In the case of loss of books and documentary evidence, the tax authorities' measures can not make on-site investigations decisions, etc.

Article 120 of the former Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992) and Article 169 (1) 1 and 169 (2) 2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13802 of Dec. 31, 1992) cannot make on-site investigations, etc. due to obvious reasons, such as the absence of books and evidential documents necessary for calculating the tax base with respect to the reasons and methods of the estimation, the tax base and tax amount shall be investigated and determined by the standard rate of income by type of business and the method of income by type of business if the account books and other evidential documents are destroyed due to natural disasters or other force majeure. Thus, even if the account books and evidential documents are destroyed, if the account books and evidential documents cannot be determined on-site investigations, they constitute "where there is no account books and evidential documents, which are the estimation reasons," and the method of estimation can only be different depending on whether the cause destroyed by

Article 120 of the former Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992); Article 169(1)1 and (2)2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13802 of Dec. 31, 1992)

Supreme Court Decision 85Nu978 delivered on February 24, 1987 (Gong1987, 555) Supreme Court Decision 95Nu2708 delivered on July 25, 1995 (Gong195Ha, 3010)

Plaintiff

Head of Nowon Tax Office

Seoul High Court Decision 94Gu5023 delivered on January 17, 1995

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below held that since the plaintiff was in custody of books and documentary evidence in a common warehouse, but the non-party, at his own discretion, destroyed or lost them in a garbage bag with other articles that the plaintiff knew, it cannot be deemed that the plaintiff's error was committed in the destruction of books, etc., and even if the plaintiff filed the final return on the tax base, the account books and documentary evidence were destroyed without any reason attributable to the plaintiff while the defendant did not take any measures within a reasonable period from the date of the report, such case does not constitute "when the account books and documentary evidence, which are the reasons for estimated investigation, exist"

However, Article 120 of the Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992), Article 169(1)1, and Article 169(2)2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13802 of Dec. 31, 1992) cannot make on-site investigation decisions, etc. on the grounds of the estimation investigation and the method of calculating the tax base without any books and documentary evidence, etc. In cases where the books and documentary evidence are destroyed due to natural disasters or other force majeure, the tax base shall be investigated and determined by the standard rate of income by type of business and the amount of tax shall be determined by the method of the partner authority. Thus, even if the books and documentary evidence are destroyed due to the same circumstance as the judgment of the court below, if the books and documentary evidence cannot be conducted on-site investigation, it constitutes "when there is no book and documentary evidence which is the basis of estimation", but only the method of estimation can be different depending on whether the cause destroyed or lost is a

Nevertheless, the court below erred by misapprehending the legal principles as to the decision of estimated investigation, thereby adversely affecting the conclusion of the judgment, on the ground that the court below did not constitute "where there is no books and documentary evidence." Thus, there is a reason to point this out.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)