[1] In a case where a corporation did not enter the transfer price of assets in the account book, whether the amount of the transfer price not entered shall be deemed to have been leaked out of the company (affirmative in principle) and the burden of proving special circumstances shall not be deemed to have been leaked out of the company

[2] The person who bears the burden of proving that the corporation's income, which is not entered in the account book but has to be disposed of as a bonus for the representative, is clear as to its ownership (=taxpayer)

[1] Article 67 of the Corporate Tax Act; Article 106 (1) 1 of the Enforcement Decree of the Corporate Tax Act / [2] Article 67 of the Corporate Tax Act; Article 106 (1) 1 of the Enforcement Decree of the Corporate Tax Act

[1] Supreme Court Decision 2005Du2049 Decided December 21, 2006 / [2] Supreme Court Decision 92Nu6747 decided August 14, 1992 (Gong192, 2694)

Plaintiff

Head of the Tax Office

Daegu High Court Decision 2011Nu1826 decided December 7, 2012

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

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, the court below found the following facts: (1) around May 2005, the non-party 1, 2, 3, and 4 (hereinafter referred to as the "non-party 1, 300,000,000 won were to be sold to the non-party 1, 4,000 won; and (3) the non-party 2,70,000,000 won was to be paid to the non-party 2,70,000,000 won was to be paid to the non-party 70,000 won; (4) the non-party 2,000,000 won was to be paid to the non-party 2,70,000 won among the sales amount of the real estate of this case; and (3) the non-party 2,500,000 won was to be paid to the non-party 2,700,000 won among the sales amount of the real estate of this case.

Based on such factual basis, the lower court determined that the Plaintiff’s portion of KRW 1.1 billion out of the total amount of KRW 1.3 billion out of the actual sales price of the instant real estate and the sales price stated in the account book was unlawful on the ground that: (a) KRW 460 million out of KRW 1.1 billion, excluding KRW 200 million, which was reverted to Nonparty 3, was held as an outstanding claim; and (b) was held as an unclaimed asset by the method of title trust; and (c) the amount reverted to the Plaintiff in 2006 out of KRW 6.4 million, which was held as an unclaimed fund, was merely KRW 92 million; and (d) the portion imposed on the Plaintiff out of the total amount of KRW 1.1 billion out of the total amount of KRW 1.1 billion out of the above KRW 2005,000,000, which was reverted to the Plaintiff out of KRW 28.6 billion in the year 2006, which was reverted to the Plaintiff.

2. However, it is difficult to accept such a determination by the lower court for the following reasons.

A. First, we examine whether the Port Fishery owned the outstanding claim amounting to KRW 460,000,000 as the floating asset in 2005.

(1) Where a corporation fails to enter the transfer price in the account book even after transferring its assets, barring any special circumstance, the amount equivalent to the transfer price not entered in the account book shall be deemed to have been leaked out of the company, and the taxpayer who asserts it shall prove it (see Supreme Court Decision 2005Du2049, Dec. 21, 2006, etc.).

(2) According to evidence duly adopted by the court below: ① from 2005 to February 16, 2009, 2008, 300 won was the general partner 8,9,6, and 4 members with unlimited liability; ② the general partner including the plaintiff sold the instant real estate at KRW 4 billion; ② the transfer value of the instant real estate was calculated at KRW 2.7 billion; and the general partner 4 members with unlimited liability were divided into 3.7 billion in the form of dividends, but the Plaintiff did not receive KRW 700 million in the form of 3.7 billion in the amount of interest on the instant real estate; ③ the purchaser of the instant real estate at the time of reporting the sale of the instant real estate at KRW 70 billion in the amount of 70 billion in the amount of interest on the instant real estate; ④ The Plaintiff did not receive KRW 400 million in the amount of interest on the instant real estate from KRW 700 million in the name of the general partner 200 million in the form of dividends.

(3) Of the sales price of the instant real estate, only KRW 2.7 billion was known to the existence of the outstanding claim amounting to KRW 460,000,000,000, which was not entered by only some of the members of the Posi Port Fisheries at the time of entry in the corporate book of the Posi Port. The reason why the Plaintiff did not enter this in the corporate book was unclear as to whether it is intended to use the outstanding claim amount for the Posi Port Fishery. In order to secure the outstanding claim amount, as to subparagraphs 202 and 302 of the 202 and 302 of the Posisi to whom the right to collateral security was established in the name of Nonparty 6, there was no reason for the Posisisisisisisi, and there was no need for the Posisisisisisisi to be the debtor as to the Posisisisisi fishery as to the 207 and 307 shares of the Posisisisi.

