Requirements for estimated taxation by standard rate of income;

The estimated tax based on the standard rate of income is exceptionally acknowledged in cases where there is no tax base and documentary evidence of the taxpayer who served as the basis for the determination of the tax base and the amount of tax, or where it can not be used by the method of taxation based on the basis because the details are incomplete or false. Therefore, it is difficult to conduct a field investigation only if it is impossible to do so by the method of estimation, and the reasons that the tax disposition by the field investigation is more unfavorable than the disposition of taxation by the method of estimated taxation by the estimation,

Article 120 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994); Article 169 of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 85Nu859 delivered on March 10, 1987 (Gong1987,656) 86Nu663 delivered on June 23, 1987 (Gong1987,1252) 87Nu32 delivered on July 7, 1987 (Gong1987,1340) 94Nu1037 delivered on January 12, 1995 (Gong195Sang, 928)

Plaintiff 1 and 2 others, Counsel for the defendant-appellant-appellee

Gangwon Tax Office et al.

Seoul High Court Decision 93Gu27149 delivered on December 23, 1994

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

We examine the Plaintiffs’ grounds of appeal.

1. In light of the records, the court below's rejection of the allegation that the purchase price of construction materials of KRW 253,484,50,00, which amounts to 11 items of the plaintiffs' assertion, was omitted from the necessary expenses is just and acceptable, and there is no error of law by misunderstanding facts against the rules of evidence or by failing to exhaust a deliberation, such as the theory of lawsuit, or by failing to exhaust a serious deliberation. The argument is without merit.

2. The estimated tax based on the standard rate of income is exceptionally acknowledged in cases where there is no tax base and the account books and documentary evidence of the taxpayer, which form the basis for the determination of the tax base and the amount of tax, or where it is impossible to use them by the method of taxation based on the basis of the estimation because the contents are incomplete or false. Thus, it cannot be deemed that the requirement of the estimated tax investigation is satisfied solely on the ground that the disposition by the on-site investigation is more unfavorable than the disposition by the estimation, or that the taxpayer wants to investigate and determine by the method of estimation (see, e.g., Supreme Court Decisions 94Nu1037, Jan. 12, 1995; 86Nu663, Jun. 23, 1987; 85Nu859, Mar. 10, 1987).

In the same purport, the lower court is justifiable to have determined that there was no illegality in the Defendants’ decision on the spot investigation on the grounds that the Defendants could have calculated the tax base and tax amount of global income tax for 1990s on the grounds that the Plaintiffs were able to calculate the actual transaction price revealed by the books and documentary evidence kept by the Plaintiffs at the time of the instant taxation disposition, and that there was no significant violation of law such as the theory of lawsuit.

The Defendants recognized that only the amount of KRW 722,30,00, which is part of the purchase price of the site among the necessary expense items that are the basis for the determination of taxable income of the Plaintiffs, was falsely appropriated, and the remaining necessary expenses, except this, were reported and recorded by the Plaintiffs, and determined the tax base and tax amount based on the on-site investigation based on the fact that the actual cost was clarified through the subsequent verification work. As such, it cannot be said that it is impossible to conduct an on-site investigation and it cannot be said that the method of estimation is inevitable. Furthermore, the reasoning that the income rate recognized in the disposition of this case by the on-site investigation is higher than that of the Housing Construction and Sales Business Act 190, which is the same type of business, is higher than that of the Housing Construction and Sales Business Act 190, which is the same type of business, does not constitute a case where

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-soo (Presiding Justice)