Where the tax base and tax amount are determined by the on-site investigation method, if the income omitted from the original return is found, the method of determining deductible expenses corresponding to the omitted income portion.

If the tax base and tax amount of the corporation's income can be determined by the on-site investigation method, it shall not be based on the estimation method, and even if the tax authority found the revenue omitted from the initial return of the corporation in the case of determining the tax base and tax amount of the corporation's income by the on-site investigation method, it shall be deemed that the corresponding revenue was included in the total loss corresponding to the total revenue, unless there are special circumstances such as the account book or other documentary evidence revealed that the corresponding revenue was separately disbursed, and thus, it shall not be determined separately by the method of partner right or the estimation method based on the income standard ratio, unlike the method of determining the total loss amount.

Article 32 of the Corporate Tax Act

Supreme Court Decision 83Nu271 Decided December 13, 1983, Supreme Court Decision 86Nu217 Decided November 25, 1986

[Defendant-Appellant] Defendant 1 and 3 others (Attorney Park Jae-sik et al.)

Head of Dong Daegu Tax Office

Daegu High Court Decision 84Gu173 delivered on November 29, 1985

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. On the first and fourth grounds:

Upon examination of relevant evidence, the court below acknowledged that the plaintiff's omission in the report of corporate tax for the above business year among the total transport income of 118,903,265 won among the total transport income of 1,454,812,500 won in the business year of 1981 and the total transport income of 118,903,265 won in the business year of 1982 and the total transport income of 1,626,179,524 won in the report of corporate tax for the above business year of 1,626,524 out of the above business year of 1,626,524, which was included in the report of the above business year from March 3, 1981, or the defendant's assertion that the plaintiff omitted in the total oil amount for the above business year of 1,454,812,500 was already included in the confidential account book, and rejected all of the witness's testimony and evidence in the process of finding.

2. On the second and third grounds:

According to Article 9(1) of the Corporate Tax Act, income for each business year of a domestic corporation shall be the total amount of income which belongs or comes to belong to the business year minus the total amount of losses which belongs or comes to belong to the business year. According to Articles 32(1), 32(2) and (3) of the same Act, if a domestic corporation fails to file a tax base return or deems that there is an error or omission in the details of its return, the Government shall determine the tax base and amount of corporate tax on income for each business year. In such a case, if the amount of income can be calculated by the books and documentary evidence kept in the book and documentary evidence, it shall be deemed that the Government has determined the tax base and amount of corporate tax on income for the relevant business year by the books and documentary evidence on the spot investigation. Thus, even if the tax office has determined the tax base and amount of income of the relevant corporation by the method of the spot investigation, it shall not be deemed that it constitutes a total of 18-year income omission or omission in the calculation of losses, and it shall not be deemed that it constitutes a total of 18.

3. 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)