Cho High Court Decision 201Do4839 ( December 23, 2011)

It is reasonable to view that it is not possible to regard it as engaging in credit business, and it is reasonable to regard it as profits from non-business loans temporarily and retrospectively generated.

In light of the lack of evidence to deem that the Plaintiff engaged in credit business during the period in which the Plaintiff borrowed money and received interest, the interest income is deemed to be the profit of non-business loan, which was received by a person who does not engage in a business of lending money, as a result of temporary and incidental lending of money, and thus, the initial taxation disposition is lawful.

2012Guhap8311 global income and revocation of disposition

Note XX

Head of Seodaemun Tax Office

November 13, 2012

November 22, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s imposition of global income tax of 000 won for the year 2005, global income tax of 0000 won for the year 2006, global income tax of 2007, global income tax of 000 won for the year 2007, global income tax of 000 won for the year 2008, global income tax of 000 won for the year 2008, and global income tax of 000 for the year 2009 is revoked

1. Details of the disposition;

A. From February 20, 2004 to July 4, 2007, the Plaintiff leased 000 won in total to XX Construction Co., Ltd. (hereinafter referred to as "GG construction") six times, and received 000 won (hereinafter referred to as "interest income of this case") in total from 2005 to 2009 on 93 occasions. (B) Since January 24, 2011, the Plaintiff registered the business with a trade name called AA loan. On 9, 2011, the Plaintiff classified the interest income of this case as business income from credit business and filed a return and payment after the deadline for the comprehensive income tax accrued from 2005 to 2009.

C. On August 11, 201, the Defendant: (a) deemed the instant interest income to be a non-business loan profit accrued in 2005; (b) deemed the global income tax of 000 won for the year 2006; (c) global income tax of 000 won for the year 2007; (d) global income tax of 000 won for the year 2007; and (e) global income tax of 00 won for the year 2008; and (e) global income tax of 00 won for the year 2009 for the global income tax of 2009.

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on November 7, 201, but the Tax Tribunal dismissed the Plaintiff’s claim on December 23, 201.

[Ground of recognition] Unsatisfy, Gap evidence Nos. 1, 4, and 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff continued to provide loans and receive interest for profit, such as lending funds exceeding KRW 000 over 24 times over 8 years against many and unspecified persons (Gla, StateB, LCC, ED, StateE, FullF, Kim GG, and HaH), including the construction in XX, and receiving interest over 171 times. Accordingly, the instant disposition that deemed the instant interest income as an interest income (interest income) is unlawful, even though it constitutes business income, since the instant interest income was derived from the Plaintiff’s continuous and repeated business activities.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Facts of recognition

1) In lending funds to XX Construction, the Plaintiff was provided with the check number Ma 04306092, Ma 0409643, Ma 04286802).

2) From January 21, 2005 to September 28, 2005, 00 won in total nine times in the name of KimA from September 21, 2005, from September 6, 2005 to February 3, 2006, 00 won in total six times in the name of JejuB from September 6, 2005 to April 28, 2010, 200 won in total over nine times in the name of thisCC from January 3, 2008 to April 28, 2010, from August 1, 2008 to October 201, 2010 to October 28, 2010, 200 won in total from August 1, 2008 to October 20, 2010 to May 10, 2010 to 30G 20.10.

3) On March 22, 2010, the Plaintiff lent KRW 000 to the JejuK, and the PacificJ and HaH guaranteed this. On August 2011, the Plaintiff determined and lent KRW 000 as interest rate of KRW 1% to the Yellow LL and the due date of payment on July 2012, and KimG guaranteed the said obligation.

4) From around 2004, the Plaintiff had been receiving approximately KRW 000 per year from GATT construction while working in XX. From around 2009, the Plaintiff had registered real estate rental business and leased real estate to obtain approximately KRW 000 per year.

5) Meanwhile, when registering a credit business, the Plaintiff reported the place of business as Eunpyeong-gu Seoul Metropolitan Government 110-9 201, and the said place of business is the location of the head office XX Construction.

[Reasons for Recognition] Class A 2, 4, 5, 8, 9, 10, 11, 3 and 8 evidence Nos. 2, 4, 5, 8, 9, 10, 11, 3 and 8, and the purport of the whole pleadings

D. Determination

1) Whether the income from a lending of money is a business income which is a kind of interest income, depends on whether the lending of money constitutes a business under the Income Tax Act. Whether the act of lending money constitutes a business under the Income Tax Act ought to be determined in light of social norms in light of various circumstances, such as the profit-making nature, continuity, repetition, existence of a certain period of transaction, the length of the period of transaction, the amount of the lending and the amount of interest, etc. (see, e.g., Supreme Court Decision 87Nu784, Dec. 22, 1987).

2) In light of the above legal principles, it is recognized that the Plaintiff received money from the head office of the 2005 to 2009 from the date of the Plaintiff’s loan and received interest income from the head office of the 2005 to the 2009. However, in light of the following circumstances acknowledged by comprehensively taking account of the aforementioned evidence and the overall purport of pleading, the Plaintiff’s assertion that the Plaintiff borrowed money to KimA, JejuB, DaD, EE, and HaF and received interest from the Plaintiff, but the Plaintiff did not provide evidence about the amount of loan, the period of loan, the due date, and the due date of the loan, and the interest rate for the loan from the 2000 to the 2009. The Plaintiff’s personal information on the loan from the 2005 to the 2010-2010 and no other evidence exists to acknowledge that the Plaintiff had not been able to obtain money from the 2005 KG from the 201.

3. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.