Seoul Administrative Court 2014Guhap52688 ( October 13, 2014)

If the amount omitted in sales of a corporation is arbitrarily disbursed for private use, etc. of an individual, the personal account shall not be deemed a borrowed account of the corporation.

The Plaintiff cannot be deemed as a borrowed account of a legal entity because the Plaintiff had already used considerable funds for personal purposes beyond the control and management of the legal entity, and even if some funds were transferred to the account in the name of the legal entity after the date of establishment of the tax liability, it does not affect the tax liability already incurred.

2014Nu56071 Gross income and revocation of disposition

Park AA

00. Head of tax office

Seoul Administrative Court Decision 2014Guhap52688 decided June 13, 2014

February 26, 2015

March 26, 2015

1.The judgment of the first instance shall be modified as follows:

A. On August 20, 2012, the Defendant revoked the imposition of an OOO tax on global income for the year 2006, imposed on the Plaintiff.

B. Revocation of the remainder of the Plaintiff’s claim

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

The judgment of the first instance court is amended as follows. The Defendant’s revocation of each global income tax disposition on each global income tax stated in the details of the attached disposition imposed by the Defendant against the Plaintiff (the Plaintiff filed a claim for revocation of each disposition of imposition (the amount shall be the same as the details of the attached disposition) from the first instance court to August 20, 2012 with respect to each global income tax of 207 to 2010, and the purport of the claim was changed in exchange for each disposition of imposition as of January 9, 2015 at the trial).

1. Quotation of judgment of the first instance;

The reasoning of the judgment of the court of first instance is partly dismissed as follows, and the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance, except for the addition of the judgment of the plaintiff in the appellate court to the following. Thus, it is accepted in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of

Parts used for cutting.

○ At the fourth bottom of the "Disposition" (hereinafter referred to as "Disposition of this case") is "(the amount including additional tax, and the specific details are the same as the "sub-paragraph" and "amount notified" in the attached disposition.

○ The following shall be added to the first page of the fifth page:

F. During the instant appellate trial, the Defendant revoked ex officio the respective penalty tax for the year 2007 through 2010 from the date of the instant appellate trial, and on January 9, 2015, the Defendant again imposed each penalty tax for the year 2007 through 2010, as stated in the details of the attached imposition, by clarifying the type of penalty tax and the grounds for the calculation thereof (hereinafter “instant disposition”).

The phrase “(based on recognition) Nos. 2 to 3” is added to the column “A”. “No. 18, No. 3, and No. 4.”

○ 8. 1. The following is added to “(the foregoing shall also apply even if each description of evidence A, which was additionally submitted by the appellate court, is added thereto).”

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

1) The instant disposition is unlawful as it is based on the audit conducted by the Board of Audit and Inspection in violation of the principle of prohibition of duplicate investigation under the Framework Act on National Taxes

2) Of the instant disposition, the imposition of penalty tax in the instant disposition was unlawful since the type of penalty tax in the tax payment notice and the grounds for calculation of penalty tax were not disclosed.

Meanwhile, at the time of the previous disposition, the Defendant excluded the instant balance from the taxable object, and thereafter, the Plaintiff used the instant balance to BB account upon the Defendant’s recommendation, so it was entirely impossible to expect that the global income tax should be imposed on the instant balance until the date of the previous disposition. Nevertheless, the Defendant imposed the global income tax on the instant balance, which was excluded from the original taxable object by the Board of Audit and Inspection, based on the comprehensive income tax imposed on the instant balance, which was excluded from the original taxable object. Therefore, there is a justifiable reason for not imposing the additional tax on the Plaintiff. Accordingly, the imposition of additional

B. Determination

1) As to the first argument

Article 81-4 (2) of the Framework Act on National Taxes provides that "tax officials shall not conduct a reinvestigation on the same items of taxation and the same taxable period (the principle of prohibition of duplicate investigation), and only the statement of evidence No. 17 (written vindication related to the audit of the Private Tax Audit and Inspection Board) is insufficient to recognize that an auditor conducted by the Board of Audit and Inspection from January 26, 2012 to February 22, 2012 constitutes a duplicate investigation (tax investigation) against the plaintiff ( there is no evidence to acknowledge that the plaintiff submitted evidence No. 17 to the Board of Audit and Inspection according to the exercise of the right of inquiry and inspection by the Board of Audit and Inspection, and according to the above evidence and facts, the above audit is distinguishable from the tax investigation conducted by the Seoul Regional Tax Office with respect to the taxpayer or related person, which is a tax official's exercise of the right of inquiry and inspection by the Board of Audit and Inspection, and there is no other evidence to acknowledge that there is a duplicate investigation against the plaintiff.

2) As to the second argument

A) In the event that a disposition imposing penalty tax contains only the sum of additional taxes without disclosing the type thereof and the basis for calculation of the amount of penalty tax (see, e.g., Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012), the said disposition cannot be exempt from the illegality.

In full view of the purport of each statement in the evidence Nos. 1 and 18, the Defendant, on August 20, 2012, notified the Plaintiff of the imposition of global income tax for the year 2006 of the instant disposition without disclosing the type of the additional tax and the grounds for calculation of the amount of tax. However, it can be recognized that the Plaintiff notified the type of the additional tax and the grounds for calculation of the amount of the additional tax when imposing the additional tax, etc. other than this, it can be recognized that the Plaintiff clearly stated the type of the additional tax and the notice of the assessment of the additional tax for the global income tax for the year 2006 among the instant disposition (i.e., the details of the disposition imposing additional tax for additional tax for additional tax for additional tax years + the additional tax for additional tax for additional tax years 206). The imposition of additional tax for additional tax for additional tax for the year 206 should be revoked illegally

B) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the individual tax law in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, and it is unreasonable for the taxpayer to be aware of such obligations, and where there are circumstances that make it unreasonable for the taxpayer to be reasonably present or to expect the performance of his/her obligations to the party concerned, or where there are justifiable grounds that make it unreasonable for the taxpayer to be unaware of such obligations, it may not be imposed (see Supreme Court Decision 2011DuU842, Feb. 27, 2014). However, the taxpayer’s intention and negligence is not considered, but does not constitute justifiable grounds that cannot be caused by the taxpayer’s breach of duty (see Supreme Court Decision 2012Du7370, Mar. 13, 2014).

In this case, there is no evidence that the Plaintiff did not report and pay the global income tax rate on the balance of this case (the Plaintiff’s assertion that the remainder of this case was the business fund of the BB, and the Plaintiff did not perform its duty to report and pay global income tax, even if it did not constitute a justifiable ground because it was due to an error in fact-related relations. The remainder of this case’s tax investigation conducted after the Defendant’s return and payment deadline of global income tax for the pertinent year subject to the disposition of this case was excluded from the subject of global income tax, and the Plaintiff transferred part of the remainder of this case’s balance to BB account upon the Defendant’s recommendation. However, even if the disposition of this case was made according to the audit results by the Board of Audit and Inspection, it cannot be recognized that there was a justifiable ground for the Plaintiff’s failure to perform its duty to report and pay due to such circumstance). This part of the Plaintiff’s assertion is without merit.

Conclusion

Therefore, the plaintiff's claim shall be accepted only for the part concerning the additional tax on global income for the year 2006 among the disposition of this case, and the remaining claims shall be dismissed as it is without merit. Since the judgment of the court of first instance is partially unfair, the plaintiff's appeal is partially accepted and the judgment of the court of first instance is modified as above, and the total costs of the lawsuit shall be borne by the plaintiff pursuant to Article 8 (2) of the Administrative Litigation Act and Article 101 of the Civil Procedure Act.