National Tax Service Review Corporation 2010-0058 ( December 27, 2010)

It shall not be deemed that the transaction relation with the purchaser and the balance of credit balance with the purchaser continue to have been as much as the amount of omission in sales.

The difference between the balance of the Plaintiff’s credit account sales and the balance of the credit purchase price of the purchaser occurred as much as the amount omitted in the sales of this case. Even after having been disposed of as payment of the price for the goods omitted in the sales of this case to the Plaintiff’s account, the difference between the amount omitted in the sales of this case and the purchaser occurred between the Plaintiff and the purchaser, it cannot be deemed that it was leaked, and that it was reserved in the form of

2011Guhap84999 Revocation of Disposition of Notice of Change in Amount of Income

XX Co., Ltd.

○ Head of tax office

September 6, 2011

October 20, 2011

1. On August 18, 2010, the Defendant’s disposition of notification of change in income amount of KRW 47,532,100 shall be revoked by making the income earner with respect to the Plaintiff as ParkA.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a corporation established on October 1, 1995 and engaged in the manufacture and sales business, such as oral and handbags.

B. The defendant added 47,532,100 won (hereinafter "the omitted sales amount of this case") to gross income for the business year 2005 and 2 years 2005 when the plaintiff filed a revised return on the tax base and amount of value-added tax for the business year of 2005 and 47,532,100 won (including value-added tax) delivered on December 31, 2005 to Incheon store (hereinafter "G shopping"), and notified the plaintiff to correct and notify the omitted sales amount of KRW 16,951,290 for the business year 2005 (the plaintiff paid value-added tax for 2 years 2005 for the omitted sales amount of this case, and the above corporate tax was also paid for the plaintiff to 208,205, under the premise that the representative director leaked the sales amount of this case to the plaintiff at the time of 2005,200,000 won (the above corporate tax was leaked).

C. The Plaintiff, who was dissatisfied with the instant disposition, filed a request for examination with the Commissioner of the National Tax Service on October 14, 2010, but received a decision to dismiss the said request on December 27, 2010.

[Ground of recognition] Facts without dispute, Gap 1.2 evidence No. 1. The purport of the whole pleadings in Gap 1's evidence No. 1

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, at the time of the declaration of corporate tax for the business year 2005 and the amount of value-added tax for the second period of 2005, omitted the sales declaration in accordance with the instant tax invoice. However, in fact, the Plaintiff collected the amount equivalent to the amount omitted from the sales of the instant case from x shopping, which is the goods purchasing source. Even if it is difficult to deem the said amount collected, the amount omitted from sales of the instant case is reserved in the form of credit account receivable (non-paid credit) with respect to XX shopping.

Therefore, the disposition of this case, which was based on the premise that the omitted amount of sales was out of the company, is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The Plaintiff continued to supply oral and Hand bags, etc. to XX shopping. In ordinary, when the Plaintiff supplies goods to XX shopping, the Plaintiff would pay the price of goods with the purchase card (referred to the system that the supplier would receive the price of goods from the relevant card company, which is the payment bank, if the △△△△△ makes the purchase-only store at the bank and makes the price of goods with the purchase card which is not a bill). The price of goods settled with the above purchase card was made by the transaction with the bank account in the name of the Plaintiff from the relevant card company, the relevant card company, △△△△ bank (referred to as the payment of the price of goods to the △△△ bank on the card settlement day). The Plaintiff issued a tax invoice at the time of supply to the △△△ bank with the last day of each month.

2) The Plaintiff supplied goods equivalent to the omitted sales amount (47,532,100 won) in XX shopping and omitted sales declaration. However, even if the instant tax invoice was issued, the Plaintiff entered the amount omitted sales amount in the account book as credit purchase amount and deducted the amount of value-added tax from the sales amount as the input tax amount. On the other hand, the Plaintiff filed a value-added tax return by deducting the amount equivalent to the omitted sales amount from the sales amount as the input tax amount. As seen earlier, the Plaintiff paid the amount equivalent to the above amount from January 2006 to May 2006 to the Plaintiff by settling the price of the goods equivalent to the omitted sales amount into the bank account in the Plaintiff’s name.

3) Although the omitted sales amount of this case was omitted in the credit sales ledger for the Plaintiff’s XX shopping, it was normally entered in the credit sales ledger for the Plaintiff, the counterpart of the transaction, and from December 31, 2004 to December 2008, the balance of the Plaintiff’s credit sales account for the Plaintiff’s XX shopping and the balance of the credit sales amount for the Plaintiff of XX shopping are as follows.

[Ground of recognition] The facts without dispute, Gap 3, 5, and 6's evidence 1 to 4, Gap 4's evidence 1 to 5, Gap 7, and the court's fact-finding results of the fact-finding of XX shopping, the whole purport of the arguments, as a whole.

D. Determination

Where a juristic person fails to enter its sales in an account book despite the fact of sales, the total amount omitted from sales shall be deemed to have been leaked out of the account book. In such cases, special circumstances, which deem that the omission in sales was not leaked out of the account book, shall be proved by the juristic person who asserts such omission (see, e.g., Supreme Court Decisions 93Nu630, May 14, 1993; 2001Du2560, Dec. 6, 2002).

In the case of this case, since there is no dispute between the parties that the Plaintiff did not enter the omitted sales amount in the account, it is difficult to conclude that the amount deposited in the account in the Plaintiff’s name from January 2006 to May 2006 is the payment of the price of the goods equivalent to the omitted sales amount of this case, even if the sales amount was reserved in the company (see each fact inquiry result with respect to XX shopping), the Plaintiff continued to engage in transactions with the Plaintiff for several consecutive years as seen above. In light of the fact that the payment of the goods was made in the manner of deposit with the bank account in the Plaintiff’s name, and the payment of the goods was made in the way of deposit with the bank account in the Plaintiff’s name. Thus, it is difficult to conclude that the payment of the goods amount deposited in the Plaintiff’s account from January 2006 to May 2, 2006 is the payment of the goods amount equivalent to the omitted sales amount of this case.

However, the following circumstances revealed by the above facts, i.e., the Plaintiff failed to include the amount equivalent to the omitted amount of the sales in XX shopping on December 31, 2005, in the account book, and the Plaintiff’s account amount (17,505,733 won) as of December 31, 2005 and the balance of the credit purchase in XX shopping (65,037,719 won) incurred a difference between the Plaintiff’s account balance (17,532,100 won) and the omitted amount of the sales in this case. After handling the goods amounting to the omitted amount of the sales in this case as payment to the Plaintiff’s account from 2006 to 208, the sales in this case did not appear to have been omitted due to the omission of the sales in this case’s account. In light of the fact that the Plaintiff’s balance of the credit sales in this case as of December 31, 2006 and the balance of credit purchase in XX shopping, the sales in this case’s account amount was omitted.

Therefore, the disposition of this case, which was made on a different premise, is unlawful, and the plaintiff's above assertion is justified.

3. Conclusion

The plaintiff's claim is justified and accepted.