[1] The case holding that interest income tax under the Income Tax Act does not be subject to taxation on the amount paid at the time when the Urban Development Corporation returned to the buyer by cancellation of a housing site sale contract

[2] Where a withholding agent collects and pays the tax amount on income which is not subject to withholding from a source taxpayer, whether the source taxpayer can claim the amount equivalent to the claim for repayment against the withholding agent as unjust enrichment (affirmative)

[1] The case holding that interest for the term payment that the Urban Development Corporation returned to the buyer by cancellation of the housing site sale contract shall not fall under any of the subparagraphs of Article 16 of the Income Tax Act, and thus, it shall not be subject to taxation of interest income tax

[2] In the withholding tax system, if a withholding agent collects and pays a tax amount on income which is not subject to withholding from a withholding agent, or collects and pays it in excess of the amount of tax to be collected from a withholding agent, the claim for repayment therefrom shall be reverted to the withholding agent who is not the original taxpayer, and this shall be deemed to have accrued without any legal cause in relation to the original taxpayer. Therefore, the original taxpayer may claim the amount equivalent to the claim for repayment against the withholding agent

[1] Article 16 of the former Income Tax Act (amended by Act No. 5503 of January 13, 1998) / [2] Articles 51(1) and 52 of the former Framework Act on National Taxes (amended by Act No. 6303 of December 29, 200), Article 741 of the Civil Act

[2] Supreme Court en banc Decision 88Nu6436 delivered on June 15, 1989 (Gong1989, 1096) Supreme Court Decision 88Nu6412 delivered on November 14, 1989 (Gong1990, 49) Supreme Court Decision 88Nu6610 delivered on February 13, 1990 (Gong190, 679), Supreme Court Decision 89Nu2912 delivered on April 27, 1990 (Gong190, 1182), Supreme Court Decision 92Nu14250 delivered on December 25, 1994 (Gong195Sang, 513), Supreme Court Decision 96Nu29380 delivered on July 25, 1997 (Gong199838 delivered on July 25, 200)

Plaintiff

Daegu Metropolitan City Urban Development Corporation (Attorney Park Jin-jin, Counsel for defendant-appellant)

Daegu District Court Decision 2002Na8245 delivered on October 23, 2002

The part of the judgment of the court below on the claim for refund of withholding tax amount is reversed, and that part of the case is remanded to the Daegu District Court Panel Division. The remaining grounds of appeal are dismissed.

1. On the part of the claim for refund of withholding tax amount

A. According to the reasoning of the judgment of the court below and the judgment of the court of first instance cited by the plaintiff, the court below determined that the defendant, on September 10, 1996, paid 38,370,210 won to the above 200 won of interest income from the above 105 won of interest income under the Income Tax Act (the above 205 won of interest income from the above 300 won of interest income from the above 105 won of interest income from the above 300 won of interest income from the above 105 won of interest income from the above 1996, the above 205 won of interest income from the above 105 won of interest income from the 205 won of income from the above 105 won of interest income from the above 305 won of interest income from the above 190 won of interest income from the 205 won of income tax from the above 105 won of interest income from the above 197 won of interest income from the above 1050% of interest income tax from the above 1050% of interest income from the above 197.

B. However, we cannot agree with the above determination by the court below in the following respect.

First of all, Article 16 of the former Income Tax Act (amended by Act No. 503 of January 13, 1998) lists interest income under each subparagraph. Specifically, the Income Tax Act provides for the interest and discount amount (No. 1) of bonds or securities issued by the State or a local government, interest and discount amount (No. 2) of bonds or securities issued by a domestic corporation, interest and discount amount (including installment savings, installments, deposits, and postal transfer; hereinafter the same shall apply) of bonds or securities issued by a domestic corporation, interest and discount amount (No. 3) of deposits received in the Republic of Korea (including installment savings, installments, deposits, and postal transfer; hereinafter the same shall apply), profits (no. 4) from mutual credit or credit installments under the Mutual Saving and Finance Company Act (excluding trust bonds and securities investment trust), interest and discount amount (No. 6) of bonds or securities issued by a foreign domestic branch or a domestic business office of a foreign corporation, interest and discount amount (No. 7) of deposits received overseas, profits from bonds or securities prescribed by the Presidential Decree (no. 10).

However, it is clear that the monetary amount paid by the Defendant does not fall under any of the above subparagraphs, which is not subject to interest income tax.

Next, if a withholding agent, in the withholding tax system, collects and pays a tax amount on income which is not subject to withholding from a source taxpayer in excess of the tax amount to be collected or paid, the claim for the repayment of such tax amount shall belong to the withholding agent, not the source taxpayer (see Supreme Court Decision 2001Du8780, Nov. 8, 2002). This shall be deemed to have accrued without any legal cause in relation to the source taxpayer. Therefore, the source taxpayer may claim the amount equivalent to the claim for the repayment against the withholding agent as unjust enrichment.

C. Ultimately, this part of the judgment of the court below is erroneous in the misapprehension of the legal principles as to interest income under the Income Tax Act and the legal principles as to unjust enrichment under the withholding tax system, and thus, it cannot be reversed without the need to determine the remaining grounds of appeal

2. On the second claim for refund of excess interest refund

The court below rejected the plaintiff's claim on this part because there is no evidence to support that the plaintiff returned the interest that he received excessively from the defendant while forced by the defendant. In light of the circumstances stated in its reasoning, it is difficult to view that the defendant's excessive payment and recovery of interest constituted an illegal act. In light of the records, the court below's decision is just and acceptable, and there is no error of law such as failing to conduct a deliberation or contrary to the rules of evidence, or contrary to the principle of proportionality or equity and the principle of good faith.

This part of the grounds of appeal cannot be accepted.

3. Therefore, of the judgment of the court below, the part of the claim for the return of withheld tax amount is reversed, and that part of the case is remanded to the court below. The remaining appeal is dismissed. It is so decided as per Disposition by

Justices Shin Hyun-chul (Presiding Justice)