Whether it is legitimate for a revised return to simply estimate the reported portion of simple book because necessary expenses incurred in relation to the omission of income, etc. are not known.

If there are necessary expenses corresponding to the omission of income amount, this shall be asserted and proved by the taxpayer, and because the existence and scope of the necessary expenses cannot be determined, the income cannot be determined by the method of estimated investigation.

Article 80 (Rectification and Determination of Income Tax Act)

1. All of the plaintiff's claims are dismissed.

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

The Defendant’s imposition of global income tax of KRW 25.57.060 as of February 10, 2005 and global income tax of KRW 31.818,450 as of February 10, 200 and that of KRW 31.818,450 as of February 200.

1. Details of the disposition;

A. The Plaintiff, a business operator operating a clothing wholesale and retail business from ○○ City ○○-si 292-10 to ○○○○○○○○○○○○○○ agency, who continued to calculate and report the amount of income in accordance with the account books for the first business year from 1996 to 2005, which is the first business year. However, from 2003 to 2002, the Plaintiff reported the amount of income in accordance with the simple account books under Article 160(2) of the Income Tax Act, but became a person liable for double entry from 2003.

B. The Plaintiff reported the total income amount to KRW 351,77,19, KRW 323,977,275, income amount to KRW 27,79,84 (=351,777, KRW 119, KRW 119-323,97,275) by means of simple book book at the time of the first return of the income tax for 2002, and omitted KRW 91,266,811, out of the total income amount for 202, KRW 17,000, KRW 17,000, KRW 207, KRW 43,043,930, KRW 30 (= KRW 351,777, KRW 119 + KRW 91,66,811) by means of simple book book book at the time of the first return of the total income amount to KRW 205, KRW 204, and KRW 304,04,04,00 for the amount of income amount of income for 203 years.

- Amount of income calculated under simple expense rate (89%) :

48,734,832 =43,043,930 Won (1-0.89))

- Comparison Income: 58,481,798 won (=48,734,832 won 120% of the multiple determined by the Commissioner of the National Tax Service)

C. The Plaintiff reported the total income tax for the year 2003 as an external adjustment, and reported the basic inventory amount for the year 2003 as the last inventory amount for the year 2002 as the last inventory amount for the year 2002 as the last inventory amount for the year 2002 as the last inventory amount for the year 182,513,953.

D. On February 2, 2005, the Defendant added 91,266,811 won, which was originally omitted from the total amount of income, to the Plaintiff’s global income tax return for the year 2002. However, the Defendant calculated the income amount for the year 2002 by 11,182,915 won (=4304,32397275 won) by recognizing only the amount of income for the year 2002 as in the previous account book (0), and notified the correction of KRW 25,57,060 for global income tax for the year 202.

F. On April 21, 2005, the plaintiff appealed to the National Tax Tribunal, but the National Tax Tribunal dismissed the plaintiff's request on July 31, 2006.

[Ground of recognition] Facts without dispute, Gap evidence 1-1 to Gap evidence 2, Gap evidence 5, 8, 9, Eul evidence 1-1 to Eul evidence 8, the purport of the whole pleadings

2. Whether a disposition imposing global income tax on the global income for 202 is legitimate;

A. The plaintiff's assertion

It is impossible to receive the tax invoice because the plaintiff purchased the tax invoice on the ○○○ market's clothes, which is omitted at the first time. This is reasonable to estimate the amount of income by applying Article 143 (1) 1 of the Enforcement Decree of the Income Tax Act because the important part of the account books or evidence is insufficient or false.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) In principle, the tax base and tax amount of global income tax shall be determined by the actual amount revealed by the method of the on-site investigation. In order to determine them through the method of the on-site investigation, it shall be exceptionally permitted only when there is no taxpayer’s account book or documentary evidence, etc. or when there is no other method to disclose the actual amount of income, and thus, even if the tax authorities have included some false account books or documentary evidence kept and kept by the taxpayer, if the tax base can be calculated based on the clear fact that the remaining part of the account books or documentary evidence is excluding the above part, it shall not be based on the method of the on-site investigation (see, e.g., Supreme Court Decision 95Nu6809, Jan. 26, 196). Meanwhile, even if the tax authorities determined the tax base and tax amount of income of the taxpayer by the method of the on-site investigation, the tax base and tax amount shall not be determined by the method of the on-site investigation (see, e.g., Supreme Court Decision 2010Du314).

