The government has appealed a court ruling that ¥120 billion in taxes and penalties paid by the IBM Japan group should be refunded because regulators wrongfully believed the company abused tax consolidation regulations.

On May 9, the Tokyo District Court endorsed the IBM Japan group's complaint against back taxes and penalties the National Tax Agency ordered, saying, "None can conclude that IBM abused the corporate tax law to avoid tax."

IBM AP Holdings, which now wholly owns IBM Japan, acquired IBM Japan shares from IBM Corp. of the United States in 2002.

It then sold a portion of those shares to IBM Japan at a lower price and booked a loss of more than ¥400 billion on the sale.