Plaintiff

Head of the tax office of distribution and one other

April 29, 2011

1. The plaintiff's claim is dismissed.

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

The head of the tax office of distribution shall revoke the imposition of value-added tax on August 22, 2007 against the plaintiff on 1st 7,381,04 won, 2nd 7,525,219 won, 2nd 7,203, 215,87 won, 203, 7,414,042 won, 203, 7,194, 95 won, 95 won, 2nd 7,92,15 won, 2004, 205, 12,863,016 won, 205, 207, 363, 208, 206, 363, 208, 206, 363, 207, 208, 206, 364, 208, 206, 207, 36363, 284, 2007.

1. Details of the disposition;

The following facts are either disputed between the parties, or acknowledged in full view of the purport of the whole pleadings in the descriptions of Gap evidence 1 through 4, Gap evidence 5-1 through 9, Gap evidence 6-1 through 5, and Gap evidence 7:

A. On September 6, 2006, the director of the Seoul Regional Tax Office issued a prior notice to the Plaintiff on the tax item column subject to investigation of the “integrated investigation of individual taxes (integrated investigation of related tax items, such as global income tax, value-added tax, source tax, etc.): “Tax items related to integrated investigation of global income tax, source tax, etc.: from January 1, 2003 to December 31, 2005; Value-added tax: January 1 to 2003 to October 1, 2006; “from September 14, 2006 to October 30, 2006; 0.1 to 0.30; 1 to 20.6.1 to 0.30; 1 to 20.6.1 to 20.3; 1 to 20.6.2 to the Plaintiff’s wife; and 1 to the Plaintiff’s tax item subject to investigation, including the global income tax, value-added tax, source tax, etc.; 1 to 2. 1.3.

B. On September 14, 2006, the revenue official of the Seoul Regional Tax Office started a tax investigation with respect to the Plaintiff and Nonparty 1, and at the time, the tax official stated the column for the purpose of the investigator’s certificate presented to the Plaintiff and Nonparty 1 as follows: “The suspicion of infaith, such as underreporting, etc. (Article 81-5(2)5 of the Framework Act on National Taxes)” and the investigation to determine the tax base and tax amount (Article 81-5(4) of the Framework Act on National Taxes).

C. A tax official belonging to the Seoul Regional Tax Office prepared an investigation report based on the results of such tax investigation by including the Plaintiff’s omission in filing a return on income, excluding the non-business expenses from necessary expenses, and notified the Defendants as taxation data.

D. According to the taxation data notified as above, the head of the tax office on August 22, 2007 notified the Plaintiff on the value-added tax of 1 year 202 as 8,446,090 won, the value-added tax of 202 as 8,748,680 won, the value-added tax of 1 year 203 as 8,163,360 won, the value-added tax of 203 as 8,282,140 won, the value-added tax of 1 year 204 as 7,898,770 won, the value-added tax of 2 years 204 as 8,349,530 won, the value-added tax of 1 year 205 as 13,802,67, the income tax of 206, the total income tax of 209, 207, the income tax of 2005 won reverted to the Plaintiff as 206, the income tax of 205 year 206 years 206.

E. On November 2, 2007, the Plaintiff filed an appeal with the Tax Tribunal on November 2, 2007. On November 23, 2010, each of the above corrective measures taken by the Director of the Tax Tribunal against the Plaintiff on August 22, 2007 and each of the above corrective measures taken by the Director of the Tax Tribunal against the Plaintiff on August 17, 2007 by the Director of the Tax Tribunal against the Plaintiff on August 22, 2007 is determined as follows: ① The above corrective measures taken by the Director of the Tax Tribunal against the Plaintiff on August 17, 2007 are found to have been recovered later after allocating water rates to the lessee (10,925,840 won in 201,194,070 won in 11,315,280 won in 203, 11,154, value-added tax in 205, 2005, 2083 and 300.

F. According to the above decision, on January 6, 201, the director of the tax office who distributed the value-added tax for the first period of 202 to the Plaintiff was 7,381,04 won, the value-added tax for the second period of 2002 to 7,525,219 won, the value-added tax for the first period of 203 to 7,215,887 won, the value-added tax for the second period of 2003 to 7,414,042 won, the value-added tax for the first period of 204 to 7,194,95 won, the value-added tax for the second period of 204 to 7,092,15 won, the value-added tax for the second period of 204 to 360, the income tax for the second period of 205 to 12,54, the total amount of the income tax for the second period of 206, the income tax for the remaining 200363 won to 1636.

