[1] The purport of Article 41 (3) of the former Enforcement Decree of the Income Tax Act, which provides for the "liability for penalty and compensation" under Article 21 (1) 10 of the Income Tax Act as "compensation for damages caused by breach or termination of a contract on property right"

[2] The case holding that since insurance proceeds paid on the ground that the physical injury suffered directly due to a traffic disaster is not subject to income tax, and thus, compensation for delay is not subject to income tax, it shall not be subject to taxation

[1] The purport of Article 41 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007) provides that "compensation for damages paid due to a breach or cancellation of a contract on the right to property" under Article 21 (1) 10 of the Income Tax Act is "compensation for damages paid due to a breach or termination of a contract on the right to property" is that where monetary claim itself is not subject to income tax, such as compensation for damages or consolation money for infringement of non-property interest, such as personal interests such as life and body, family rights, etc., it shall not be subject to taxation.

[2] The case holding that since insurance money paid on the ground that the physical injury suffered directly due to a traffic disaster is not subject to income tax, and thus, the compensation for delay is also not subject to income tax

[1] Article 21 (1) 10 of the Income Tax Act, Article 41 (3) (see current Article 41 (7)) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007) / [2] Article 21 (1) 10 of the Income Tax Act, Article 41 (3) (see current Article 41 (7)) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007)

[1] Supreme Court Decision 2004Du3984 decided Jan. 12, 2006 (Gong2006Sang, 254)

Korea Life Insurance Corporation

Korea

Defendant

Daejeon High Court Decision 2005Na12627 decided April 28, 2006

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff’s Intervenor.

The grounds of appeal are examined.

Article 21(1)10 of the Income Tax Act is one of the other incomes, and Article 21(1)10 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890, Feb. 28, 2007; hereinafter the same) provides that “the penalty or compensation” means the compensation received due to a breach or termination of a contract on property rights, and refers to the value of the money or other goods to compensate for the damages exceeding the damages per se to the payment itself which forms the original contents of the contract regardless of its title.” The purport of Article 41(3)10 of the former Enforcement Decree of the Income Tax Act provides that “the penalty or compensation received due to a breach or termination of a contract on property rights” is “the compensation received due to a breach or termination of a contract on property rights” and Article 41(3) of the former Enforcement Decree of the Income Tax Act provides that “if it is reasonable to determine that the compensation for damages are not subject to assessment of consolation money per se 201,204.

In the same purport, the court below is just in holding that the insurance proceeds of this case were paid for physical injuries due to a traffic disaster, and thus, it cannot be deemed as subject to income tax, and thus, the compensation for delay also is not subject to income tax, and there is no error in the misapprehension of legal principles as to other income as otherwise alleged in the ground of appeal.

In addition, Article 41 (3) of the former Enforcement Decree of the Income Tax Act cannot be deemed to be contrary to the contents and purport of Article 21 (1) 10 of the Income Tax Act, a parent corporation.

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 Kim Nung-hwan (Presiding Justice)