If profits generated during the preceding business year were unfairly leaked, or is recovered during the current business year, whether the disposition imposing corporate tax is appropriate (negative) by including them in income in the current business year (negative)

The provisions of Articles 9(1), 17(1), and 32 of the Corporate Tax Act provide that corporate tax shall be imposed only on the income calculated by deducting the total amount of losses from the total amount of earnings accrued in the pertinent business year from the total amount of earnings accrued in each business year for the pertinent business year for each business year. Since the part of the amount recovered from the unjust enrichment shall be the profits accrued during the period from 1972 to 1974, which was not unfairly leaked and has not been added to the gross income in each corresponding business year, the above amount shall be deemed the income in the business year from 1972 to 1974. Although the above amount was recovered or is to be recovered in the year of 1975, it shall not be immediately included in the income in the business year from the business year of 1975.

Articles 9(1) and 17(1) of the Corporate Tax Act; Article 12(1)8 of the Enforcement Decree of the Corporate Tax Act

[Defendant-Appellant] Korea Free Education Association (Attorney Hwang Jae-in, Counsel for defendant-appellant)

Head of Seodaemun Tax Office

Seoul High Court Decision 81Gu284 delivered on February 7, 1983

All appeals are dismissed.

The part arising from the plaintiff's appeal among the costs of appeal is assessed against the plaintiff's and the part arising from the defendant's appeal.

1. The defendant's grounds of appeal are examined.

According to the provisions of Articles 9(1), 17(1), and 32 of the Corporate Tax Act, the tax base and the amount of corporate tax for each business year shall be determined on the basis of the income of each business year, the income of each business year shall be the total amount of losses which belongs or will belong to the business year concerned after deducting the total amount of losses which belongs or will belong to the business year concerned from the total amount of the income which belongs or will belong to the business year concerned. Since the business year to which the gross income and the deductible expenses belong shall be the business year to which the date when the gross income and the deductible expenses are determined belongs, the corporate tax may be imposed only on the income calculated by deducting the total amount of deductible expenses

However, according to the records of the judgment below, the defendant included 100,689,657 won in the plaintiff's income in the business year of 1975 and imposed the corporate tax of this case. 100,479,657 won in the above unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust unjust enrichment from 1972 to 1974, and it was not unfairly leaked under the name of the publishing business as shown in the attached table (3) in the original sheet at the time of the original market and was not added to the gross income in each business year. Thus, the above 100,479,657 won in the original market at 1972 to 1974 business year, and even if the above amount was recovered or would be recovered to the plaintiff in the year of 1975, it cannot be included in the income amount under Article 12 (1) 8 of the Enforcement Decree.

In this regard, the court below's decision that the tax disposition in this case was unlawful because the above amount of KRW 100,479,657 was included in the plaintiff's business income in the business year of 1975 is just and it cannot be said that there were any errors in the misapprehension of legal principles, such as the theory of lawsuit, etc.

2. The plaintiff's attorney's grounds of appeal are examined.

The gist of the Plaintiff’s ground of appeal is that: (a) the Plaintiff unfairly disclosed KRW 100,689,657, out of the business profits accrued between 1972 and 1975, and such profits are not added to the gross income for the business year to which the date when the profits accrued; (b) the Plaintiff reported the corporate tax base for the business year 1975 by the Board of Audit and Inspection’s order to recover the total amount of KRW 100,689,657 (Evidence A) to the liability account for the amount to be added to the deductible expenses under the name of the amount to be recovered; and (c) the lower court determined that the amount of KRW 34,786,316, which was 316, which was 316, which was 1972 and 1974, which was 1976, which was 1975, which was 1975, which was 1975, which was 1975.

However, the above argument can not be a legitimate ground for appeal since it was not submitted until the closing of argument in the fact-finding court, and the above 34,786,316 won cannot be a legitimate ground for appeal. The plaintiff's 100,687,657 won which was appropriated in the debt account in the account of the 1975 business year, and which was appropriated in the asset account as the amount of 100,687,657 won, which was appropriated in the above debt account, can be deducted from the amount of 34,786,316 won corresponding to the above debt account only when the defendant denies all or part of the amount of 10,686,657 won which was appropriated in the above debt account, regardless of the amount of 100,687,657 won appropriated in the above debt account, and it is not clear that the plaintiff's 100,687,657 won should be added to gross income in the above 1975 business year.

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Shin Jong-sung (Presiding Justice)