York Safe & Lock Co. v. United States, J-79.

• Citation: 40 F.2d 148,69 Ct. Cl. 529
• Decision Date: 07 April 1930
• Docket Number: No. J-79.,J-79.
• Parties: YORK SAFE & LOCK CO. v. UNITED STATES.
• Court: U.S. Claims Court

69 Ct. Cl. 529, 40 F.2d 148 (1930)

YORK SAFE & LOCK CO. v. UNITED STATES.

No. J-79.

Court of Claims.

April 7, 1930.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Thomas G. Haight, of Jersey City, N. J. (J. Marvin Haynes and Robert H. Montgomery, both of Washington, D. C., Roswell Magill, of Chicago, Ill., and William Diebold, of New York City, on the brief), for plaintiff.

Charles R. Pollard, of Washington, D. C., and Herman J. Galloway, Asst. Atty. Gen. (Ralph E. Smith, of Washington, D. C., on the brief), for the United States.

Argued before BOOTH, Chief Justice, and LITTLETON, WILLIAMS, GREEN, and GRAHAM, Judges.

LITTLETON, Judge.

It is the position of the plaintiff that, inasmuch as it paid the additional tax determined for 1918 after the receipt of the Commissioner's notice of June 26, 1926, and before an assessment thereof had been made, and before the Commissioner had credited any portion of the overpayment for 1919 against the deficiency for 1918, it is entitled to interest upon that portion of the overpayment for 1919 which the Commissioner finally credited against the additional tax for 1918 from the date of the overpayment to October 13, 1926, the date on which the Commissioner approved the schedule of overassessment. In other words, plaintiff contends that it is entitled to interest upon the entire overpayment of $96,531.68 for 1919 instead of upon that portion which was actually refunded. Plaintiff further contends that, if it should be held that the Commissioner correctly credited a portion of the overpayment for 1919 against the deficiency for 1918, it is entitled to interest under the provisions of section 1116 of the Revenue Act of 1926, 26 USCA § 153 note, upon the overpayment so credited from the date the amount was overpaid to October 2, 1926, the date on which the additional tax for 1918 was assessed. In other words, plaintiff contends on this point that the deficiency for 1918 was "an additional assessment made under the revenue act of 1926."

The defendant claims that the statute, section 284(a) of the Revenue Act of 1926, 44 Stat. 9, 66, 26 USCA § 1065(a), is mandatory in its provision that any overpayment shall be credited against any tax or installment thereof due from the taxpayer, and that, since the additional tax for 1918 was due, and the Commissioner had determined and notified plaintiff of the amount of the deficiency for 1918 and the amount of overpayment for 1919, also that the 1919 excess would be applied as a credit against the deficiency for 1918, the plaintiff could not thereafter defeat the credit and obtain greater interest than that provided in the statute by paying the deficiency before the credit had been made effective. The defendant also contends that under section 1116 of the Revenue Act of 1926 interest upon overpayments applied as credits for years prior to 1921 is payable only to the due date of the tax against which the credit is taken, and, since the due date of the 1918 tax was prior to the date of the overpayment for 1919, no interest is allowable.

We are of opinion that the position of the defendant is correct. The provision of the statute that an overpayment shall be credited against any tax due is mandatory. Had the plaintiff discovered the deficiency in tax for 1918...