Repayment of debentures exempted under the Emergency Order Concerning the Stabilization and Growth of Economy (No. 2, 1972) shall be made and disposed of as a loss and the appropriation of earnings.

If the debentures exempted pursuant to Article 18 of the Emergency Order Concerning Economic Stabilization and Growth (amended by Presidential Decree No. 1972, Aug. 2, 1972) are repaid and disposed of as losses, they shall be treated as losses because they could not be treated as losses pursuant to Article 25 (7) of the Emergency Order. Therefore, the tax authority shall deny the loss and appropriate it as earnings, and the exempted amount added to earnings shall not constitute the disposal of earnings carried forward under Article 15 (1) 4 of the Corporate Tax Act or surplus funds under Article 9 (3) of the same Act.

Emergency Order Concerning Economic Stabilization and Growth ( August 2, 1972), Articles 18 and 25(7) of the Act, Articles 9(3) and 15(1)4 of the Corporate Tax Act

Co., Ltd.

The litigation performers of the Namwon District Office, the Decree of the Republic of Korea

Gwangju High Court Decision 75Gu51 delivered on May 20, 1976

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

The plaintiff's grounds of appeal are examined.

Examining the evidence and records of the judgment of the court below, the plaintiff company exempted the obligation to pay KRW 17,786,695 from its liability at the time of establishment of the court below in accordance with Article 18 of the Emergency Order on Economic Stabilization and Growth, 1972 (in this case, this amount shall be retained in the provisional deposit account and shall not be included in the profits), but it paid KRW 5,080,997 out of the amount discharged by the plaintiff company to the bondholder at will after August 3, 1972 (in accordance with Rule 12 of the Record, up to August 31, 1972), and therefore, the defendant recognized it as a decrease in net assets of the plaintiff company and recognized it as non-performance of the above KRW 17,786,695 as deductible expenses and deducted KRW 5,080,970,979 and KRW 9797,975,979,979,9797,9797,9797,9797,9797,97,979.

On the other hand, the above amount of KRW 17,786,695, which was exempted pursuant to Article 18 of the above Emergency Order, was disposed of in the name of the virtual loan (the short-term debt item under Article 7 (3) of the Enforcement Decree of the Enterprise Budget Act) at the time the Plaintiff Company initially borrowed it. If the debt was discharged pursuant to Article 18 of the above Emergency Order, the amount equivalent to the debt amount must be naturally included in the gross income as the profits of the Plaintiff Company's non-business revenue (the amount equivalent to the debt amount under Article 17 of the Financial Statements Rules of the Financial Statements). Since the amount equivalent to the debt amount is managed as the accounts for the non-business revenue of the Plaintiff Company, the deposit amount with respect to the debt amount, which was initially accounts for the non-business revenue of the Plaintiff Company, is naturally extinguished. According to Article 22 of the Financial Statements Rules, the net income amount is added to the profits of the Plaintiff Company and the amount deducted from the non-business expenses. Thus, the Defendant's calculation of the taxable income amount during the business period of the Plaintiff Company is justified.

In addition, according to the provisions of the latter part of Article 25 (7) of the above Emergency Order with respect to the payment of KRW 5,080,97, which is a part of the above debt amount of KRW 17,786,695, to the original bondholder of the above amount of gross income, the amount discharged shall not be deemed as deductible expenses for the calculation of the income of the company if the plaintiff company handled the amount of KRW 5,080,97 as deductible expenses in accordance with Article 18 of the above Emergency Order. Thus, if the above amount of gross income was disposed of as deductible expenses, it shall be deemed that the amount of net income equivalent to the above amount of KRW 97,00 is reduced for the calculation of the income of the plaintiff company and the amount of the above amount of gross income which was not disposed of as deductible expenses by the defendant's disposal of the above amount of KRW 17,786,69,00,000 which is the actual amount of gross income, it shall be deemed that the above amount was disposed of as deductible expenses of KRW 9797,0.

In this regard, the court below's rejection of the plaintiff's claim is just and there is no error of law by misunderstanding the legal principles of relevant Acts and subordinate statutes, or by misunderstanding the legal principles of relevant Acts and subordinate statutes, or by misunderstanding the legal principles of tax accounts and corporate accounting, as stated in the judgment

Therefore, the appeal shall be dismissed and the costs of appeal shall be assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Hong-chul (Presiding Justice)