Appropriateness of a partner's method of estimating the amount of income of the partner decided as a result of an estimated investigation on the basis of comparative criteria

If the total amount of the income of other partners in the same business situation is false and the amount determined by the method of the estimation investigation and decision as the important part of account books and documentary evidence is determined, the method of the partner's right to investigate and determine the plaintiff's total income amount based on the total amount of the income which was determined by the estimation investigation and decision is not clear, and

Articles 159(5) and 169(2) of the Enforcement Decree of the Income Tax Act

Plaintiff

Head of Yongsan Tax Office

The disposition that the Defendant imposed global income tax of KRW 2,850,048 on the Plaintiff on April 24, 1981 and KRW 285,004 on the defense tax of KRW 2,85,000 shall be revoked.

Litigation costs shall be borne by the defendant.

The same shall apply to the order.

The facts that the Defendant imposed global income tax and defense tax on the Plaintiff on April 24, 1981 are no dispute between the parties concerned, and calculated Gap evidence 1-2, Gap evidence 2, Eul evidence 1-1, Eul evidence 1-2, Eul evidence 1-2, Eul evidence 1-3, Eul evidence 2-2, Eul evidence 2-2, Eul evidence 2-2, Eul evidence 3-2, Eul evidence 3-1, Eul evidence 3-2, Eul evidence 3-2, Eul evidence 3-2, Eul evidence 3-2 (written objection), Eul evidence 4, Eul evidence 5-2, Eul evidence 5-2, Eul evidence 5-2 (written objection), Eul evidence 5-2, Eul evidence 5-2 (written investigation of the name of the witness), Eul evidence 5-2 (written investigation), and the non-party's testimony and evidence 9-17, and the plaintiff did not present the tax base on the plaintiff's global income in Gangnam-gu.

The Plaintiff asserts that the Plaintiff’s disposition of imposition of global income tax and defense tax of this case is an unfair disposition against the substance over form principle and thus should be revoked, even though the total amount of income in 1979 was KRW 8,817,00,000, in comparison with the censorship by the competent office of education, which is the supervisory office, and the Defendant’s disposition of imposition of global income tax and defense tax of this case, based on the method of estimating the Plaintiff’s total amount of income in 1979 by disregarding the Plaintiff’s account book.

According to Articles 117, 118, and 120 of the Income Tax Act, and Article 169 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 9229, Dec. 30, 1978), the tax base and tax amount on a resident shall be determined based on the final return on tax base; where it is deemed that the return on tax base is not made or the contents of the submitted return on tax base are clearly unreasonable, the amount of income can be calculated based on the books and documentary evidence kept, and where it is possible to keep the books and documentary evidence; where there is no necessary documentary evidence in calculating the tax base, or where there is no other important part of the books and documentary evidence in calculating the total income amount of the business, it is possible to make a determination on the spot investigation by the books and documentary evidence kept, and where there is no reason to determine the amount of estimated income of the Plaintiff’s partner based on the right to estimate investigation or other method of estimate investigation, the method of calculating the amount of income of the non-party under the proviso to Article 15(2) of the Enforcement Decree of the same Act is reasonable.

Therefore, it is illegal for the defendant to impose the global income tax and defense tax of this case on the basis of the plaintiff's income amount determined by the method of a partner's position lacking rationality and feasibility. Thus, the plaintiff's claim of this case seeking its revocation is justified, and the costs of lawsuit shall be determined as per the disposition at the expense of the losing defendant.

Judges Yoon Sang-ho (Presiding Judge)