Appellate Court 2015No2034 ( December 30, 2015)

In an appeal litigation seeking revocation of a disposition of increase or decrease, the tax amount on the original reported portion shall be reduced due to the possible difference in arguments, together with the grounds for the initial report.

The imposition of tax by excluding the negative income of other persons according to the decision of adjudication violates the principle of prohibition of disadvantageous change, and thus is null and void. In an appeal litigation seeking cancellation of the disposition of increase or decrease, the taxpayer can contest not only the grounds for tax authorities' increase or decrease but also the excessive reasons for the initial report.

2016Guhap2359 The revocation of revocation of a revocation of global income tax refund or rectification

○ ○

BB Director of the Tax Office

December 1, 2016

January 12, 2017

1. As to the Plaintiff on September 6, 2013:

(a)the portion of the imposition of 00,000,000 won (including additional taxes) of the global income tax in 2009 exceeds 00,000,000,000;

(b)the portion exceeding KRW 000,000,000 (including additional duties) of the imposition of global income tax in 2011;

C. Of the imposition disposition of global income tax of KRW 000,000,000 (including additional tax) in 2012, the portion exceeding KRW 000,000 (including additional tax)

Each cancellation shall be revoked.

2. On January 13, 2016, the Defendant’s disposition imposing global income tax of KRW 000,000,000 (including additional tax) on the Plaintiff for the imposition of global income tax of KRW 000,000 (including additional tax) shall be revoked.

3. The costs of lawsuit shall be borne by the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff reported and paid comprehensive income tax on the premise that the Plaintiff obtained rental income based on the following equity ratio with respect to AA building located in Seocho-gu Seoul Metropolitan Government 000-0 and BB building located in Gangnam-gu Seoul Metropolitan Government 000-0.

B. The Plaintiff and Nonparty ○○, the father of the Plaintiff, filed a comprehensive income tax on the premise that the Plaintiff and Nonparty ○○, the Plaintiff’s father, obtained rental income based on the following lease terms with respect to the CCTV located in Gangnam-gu Seoul Metropolitan Government 000-00.

C. On September 6, 2013, the Defendant reported and notified the Plaintiff of the total global income tax (including additional tax; hereinafter the same shall apply) 00,000,000 won (including the amount of global income tax for 2008, 000, 000, 000, 00, 000, 200,000, 200,000, 200,000, 200,000, 200,000, 2010, 2011, 200,000,000,000,000,000 for the year 2012, 2011, and 00,000,000,000,000,000 won for the year 2012).

D. On November 29, 2013, the Plaintiff appealed the total amount of 00,000,000 won by filing an objection, and filed an appeal with the Tax Tribunal on August 26, 2014.

E. The Tax Tribunal rendered a decision to accept the Plaintiff’s claim on December 30, 2015, on the ground that the title trust of the AA building and BB building shares was not the Plaintiff but the Plaintiff, and that the ○○○ leased the said her mother to a new 00 person as the actual lessee of the CCTV.

- The marking of the order: each imposition of the global income tax on the Plaintiff on September 6, 2013 (00,000,000,000 for global income tax for the year 2008,000,000 for the portion belonging to the year 2009,000,000 for the portion belonging to the year 2010,000,000 for the portion belonging to the year 2010,000 for the portion belonging to the year 2011,00,000 for the year 200,000 for the portion belonging to the year 2012, 00,000 for the portion belonging to the year 200,000,000 for the Plaintiff and the actual income earner of △△△△△△△ Group as the Plaintiff, shall be corrected to exclude each tax base and tax amount from the sum of the tax base and tax amount for the Plaintiff by applying the provisions of wrongful calculation method.

F. In accordance with the purport of the decision of the Tax Tribunal, the Defendant, on January 13, 2016, reduced or increased the total amount of tax assessed against the Plaintiff (including the initial amount of tax paid) as follows.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 3, 4, 11, and 12, the purport of the whole pleadings

2. Whether the instant disposition 2 is lawful

(a) AA building and BB building - 2009, 2010, 2011;

(i) relating to false repair costs:

A) Facts of recognition

(1) In the relevant case on July 24, 2015, the director of the Seoul Regional Tax Office announced the results of the investigation that the title truster of the AAA building and the BB building Kim △△△△△△△△△, and Kim △△△△△△○.

(2) According to the foregoing findings, the ○○○○○ filed a revised return on the comprehensive income tax ( July 21, 2015) and the payment ( July 22, 2015) by adding the rental income with respect to the shares of △△△△△ to its own rental income.

(3) On July 14, 2015, the confirmation letter by ○○○○ on July 14, 2015 stated that the AAA building, Kim △△△ building, Kim △△△△△△△△△△△△△△△△△△△△

(4) On July 14, 2015, the confirmation letter of Kim △ and Kim △△△ on July 14, 2015 stated that the relevant deposit account in the name of Kim △ and Kim △△△ was opened and managed by Lee ○○.