(4) Therefore, the court below should have further deliberated on the above circumstances and judged whether the Port Fishery owned the outstanding claim amounting to KRW 460,000,000 with the floating asset in 2005,000,000,000,000,000,000. However, on the grounds stated in its reasoning, the court below determined that the imposition disposition of global income tax on this part of the disposition in this case was unlawful on the ground that the Port Fishery owned the outstanding claim amount with the floating asset as the floating asset on July 19, 2007, for which the transfer registration of ownership was made on July 19, 2007 by the method of title trust. In so doing, the court below erred by misapprehending the legal principles as to the outflow of the assets not entered in the corporate account book, by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, and by failing to exhaust all necessary deliberation, thereby affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

B. Next, we examine the part as to the amount of KRW 640 million which was released from the company in 2005 or 2006 when the amount of Posa fishery held in the form of an extra capital.

(1) As long as the revenue of a corporation that was released from the company without being entered in the account book is not clear, it is inevitable to dispose of it as a bonus for the representative pursuant to Article 67 of the Corporate Tax Act and the proviso of Article 106(1)1 of the Enforcement Decree of the Corporate Tax Act, so long as the revenue of the corporation is not recorded in the account book, and in this case, the burden of proving that it is clear that it is reverted to it is the taxpayer (see Supreme Court Decision 92Nu6747 delivered on

(2) The evidence No. 6 (payment statement of dividends) that Non-party 6 of the first instance trial witness and Non-party 6 of the lower court’s trial witness written at the Plaintiff’s order in 2008 to 2009 stated that the Plaintiff was paid KRW 92 million among KRW 6.1 million and the remainder was paid to others. The witness Non-party 6 appears as the witness of the lower court and stated that the non-party 39 million was used as the trial money for Pohang Port fishery, etc., which are specific and direct evidence consistent with the Plaintiff’s argument.

(3) However, according to the following evidence, etc., it is difficult to adopt the content of Nonparty 6’s statement on this part as it is difficult to easily believe.

① At the time when the Plaintiff serves as a representative member, the evidence Nos. 15-1 through 6 (written payment of dividends for executive officers) of B prepared in the name of Pohang Fishery No. 15-1 to 6 (written payment of dividends for each executive officer) stated on June 20, 2006 that the total amount of KRW 70 million was paid to Nonparty 8 with the general partner, KRW 80 million to Nonparty 9 with the general partner, KRW 10 million to Nonparty 6 with the general partner, KRW 80 million with the general partner, KRW 80 million with the general partner, KRW 70 million with the total amount of KRW 40 million, KRW 90 million with the non-party 10,000 with the evidence No. 408 (bank remittance), and KRW 80,000,000 with the evidence No. 981 with the above written notification that the Plaintiff sent to the non-party 11.

② The Plaintiff, as the representative director of the Port Fishery, submitted the Plaintiff at the time of filing a corporate tax return for the business year 2006 Eul No. 7 (a statement of recognition of provisional payment, etc. and a statement of confirmation) and No. 18 (the president of each general account of port fishery) stated that Port Fishery recovered KRW 200 million from the possession of claims for provisional payment, while Port Fishery was in possession of claims for provisional payment, and the certificate No. 4 (a certificate No. 11) stated that the Plaintiff recovered the provisional payment amount of KRW 200 million from the sale price of the instant real estate in possession of claims for provisional payment and collection of claims for provisional payment.

③ From the first instance court to 2005, the Plaintiff voluntarily stated that the user was not aware of the KRW 40 million out of the KRW 500,000,000, which was disposed of as the outflow of the company in 2005, and it is recognized that the Plaintiff used KRW 40,00,000 in the evidence No. 5-1 (Notice) sent to Nonparty 11.

(4) Therefore, as long as there is room to view that an amount equivalent to 320 million won out of the above 640 million won out of the company (i.e., KRW 80 million + KRW 200 million + KRW 40 million) has accrued to the plaintiff or it is unclear whether it has accrued to the plaintiff (the amount equivalent to KRW 600 million out of KRW 600,000,000,000 which was held as non-indicted 10 was released from the company as dividends to four general partners including the plaintiff and non-party 10, and the non-party 100,000 won which was paid to the plaintiff after September 29, 2006, and finally, it seems that there was no intention that the dividends to the non-party 10,000 won were owned as non-party 10,000 won out of the company from other general partners including the plaintiff, or it seems that the non-party 11 has actually accrued the amount of the outflow from the company after such settlement.

Nevertheless, the court below concluded that only the amount of outflow from the company to the plaintiff was actually attributed to the plaintiff on the grounds stated in its reasoning. In so doing, the court below erred by misapprehending the legal principles on the attribution of the amount of outflow from the company, exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, and failing to exhaust all necessary deliberations, thereby affecting the conclusion of the judgment. The ground of appeal pointing this out has merit.

3. Therefore, without examining the remaining grounds of appeal, 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 on the bench.

Justices Kim Yong-deok (Presiding Justice)