Whether to deduct separate expenses corresponding to omitted income and to assert and prove the burden of proof on such income (=taxpayer)

When a tax assessment is made on the omitted income by the on-site investigation decision, unless there is any evidence that there was a separate expense corresponding to the omitted income, the total amount of the income shall be added to the income amount, and the expenses corresponding to the omitted income have been reported and omitted, a taxpayer who seeks a separate deduction shall assert and prove it.

Article 32 of the Corporate Tax Act, Article 26 of the Administrative Litigation Act

Supreme Court Decision 90Nu2222 delivered on September 28, 1990 (Gong1990, 2210) 89Nu38 delivered on November 13, 1990 (Gong1991, 114) 90Nu42 delivered on December 11, 1990 (Gong191,507)

Joint tourism in limited partnerships

Daejeon Head of the tax office

Seoul High Court Decision 88Gu12013 delivered on May 9, 1991

The part of the judgment below against the defendant is reversed and that part of the case is remanded to the Seoul High Court.

The plaintiff's appeal is dismissed.

The litigation costs incurred by the plaintiff's appeal shall be borne by the plaintiff.

1. We examine the Plaintiff’s grounds of appeal.

The court below held that the plaintiff's lawsuit seeking the cancellation of the above disposition was unlawful as it did not go through a legitimate pre-trial procedure, since the plaintiff had immediately gone through the procedure of filing an objection or a request for examination with respect to Class A earned income tax and its defense detailed and disposition. In light of the records, the judgment of the court below is justified, and there is no ground for appeal Nos. 1 and 2 of the same premise of the judgment below, which contain errors in the misapprehension of legal principles as to the pre-trial procedure

In addition, this theory argues the illegality of the disposition imposing the value-added tax of this case on the ground that there is a defect in the defendant's tax base decision and notice, but it asserts that the new illegal ground that is not alleged in the fact-finding court is asserted only when it reaches the final appeal, and therefore, the plaintiff's ground of appeal

2. We examine the defendant's grounds of appeal.

The lower court determined that the Defendant’s disposition of imposing corporate tax and defense tax, etc., based on which the amount of gross income omitted is the tax base of the Plaintiff’s corporate tax and the amount of income omitted, although the Defendant added the amount of income omitted by the Plaintiff’s confidential account books, etc. to the tax base of the corporate tax of this case and the amount of income derived from the said omitted income, and thus, the amount of income so deducted should be the tax base.

However, in cases where a tax assessment is made on the omitted income by the on-site investigation decision, unless there is any evidence to support that there was a separate expense corresponding to the omitted income, the whole amount of the income should be added to the income amount, and the cost corresponding to the omitted income has also been reported or omitted, a taxpayer who seeks a separate deduction shall prove that there was a separate expense corresponding to the omitted income (Supreme Court Decision 90Nu10179 Decided July 12, 1991; Supreme Court Decision 90Nu42 Decided December 11, 1990; Supreme Court Decision 89Nu222 Decided September 28, 1990; Supreme Court Decision 88Nu1179 Decided July 11, 1989; Supreme Court Decision 86Nu2179 Decided 125, Nov. 125, 1986; Supreme Court Decision 201Nu38138, Oct. 13, 1987; Supreme Court Decision 2010Nu138384, Nov. 13, 1987

The judgment of the court below, without recognizing such special circumstances, on the premise that there is no evidence of expenditure for expenses corresponding to omitted income, should be deducted from expenses without necessarily. It is clear that the court below erred by misapprehending the legal principles on expense deduction, etc. under the Corporate Tax Act, which affected the conclusion of facts as to whether the separate expense of this case has been disbursed, which affected the part of the judgment below against the defendant. Therefore, the argument that points out this issue

Therefore, since the defendant's appeal is well-grounded, the part of the judgment of the court below against the defendant is reversed, and the case is remanded to the court below for further proceedings consistent with this Opinion. The plaintiff's appeal is without merit, and the costs of appeal resulting therefrom are assessed against the plaintiff who has lost. It is so decided as per Disposition by the assent

Justices Kim Sang-won (Presiding Justice)