(5) Meanwhile, on September 6, 2013, the Defendant imposed global income tax on the Plaintiff on the Plaintiff, denied the false repair cost corresponding to the shares of Kim △△△△△△△△△△△ as indicated in the following table, thereby adding them to the Plaintiff’s income amount. In making a correction in accordance with the decision of the Tax Tribunal, the rental income amount corresponding to the shares of Kim △△△△△△△△△△△△△△ was excluded from the Plaintiff’s income amount,

[Ground of recognition] Facts without dispute, Gap evidence 3, Gap evidence 6-1 and 2, the purport of the whole pleadings

B) Determination

According to the above circumstances and the above facts of recognition, it is reasonable to deem that the title truster is not the Plaintiff, but the title truster is ○○○. However, since the tax amount following the disposition of this case includes the false repair cost corresponding to the Kim △ and Kim △△△△△ shares, this part of the tax amount should be additionally reduced and the reasonable tax amount should be re-calculated.

In regard to this, the defendant asserts that it is not allowed to add an illegal cause that the plaintiff did not dispute at the stage of appeal to the administrative litigation. However, the addition of illegal cause is not an addition of the subject matter of lawsuit, but an addition of the means of offence and defense, and there is no ground to limit the means of offence and defense in the administrative litigation to the means of offence and defense in the previous trial procedure. Therefore,

2) As to prohibition of disadvantageous changes

If the result of a decision issued by the Tax Tribunal on the revocation trial of the imposition of global income tax increases the tax base as a result of the decision made by the Tax Tribunal, such decision is null and void as it goes against the principle of prohibition of disadvantageous change under Article 79(2) of the Framework Act on National Taxes, and accordingly, the portion exceeding the original amount of the disposition is null and void as a matter of course (see Supreme Court Decision 2003Du278, Dec. 9, 2004).

However, according to the aforementioned circumstances, the tax base of the other taxable period is entirely reduced in accordance with the decision of the Tax Tribunal, but only with regard to the imposition of global income tax in 2010, the amount of income increases to KRW 00,000,00, which results in a disadvantageous consequence to the claimant, rather than the claimant. As such, the relevant decision is null and void, contrary to the principle of prohibition of disadvantageous change under Article 79(2) of the Framework Act on National Taxes, and accordingly, the imposition of global income tax in 2010, which has been increased and corrected, should not be limited to the portion exceeding the amount of the original disposition reduced according to the

(b)CC 2011, 2012

1) Facts of recognition

A) In 2005, since the second half of 2005, the punishment for the provision of a sexual traffic place was strengthened. On December 1, 2005, 2005, the Plaintiff entered into a contract with the Plaintiff to lease the telecom to the Plaintiff to operate the telecom.

B) After that, the Plaintiff was issued a summary order of KRW 5 million due to the provision of a sexual traffic place. On August 1, 2009, the Plaintiff entered into a contract on August 1, 2009 with the Plaintiff’s lease the telecom to Kim Jong-tae to operate the above telecom.

C) Money management for KRW 500 million and monthly rent of KRW 40 million received from new0, and custody of business accounts and money deposit and withdrawal from funds in the name of the Plaintiff and Kim Jong-dong were all taken charge of KRW 00,000 according to the direction of this ○○.

[Ground of recognition] Facts without dispute, entry of Gap evidence 3, 9, and 10, the purport of the whole pleadings

2) Determination

A disposition to increase tax base and amount of tax is not a disposition to additionally determine only the tax base and amount of tax previously reported by the original taxpayer or determined by the tax authority without additional determination of the tax base and amount of tax as they are, but also a single tax base and amount of tax are determined again, including the tax base and amount of tax finalized in the initial return or determination. Thus, regardless of the lapse of the objection period against the initial return or determination, only the disposition to increase tax becomes subject to adjudication in the appeal litigation regardless of whether the initial return or determination has expired, and whether the amount of tax is unlawful in an appeal litigation seeking revocation of the disposition to increase tax base and amount of tax should be determined on the basis of whether the initial return exceeds a legitimate tax amount. The reason for excessive return or correction of the tax authority's tax base and amount of tax is merely an illegal reason supporting the illegality of the disposition to increase tax base and amount of tax. All appeals litigation on the request for correction or disposition of tax amount are filed with the taxpayer for an excessive return of tax base and amount of tax, and it is inconsistent with the protection of the rights and interests of the taxpayer or the litigation economy (see Supreme Court en banc Decision 20137Du131313.

According to the circumstances and facts of the above disposition, it is reasonable to view that the actual rental business operator of theCC and the Plaintiff and Kim Jong-chul lent only the name for the purpose of evading criminal punishment of the ○○○○○. However, the disposition of increasing or decreasing global income tax in 2011 and 2012 against the Plaintiff includes the Plaintiff’s tax return and payment amount, and the part is deemed to have the liability to pay taxes to the ○○○, other than the Plaintiff, on the grounds that the Plaintiff is dissatisfied with this part, and therefore, the reasonable tax amount should be calculated by additionally reducing the tax amount.

(c) Calculation of justifiable tax amount;

If the reasonable amount of tax is recalculated by reflecting the Plaintiff’s claims on the false repair costs in relation to AAA building, BB building, and the reported and paid amount relating toCC, it is as listed below:

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.