Whether the calculation of the deemed rent for rental deposit is appropriate;

The case holding that, with respect to the plaintiff's assertion that the rental deposit was appropriated for the construction expenses of the building related to the leasing business or for the repayment of the loan therefor, the construction expenses out of the total amount of the rental deposit shall be repaid or the fact that the loan was partially appropriated for the redemption

The contents of the decision shall be the same as attached.

1. The Defendant’s disposition of imposition of global income tax amounting to KRW 81,184,90 on January 16, 1994 by the Plaintiff, which exceeds KRW 68,545,080, shall be revoked. 2. The remainder of the Plaintiff’s claim is dismissed on February 1, 1994.

1. Under the circumstances leading up to the instant taxation disposition, there is no dispute between the parties.

The occurrence of the instant rental deposit

"Around April 1981, 1981, ○○-dong ○○○○-dong 1, 153-4 underground floor and about 886 square meters on the ground 4th floor (hereinafter "the building in this case"). On July 28, 1990, ○○ Bank Co., Ltd. (hereinafter "○○ Bank"), most of the first and second floors among them and the second floor of the building in this case were leased to several persons by way of lease or monthly rent for 10 billion won for lease on a deposit basis, and the total amount of lease deposit (including lease deposit; hereinafter the same shall apply) for the leased part during the taxable period of the global income tax for 191 for the portion of the building in this case (hereinafter referred to as "the income tax in this case") was included in the rent for KRW 1.58 billion among the total amount of rental deposit (hereinafter referred to as "lease deposit").

"The defendant only reported the monthly rent of 1,905,660 won as the total income amount of the real estate income item by denying the contents of the income tax return submitted by the plaintiff, and only reported the monthly rent of 1,905,660 won, as the total income amount of the real estate income item, Article 29 (1) of the former Income Tax Act (amended by Act No. 4661, Dec. 31, 1993; hereinafter referred to as the "Act") and Article 58 of the Enforcement Decree thereof (amended by Presidential Decree No. 14083, Dec. 31, 1993; hereinafter referred to as the "Decree") did not include the deemed rent of 157,605,477 won as the total income amount of the real estate income amount of 16,54,882 won as the total income amount of the real estate income item, and then calculated the amount of the real estate income amount of the real estate income amount of 16,546,74747,7947,797.7

"The defendant recognized that 350 million won out of the security deposit of this case is appropriated for repayment of borrowed money to repay the new construction cost of the building of this case by the plaintiff's appeal against the above disposition, and excluded this amount from the object of calculation of deemed rent and decided to rectify the tax base and tax amount of the income tax of this case to 73,495,000 won on June 30, 1994." "The defendant corrected the amount of the income tax of this case to 73,495,000 won on September 16, 1996." The above security deposit 350 million won on September 16, 1996 to 81,184,900 won on the ground that only the amount calculated by dividing it according to the size ratio of the leased portion among the buildings of this case constitutes the amount of redemption of the loan related to the lease business of this case, the above income tax of this case was adjusted to 81,184,900 won."

With respect to the Defendant’s assertion that the instant taxation disposition was legitimate in accordance with the relevant provisions of deemed rent, the Plaintiff asserts that the instant taxation disposition was unlawful for the following reasons.

Illegality of Decision of Estimated Investigation

If the details of the global income tax return submitted by the tax authority are incomplete or erroneous, the tax authority shall make every effort to conduct a field investigation, such as requesting the taxpayer to revise the tax return and submitting new evidence, and even if it is impossible to conduct a field investigation of the amount of income, the amount of income shall be determined by the estimation investigation exceptionally only in cases where it is impossible to conduct a field investigation of the amount of income. However, the Defendant recognized the amount of the global income tax return submitted by the Plaintiff without giving the Plaintiff an opportunity to submit evidentiary documents regarding the facts appropriated for repayment of borrowed money related to the rental business as follows, and issued the instant tax disposition by recognizing

Repayment of loans related to rental business;

"The plaintiff appropriated the total amount of the deposit money of this case to redeem the loan money of this case for the repayment of the loan money of this case to the 200 million won for the construction expenses of this case or the redemption of the loan money of this case to the 300 million won for the construction expenses of this case. The defendant recognized that only the loan money of this case was appropriated for the redemption of the loan money of this case to the 200 million won in the name of the non-party ○ Construction Co., Ltd. (hereinafter referred to as "○○ Construction") for the partial redemption of the new construction expenses of this case as claimed later by the plaintiff as the construction expenses of the building of this case and excluded the loan money of this case from the object of the calculation of rent for the remaining portion from the loan money of this case to the 300 million won for the construction expenses of this case. The plaintiff considered the loan money of this case to be appropriated to the 200 million won for the construction expenses of this case as the loan money of this case to the 200 million won in total after the completion of the construction work of this case.

