Seoul Administrative Court 201Guhap38698 ( October 17, 2012)

National Tax Service Review Income 2011-0073 (29 August 2011)

Since interest claim cannot be realized because it is impossible to collect it, it is legitimate to impose global income tax.

The evidence submitted by the Plaintiff alone that the interest claim on the settlement statement becomes impossible to recover due to the debtor's bankruptcy, etc., and it cannot be objectively deemed that the interest income could not be realized in the future. Therefore, the tax disposition based on global income tax is legitimate

2012Nu15984. Detailed global income and revocation of disposition

Park XX

Head of Nowon Tax Office

Seoul Administrative Court Decision 2011Guhap38698 decided May 17, 2012

December 12, 2012

January 16, 2013

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The disposition of imposition of global income tax of KRW 000 on April 11, 201 rendered by the Defendant to the Plaintiff on April 11, 201 shall be revoked.

1. The part citing the judgment of the court of first instance

The reasons for this court's ruling are as follows: (a) the dismissal of the first instance court's ruling or addition of the judgment on the plaintiff's assertion is identical to the corresponding part of the first instance court's judgment. The corresponding part shall be cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Parts in height:

The following shall be the third following:

[G] On the premise that the sales contract of this case was concluded at the beginning for the Plaintiff as to the real estate of this case, the Plaintiff filed a claim for refund, etc. of the purchase price (Seoul Western District Court 2005Gahap10012) against the Plaintiff. The court of first instance accepted most of the claims of this A on November 16, 2006 and rendered a judgment in favor of the Plaintiff. However, the second island court (Seoul High Court 2006Na116872), which appealed against the Plaintiff, rendered a judgment dismissing the claims of this case unlike the first instance court on May 29, 2008 (the above judgment became final and conclusive, hereinafter referred to as "related judgment").

In light of the circumstances surrounding the conclusion of the instant sales contract, the content and the settlement process of the agreement, the circumstances leading up to the relevant judgment, etc., it is difficult to deem that the instant settlement statement was prepared around April 6, 2005, when the instant sales contract was concluded (Evidence No. 4), and that it is difficult to deem that there was a dispute surrounding the interest claim itself in the instant settlement statement between the Plaintiff and the AA (the purport of the entire pleadings), and other circumstances leading up to the relevant judgment, such as the conclusion process of the instant sales contract, the details and the settlement process of the agreement, and the circumstances leading up to the relevant judgment.)

3. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

In the relevant judgment, it does not recognize the purchase price of KRW 000 as claimed by thisA, and it is deemed that the total amount of the above collateral is KRW 000 as the purchase price, and in relation to interest claim of KRW 000 on the settlement statement of this case, a promissory note, issued by thisA for the purpose of securing it, has not yet been paid as bankruptcy, etc. of thisA. In light of the fact that a promissory note, which is the face value of KRW 000 on the settlement statement of this case, does not have to be paid as a result of the bankruptcy, etc. of this case,

B. Determination

1) The Income Tax Act adopts the so-called principle of confirmation of the right to taxable income, deeming that the right that is the cause of income has been realized when there is no actual income, and adopts the so-called principle of determination of the right to taxable income. However, even if a claim that is the cause of income has arisen, if it is objectively evident that the claim that is the cause of income subject to income becomes impossible to recover due to the debtor's bankruptcy, etc. and that it becomes no possibility of realizing the income in the future, the income tax that is the object of economic benefits loses its premise, and such income cannot be imposed on the basis of taxable income (see, e.g., Supreme Court Decision 96Nu1105, Dec. 10, 1996). However, it should be clearly stated that the taxpayer has no income subject to taxation by asserting and proving such circumstance (see, e.g., Supreme Court Decision 98Du16149, Sept. 8, 200).

2) In the instant case, the following circumstances, which can be known with the aforementioned evidence and factual relations, namely, the Plaintiff and thisA, around April 6, 2005, at the time of the conclusion of the instant sales contract, have settled the instant settlement statement containing 00 won of interest claim on the instant loan (i.e., 00 wonx5 months, interest from December 2004 to April 205), and immediately after the completion of the registration of ownership transfer on the instant real estate, the Plaintiff appears to have not separately requested thisA to pay the interest claim on the instant settlement statement. Meanwhile, even if the Plaintiff’s submission of the settlement statement to the Plaintiff on April 1, 204, there is no possibility that the Plaintiff would have been able to receive the said settlement statement from the Plaintiff at the time of the settlement of accounts, based on the premise that there was no possibility that the Plaintiff would not have been able to receive the said settlement statement from the Plaintiff at the time of the settlement of accounts (Evidence No. 1, 2000 won).

4. Conclusion

The judgment of the first instance is justifiable. The plaintiff's appeal is dismissed.