If it is found in the process of determining the necessary expenses corresponding to the total income by the on-site investigation, the method of calculating the necessary expenses corresponding to the omitted income.

In cases where the tax authorities have determined the total necessary expenses corresponding to the total income amount of the year concerned by the on-site investigation of a taxpayer and found the omission of income, if there is no evidence to deem that the necessary expenses corresponding to the omission of income actually required, it shall be deemed that the total necessary expenses are included in the general manager or ascendant of the necessary expenses. In such cases, the necessary expenses corresponding to the total income amount of the year concerned, unlike the method, shall not be determined separately by the method of the estimation, not by the on-site investigation.

Article 31 of the Income Tax Act

[Defendant-Appellant] Plaintiff 1

The director of Busan District Office

Daegu High Court Decision 85Gu271 delivered on February 14, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below affirmed the judgment below that the plaintiff reported the general management expenses of KRW 111,862,39 and the necessary expenses corresponding thereto to the total income amount of KRW 105,246,012, but reported the revised amount of KRW 18,540,719 as the total income amount of KRW 17,44,09 and the necessary expenses corresponding thereto was about KRW 17,44,090. The defendant did not err in the omission of the revenue amount of KRW 17,44,090 as the necessary expenses corresponding to the omission of the revenue amount of KRW 17,44,09,00 as the total income amount was already included in the above general management expenses, and the court below rejected the omission of the revenue amount of KRW 17,444,09 as the necessary expenses corresponding to the omission of the revenue amount of KRW 15,00 and the evidence corresponding to the omission of the revenue amount of KRW 38,000,000.

In addition, when it is possible to determine the amount of income by recognizing the total amount of income and the necessary expenses corresponding thereto through the on-site investigation in calculating income tax, the tax base and tax amount shall be calculated on the basis thereof and it shall not be determined on the basis of the estimation. Therefore, in a case where there is no evidence to deem that the necessary expenses corresponding to the above revenue omission amount actually took place in the course of making a decision on the actual investigation by the plaintiff's total necessary expenses corresponding to the total amount of income in the corresponding year, the tax disposition of this case, which the court below recognized as being included in the above general management ascendant and descendant as necessary expenses, is just and the method different from the calculation of the total necessary expenses corresponding to the total amount of income in the corresponding year, cannot be determined separately by the estimation method such as the theory of lawsuit, and there is no error in the misapprehension of legal principles as to the determination of

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.

Justices Choi Jae-ho (Presiding Justice)