"The plaintiff repaid 80 million won (50 million won + 240 million won) in total of the construction cost of the building of this case with borrowed money and security deposit as above, but thereafter, interest on borrowed money of 60 million won (200 million won + 350 million + 40 million) continues to exist and interest on borrowed money again is obtained in order to pay interest thereon, and 8.6 billion won in total from Non-Party ○○ Life Insurance Co., Ltd. (hereinafter "O○○ Life Insurance Co., Ltd.") borrowed money of 150 million won in total and repaid the principal and interest on borrowed money of 150 million won in total from ○○○ Housing Co., Ltd. (hereinafter "O○○ Life Co., Ltd.") with borrowed money of 150 million won in total with borrowed money of 50 million won in total from 20 million won in excess of 20 million won in excess of 19.7 billion won in excess of 200 million won in the parking lot of this case."

3. Judgment of party members

A. As to the Plaintiff’s assertion that the revenue of deemed rent of this case was unlawful since it was determined by the method of an estimate investigation

"Article 29 (1) of the Act and Article 58 (2) and (3) of the Decree provide that when the amount of income generated from the security deposit, security deposit, or amount of money similar thereto (excluding the amount appropriated for the repayment of loans related to rental business) a taxpayer has leased real estate, etc. falls short of the amount calculated by multiplying the interest rate on the security deposit, etc. by the interest rate of financial institutions, the amount calculated as prescribed by the Presidential Decree (the amount calculated by multiplying the security deposit interest rate of one year as of the end of the relevant taxable period) shall be deemed as including the amount calculated as prescribed by the Presidential Decree in the total amount of income in the calculation of real estate income. However, according to the plaintiff's return of the income tax of this case, 1.580 million won was stated in the aggregate balance sheet, which is one annexed document, and the total amount of income of real estate income shall not be deemed as included in the above amount in the return of the rental deposit or the amount of the loan related to the rental deposit of this case, the defendant shall be deemed as not only in the plaintiff's assertion that the above provision and the amount of the rental deposit should be included in the calculation.

(i)Legal principles as to deemed rents, etc.

Article 29 (1) of the Act provides that "a rental deposit excluded from the object of calculation of deemed rent shall be appropriated for the repayment of "loan related to a leasing business". However, it is reasonable to stipulate that "a rental deposit shall not be used as new funds for acquisition of real estate, and that the unpaid construction cost of the leased real estate shall be repaid with a rental deposit, as well as that it shall be the same as an act of acquiring the leased real estate from a third person with a loan from a third person, and redemption of the loan with a rental deposit shall be the same economic substance. Therefore, the amount appropriated for repayment of unpaid construction cost of the leased real estate out of a rental deposit shall be excluded from the rental deposit which is the object of calculation of deemed rent (see Supreme Court Decision 94Nu5731 delivered on February 10, 195)."

D. In the case of this case

An amount excluded from the calculation of deemed rent out of the instant rental deposit;

In light of the legal principles of deemed rent in front of the rental deposit for the leased real estate, if the Plaintiff repaid the loan to repay the construction cost, such as new construction or remodelling, or the loan to repay this construction cost, among the buildings in this case, the part appropriated for the repayment should be excluded from the calculation of deemed rent. On the other hand, even if the Plaintiff directly repaid the loan to repay the construction cost in this case as part of the rental deposit for the purpose of repayment or borrowed funds again to repay it, and repaid the loan as part of the rental deposit for this case, such amount shall not be excluded from the calculation of deemed rent. Accordingly, the part excluded from the calculation of the deemed rent among the rental deposit for this case is limited to the amount of repayment of construction cost for the leased portion in 191, which is the taxable period of the income tax of this case among the buildings in this case (i.e., the third floor, excluding the third floor) or the amount evaluated to have been directly repaid or appropriated for repayment of the principal of the loan in this case.

