modification contract with the content that increases the rent by mutual agreement according to the guidance of the director of the Seoul Regional Tax Office on the revised return of value-added tax, the Plaintiff and grandchildren agreed to settle the increased rent in full within 50% and 1 year within 6 months in consideration of the Plaintiff’s circumstances at the time of concluding the revised contract. Therefore, the above revised contract should not be denied solely on the ground that the Plaintiff and grandchildren were married with a special relationship. Moreover, the Plaintiff and grandchildren concluded the revised contract as above in accordance with the revised report of the director of the Seoul Regional Tax Office, and received a revised return of the amount of income subject to the revised calculation from the tax office, etc., and thus, the Plaintiff’s claim for correction was not related to the Plaintiff’s unlawful calculation, under the premise that the Plaintiff’s claim for correction was not related to the Plaintiff’s unlawful calculation, which is a violation of the principle of no taxation without the law.

2) In the instant case, there was a public opinion expressed by the tax authority, i.e., “information on revised value-added tax return.” After entering into a lease agreement with the Plaintiff, grandchildren paid the excess rent pursuant to the above revised agreement with the value-added tax and the comprehensive income tax. The Plaintiff, as the Plaintiff, was aware that the excess rent would be deemed necessary expenses corresponding to the total amount of global income tax that reverts in 2011, and there is no reason to believe that such excess rent would be deducted. Accordingly, the instant disposition is in violation of the good faith principle under Article 15 of the Framework Act on National Taxes.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 41 (1) of the former Income Tax Act (amended by Act No. 1146 of Jan. 1, 2012) provides that "the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment may calculate the amount of income in the relevant taxable period regardless of the resident's act or calculation, where it is deemed that an increase in the amount of income is unreasonably reduced due to a transaction with the residents who have special relationship with the said resident, as well as the subsequent revised amount of 0.0 billion won after the revised amount of 10 percent of the value of the relevant building, which was not reported for 10 months after the revised amount of 20.0 billion won, the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 2358 of Feb. 2, 2012) provides that "the relative of the relevant resident shall be one of the subsequent revised amounts of 20 million won or more, which is the market value of the relevant land, which was not reported for 200 million won or more.0 million won."

2) In addition, in order to apply the principle of trust and good faith to the acts of the tax authorities in tax and legal relations, the tax authorities must issue a public opinion list that is the subject of trust to taxpayers, the tax authorities should not have any reason attributable to taxpayers with respect to the trust of the tax authorities, and the taxpayer should trust the opinion list and trust what is, and the tax authorities should make a disposition against the above opinion list, thereby infringing the taxpayer's interest (see Supreme Court Decision 2007Du7741, Oct. 29, 2009). In addition, in order to violate the principle of trust and good faith, the disposition of this case must have issued a public opinion list that is the subject of trust to taxpayers, such as that the tax authorities should recognize the difference of the land of this case when it is below the market price or increase the difference of the land of this case as necessary expenses, and the Seoul Director General of Seoul Regional Tax Office should not make the Plaintiff lease the land to the Plaintiff more than the market price of this case, but rather it should have under-reported the Plaintiff.

3) Therefore, the Plaintiff’s above assertion is without merit, and the instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Judge Ha-AA

Judges Gangwon-A

Judge AAA