(2) In light of such legal principles, the legitimacy of the Plaintiff’s assertion is examined, and there is no objective data, such as a tax invoice to support the existence of the necessary expenses corresponding to the omission of the above revenue amount, and the existence and scope of the necessary expenses corresponding to the omission of the above revenue amount cannot be determined only by the entries in the evidence Nos. 3 through 7, and the income cannot be determined by the estimation investigation method in order to deduct the necessary expenses. Accordingly, the Plaintiff’s assertion is rejected as it is without merit.

3. Whether a disposition imposing global income tax on the global income for 2003 is legitimate;

A. The plaintiff's assertion

Inasmuch as the amount of the last inventory as originally reported by the Plaintiff was under-reported in 2002, it was just to calculate the amount of income attributed to the year 2003 based on the basic inventory value stated therein, since the necessary expenses were merely to avoid the loss in excess of the amount of income for the year 2002 by omitting part of the amount of income attributed to the year 2002, and the necessary expenses were calculated as losses in relation to the income attributed to the year 2002.

B. Determination

(1) The Plaintiff’s above assertion based on the Plaintiff’s written statement No. 5 (written confirmation of product receipt prepared by ○○○○○) is difficult to accept for the following reasons.

① Since the basic inventory amount is based on the balance of the above accounts, i.e., the last inventory amount, and reflects the results of accounting policies applied to the above transactions and the above transactions, the amount of the last inventory amount must be accurately carried over or revised where necessary, accurately. However, the reason is that it is very exceptional and easy, in light of the above accounting principles recognized in general, that the basic inventory amount of the year 2003 is more than the last inventory amount of the year 2002, which was reported on its own account books, by calculating the amount of income in accordance with the books continuously from the last business year 1996 to the date belonging to 2005, the first business year 196 to the date belonging to 2005.

(2) The gross profit and loss from sales shall be indicated by deducting the sales cost from the sales cost (see Article 36 of the corporate accounting standards), and the sales cost in sales business shall be stated in the form of deducting the last inventory amount which was not sold in the current term from the aggregate of the basic inventory amount carried forward from the former and the last inventory amount which was carried forward from the former (see Article 39(1) of the corporate accounting standards) (see Article 39(1) of the corporate accounting standards). If, as alleged by the Plaintiff, the last inventory amount in 2002 is short of the last inventory amount as in the Plaintiff’s assertion, the sales cost, which would be included in the expenses for the sales for the pertinent business year, as seen earlier, is calculated by means of [Article 36 of the corporate accounting standards + the last inventory amount) - The sales cost in 2002 would be increased by the last inventory amount which was appropriated for the taxation, and income for the year 202 shall be reduced by the Plaintiff’s assertion that the last inventory amount in 200 years should be reduced again.

(2) If the Plaintiff reported the basic inventory amount for the year 2003 as the correct account book, the Plaintiff’s domestic income tax on the total amount of KRW 182,52,984 (number 1,55), total amount of KRW 11,19,584 (number 5,419), and total amount of KRW 182,522,953 (number 5,419), and the basic inventory amount for the year 2003, based on the record of the certificate of non-verification of goods, were the same as the correct account book, the Plaintiff’s additional inventory amount for the year 202,362,543 (number 1,217), 118,960,826 (number 1,555), and the Plaintiff’s additional inventory amount for the year 203,000,0000,0000,0000 total income income tax for the year 20,000.

4. Conclusion

Therefore, all of the plaintiff's claims seeking prosecution of each of the dispositions of this case cannot be accepted as it is without merit, and all of them are dismissed. It is so decided as per Disposition.

Relevant statutes

○ Income Tax Act and the previous amendment by Act No. 7528 of 31, 2005

Article 80 (Settlement and Correction)

(2) If a person who has made a final return on tax base pursuant to Articles 70 through 72 or 74, falls under any of the following subparagraphs, the superintendent of the district tax office or the director of the regional tax office having jurisdiction over the place of

The Minister of Finance and Economy shall make a report on the completion of his duties.

1. Where an omission or error exists in the contents of return;

(3) The chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall, where he determines the tax base and tax amount of the current year under paragraphs (1) and (2), on the basis of books and other documentary evidence: Provided, That if it is impossible to calculate the income amount by books or other documentary evidence for the reason as prescribed by the Presidential Decree, he may make a estimated investigation and

○ Enforcement Decree of Income Tax

Article 142 (Determination and Revision of Assessment Standard and Tax Amount)

(1) In principle, determination of tax base and amount of tax under Article 80 of the Act shall be based on the final return on tax base and the accompanying documents or on-site inspections.

Article 143 (Determination and Revision through Estimation)

(1) The term "reasons prescribed by Presidential Decree" in the proviso to Article 80 (3) of the Act means the cases falling under any of the following subparagraphs:

1. When necessary account books and documentary evidence are nonexistent or important parts are incomplete or false in calculating the tax base;