Therefore, this case’s new construction cost is 50 million won or more, and each testimony of 00 million won or less (except the part believed below) of a witness 1, 200 million won or less, which is consistent with the Plaintiff’s assertion that the construction cost of 30 million won or more for the new construction of the building was 80 million won or more, cannot be believed in light of the Plaintiff’s close relation to the construction of 30 million won, and the fact-finding result of 11 evidence, 12 evidence, 14 evidence 1 to 30 million won, and 90 million won as to the new construction cost of the building of this case’s 30 million won or more, and the Plaintiff continued to establish a new construction report of 30 million won or more for the purpose of calculating the construction cost of the building of this case’s new construction work of this case’s 90 million won or more under the name of 50 million won or more, and the Plaintiff continued to recognize the amount of the above construction cost of the building’s new construction work cost of this case’s 10 billion won or more.

However, the National Tax Tribunal recognized 350 million won as the new construction cost of the building of this case, and decided that the construction cost of the building of this case shall not be divided in proportion to the construction cost of only the leased part of the above construction cost in accordance with the legal principles as to the above construction cost, and that the above construction cost of this case shall be deemed appropriated as the rental deposit of this case, notwithstanding the decision of re-decision that the defendant excluded the amount calculated by dividing the construction cost of only the leased part of the above 350 million won as against the binding speed under Article 80 of the Framework Act on National Taxes from the object of calculating the deemed rent, but the defendant should recognize the new construction cost of the leased part of the building of this case as 350 million won according to

Furthermore, as a result of Gap evidence 1-2, Gap evidence 1-2, Gap evidence 2-5, Gap evidence 18-20, testimony of ○○○, Kim○○, ○○○○○, and Kim○-○'s testimony (Provided, That each testimony of ○○, Kim○, and ○○○○○ is not inconsistent with the following facts), the party member's on-site inspection result, the result of the appraisal of construction cost of ○○, and the whole purport of oral argument, the plaintiff repaid 350 million won of the new construction cost of the building with the above loan from ○○○○○○○○○○○, 200,000,000 won. The plaintiff received 200,000,000 won of 70,000,000 won of 705,000,000 won of 70,000,0000 won of 70,000,000 won of 205,00.75,000.

According to each of the above facts, the total amount of the construction cost and the additional construction cost for the leased portion among the buildings of this case (350,707,000 +81,707,000) is 431,707,000 won (350,000 +81,707,000), and only the amount equivalent to the above construction cost out of the rental deposit 1,580,000,000 shall be deemed to have been repaid or appropriated for repayment of the loan for repayment. Thus, the amount excluded from the calculation of the deemed rent shall be limited to the above 431,707,00 won, and the remainder of 1,148,293,00 won shall not be excluded from the calculation of the deemed rent.

The reasonable tax amount of the income tax of this case

As of the 1991 taxable period of the income tax of this case, the interest rate of 1 year of contract is 10% per annum; the Plaintiff reported 1,905,660 won as real estate income for the pertinent taxable year; 27,629,670 won as business income; and the fact that the Plaintiff excessively appropriated 7,034,882 won as total of 5,591,944 won as real estate income reported as necessary expenses for real estate income; and all parties are not disputed; according to the purport of subparagraph 14-1 through 4 of subparagraph B and each of the arguments, the interest rate of 574,830,000 won in the lease contract in existence in 191 (the amount obtained by multiplying the lease deposit of this case by the deposit period during the pertinent taxable period pursuant to Article 22(2) of the Enforcement Rule of the Income Tax Act) among the lease deposit of this case, as shown in attached Form 574,830,000,000.

Therefore, the deemed rent for the instant rental deposit is 114,318,067 won [57,834,00,000,000 - (431,707,000 - 431,707,005)]. The real estate income amount is 1,905,660 won in the Plaintiff’s return amount (monthly tax portion) and the said deemed rent is 123,258,609 won in the sum of KRW 114,318,067 in the said deemed rent and the non-deductible expenses, and KRW 7,034,88,60 in the said necessary expenses. If the reasonable tax amount of the income tax of this case is calculated lawfully in accordance with the relevant data and relevant regulations that were present at the argument of this case, it shall be 68,545,080 won as shown in the attached tax calculation statement.

4. Conclusion

Therefore, the part of the taxation disposition of this case which exceeds the above amount of 68,545,080 won should be revoked as unlawful. Thus, the plaintiff's claim is justified within the scope of the above recognition, and the remaining claims shall be dismissed in an unfair manner. It is so decided as per Disposition by applying the provisions of Article 8 (2) of the Administrative Litigation Act and Article 92 of the Civil Procedure Act to

January 16, 1997