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) Although the Commissioner of the National Tax Service did not have acknowledged that the Plaintiff’s contents of the tax investigation were of false suspicion as a result of an analysis, the Seoul Regional Tax Office’s selection of the Plaintiff as the subject of tax investigation pursuant to Article 81-5(2)5 of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006; hereinafter “former Framework Act on National Taxes”) without authority was unlawful, and each of the instant dispositions was made based on illegal tax investigation that did not comply with due process.

(2) On October 4, 2006, Nonparty 1 submitted to the tax official the details of the source of funds to acquire real estate owned by the public, including each real estate located in Seocho-gu Seoul ( Address 1 omitted) (hereinafter “instant real estate”). Therefore, the head of the Seoul Regional Tax Office did not have any reason to request Nonparty 1 to provide the financial transaction information from the financial institution, and used it for tax investigation after being provided with the financial institution according to customary practice. The information provision request is an unlawful act contrary to Article 4(1) of the Act on Real Name Financial Transactions and Confidentiality and Article 81-3 of the former Framework Act on National Taxes, and each of the instant dispositions based on such unlawful act is also unlawful.

(3) A tax official belonging to the Seoul Regional Tax Office did not accurately examine the data submitted by Nonparty 1, prepared an analysis report that there is insufficient financial resources to acquire the instant real estate, and then selected Nonparty 1 as a tax payer on the ground that Nonparty 1 was suspected of receiving evidence. Therefore, the selection of a person subject to such tax investigation is contrary to the provisions of Article 81-5 of the former Framework Act on National Taxes, which predicts the taxpayer’s loyalty, based on the data different from the fact.

B. Relevant statutes

The entries in the attached statutes are as follows.

C. Determination

(1) Judgment on the Plaintiff’s first argument

In full view of the purport of evidence evidence No. 1, the plaintiff's wife and non-party 1 purchased the real estate of this case in 2,867,00,000 won on June 10, 2004, and the source of the acquisition fund was unclear in light of the non-party 1's income or property. The director of Seoul Regional Tax Office determined that the non-party 1 acquired the above real estate as donated by the plaintiff in light of the plaintiff and non-party 1's income or property, their personal relations, etc., after analyzing the contents of the plaintiff's income return, the non-party 1 acquired the above real estate as a result of non-party 1's analysis, and it can be acknowledged that the plaintiff's tax investigation was conducted on September 6, 2006 by stating that it constitutes a case where there is clear evidence to prove omission or error, and that it was not a legitimate reason for the plaintiff's tax investigation under Article 81-5 (2) 4 of the former Framework Act's tax investigation under the premise No. 5 of the plaintiff 2's report of this case.

(2) Judgment on the second and third allegations by the Plaintiff

Comprehensively taking account of the purport of evidence Nos. 1, 2, and 5, the head of the Seoul Regional Tax Office’s overall arguments, following a proper review of the relevant materials submitted to the tax office, etc. prior to the tax investigation with respect to Nonparty 1, the head of the Seoul Regional Tax Office selected Nonparty 1 as the subject of the tax investigation. Nonparty 1 submitted the details of examination of the source of funds, such as the issue of this case, to the tax official on October 4, 2006, but failed to submit a considerable portion of the supporting evidentiary documents, and the Plaintiff and Nonparty 1 requested the tax official to submit evidentiary documents, etc. on several occasions during the investigation period. According to the above facts, it is acknowledged that the tax official of the Seoul Regional Tax Office asked Nonparty 1 about the taxpayer, and conducted a tax investigation by investigating related books, documents, etc., the Plaintiff’s allegation that it was legitimate under Article 81-5(2) and (4) of the Framework Act on National Taxes, Article 170 of the Income Tax Act, Article 170 of the former Value-Added Tax Act (wholly amended by Act No. 194).

3. Conclusion

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

[Attachment Form 7]

Judges Kim Hong-do (Presiding Judge)