[1] Detailed criteria for determining the right to income subject to taxation and the occurrence of income

[2] Where a claim which causes income has occurred but becomes impossible to recover, whether income tax is imposed (negative) and the method of determining whether the claim is impossible to recover

[1] The principle of confirmation of right refers to a method of calculating income in the year when a right that is the cause of income exists between the time when the right that is the cause of income and the time when the income is realized, deeming that there is income when the right that is not the time when the income is realized is the time when the income is not the time when the income is realized, and that it is significant to allow the taxpayer to levy prior taxation on the income substantially uncertain in the future on the premise that it is realized in the future, and to prevent the taxpayer's income from harming the taxable year's income. In order to make such income subject to taxation realized, even if it is not necessary until the income is realized in reality, the right that is the cause of income should be considerably mature and confirmed in light of the possibility of realizing it, and therefore, the income is generated only when the right is established without this degree. In this context, the issue of whether the right to receive income is mature and finalized can not be uniformly determined by comprehensively considering the nature and contents of each right and various legal and factual facts

[2] Even when a claim that is the cause of income has occurred, if it is objectively apparent that a claim subject to income subject to income has become impossible to recover due to the debtor's bankruptcy, etc. and that there is no possibility of realizing the income in the future, income tax on such economic gains shall lose its premise, and such income cannot be imposed on taxable income. However, the issue of whether a claim is impossible to recover shall be determined by an objective method of assessment based on social norms by taking into account the debtor's financial condition, payment ability, etc., based on the specific details and subsequent circumstances.

[1] Articles 24, 25(1), and 39 of the former Income Tax Act (amended by Act No. 5552 of September 16, 1998), Article 47 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of December 31, 1998) / [2] Articles 24, 25(1), and 39 of the former Income Tax Act (amended by Act No. 5552 of September 16, 1998), Article 47 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of December 31, 1998)

[1] Supreme Court Decision 85Nu26 delivered on June 11, 198 (Gong1985, 1017) 87Nu166 delivered on June 23, 1987 (Gong1987, 1258), Supreme Court Decision 87Nu828 delivered on November 24, 198 (Gong198, 1989) 86Nu118 delivered on September 20, 198 (Gong198, 1940, 1397Du2979, 196Nu2979, 1979, 1992) 20Nu40408 delivered on July 14, 1994 (Gong1992, 2456)

Plaintiff (Attorney Kim Ba-young, Counsel for the plaintiff-appellant)

Head of Suwon Tax Office

Busan High Court Decision 2000Nu4088 delivered on July 20, 2001

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

The principle of confirmation of right refers to the method of calculating income when a right that is the cause of income exists between the time when the right that is the cause of income and the time when the income is realized, deeming that there is income when the right that is not the time when the income is realized is the time when the income is realized, and that it is meaningful to allow the taxpayer to impose income in advance on the uncertain income in the current year under the premise that it is realized in the future. Even if it is not necessary to realize the income in reality, the right that is the cause of income should be considerably mature and confirmed in light of the possibility of realizing it. Thus, it cannot be said that there is income generated only when the right is established without this degree. The issue of whether the right to receive income is mature or finalized can not be determined uniformly, and it should be determined objectively by taking into account the debtor's specific nature and substance of the right and various circumstances that are legally and factually accrued (see Supreme Court Decision 20Nu72898, Mar. 13, 1984; 200Nu18784, Apr. 28, 1987.

According to the reasoning of the judgment below, after compiling the adopted evidence, the court below found the facts as stated in its reasoning. It is reasonable to view that the Plaintiff’s income subject to the disposition of this case was considerably mature and confirmed as long as it agreed to receive the rent of KRW 100 million from the Nonparty, who is the lessee, as the rental deposit, to be paid the rent of KRW 8 million per month from December 1993 to the last day of each month, and that the rent income corresponding to the rent belongs to the Plaintiff on the payment date of the monthly rent contract. Since the Plaintiff was not paid the first monthly rent of KRW 6 million from the Nonparty, or the Plaintiff was not paid the rent during that period, in order to secure the return of KRW 100 million from the above rent of this case, it is clear that the Plaintiff’s right to the rent of this case, which was the mortgagee of this case, was not deducted from the rent of KRW 100,000,000,000 from the rent of this case to the expiration of KRW 13,2905.

In light of the above legal principles, relevant statutes, and records, the above recognition and determination by the court below are just, and there are no errors in the misapprehension of legal principles as to the confirmation of rights under the Income Tax Act, the principle of substantial taxation, and the burden of proof.

The Supreme Court precedents cited in the ground of appeal by the plaintiff are different from the case so it is inappropriate to invoke the case in this case.

2. Regarding ground of appeal No. 2

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning based on the evidence of employment, and determined that the tax base calculated by applying the standard rate of income for each type of business does not separately deduct necessary expenses, such as taxes and public charges, as alleged by the plaintiff, from the total amount of income, in light of the following: " insofar as the plaintiff proves that necessary expenses equivalent to 54,325,434 won, such as interest paid to financial institutions, have been incurred in the course of the lawsuit, are deducted from the rent income, and the reasonable tax amount should be calculated by deducting necessary expenses from the rent income."

In light of relevant laws and records, the above recognition and judgment of the court below is just, and there is no error of law such as misunderstanding of legal principles as to the supplement of estimated taxation.

3. Regarding ground of appeal No. 3

The plaintiff asserts that the plaintiff should deduct the amount equivalent to construction expenses from rental deposit under Article 53 (2) of the Enforcement Decree of the Income Tax Act in the calculation of deemed rent, since the defendant's estimation decision did not meet the requirements, the plaintiff asserted that the amount should be deducted from the amount equivalent to the construction expenses from the rental deposit under Article 53 (2) of the Enforcement Decree of the Income Tax Act in the calculation of the deemed rent. However, according to the records, the plaintiff asserted that the plaintiff should be excluded from the amount of the deposit in calculating the total amount of rent, and that the plaintiff should return the amount of KRW 100 million from the legal brief dated 12, 2000 to the commercial rental company, and that in calculating the amount of the deposit, the amount equivalent to the construction expenses of the real estate used for rent should be deducted from the rental deposit, as otherwise alleged in the ground of appeal, it is not a legitimate ground of appeal (see Supreme Court Decision 2001Da63575, Jan. 25, 2002).

Therefore, the above grounds for appeal cannot be accepted as any reason for appeal.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Shin-chul (Presiding Justice)