Consolidated Chol. G. & SM Co. v. Commissioner of Int. Rev.

Decision Date11 February 1943
Docket NumberNo. 10198.,10198.
PartiesCONSOLIDATED CHOLLAR GOULD & SAVAGE MIN. CO. v. COMMISSIONER OF INTERNAL REVENUE.
CourtU.S. Court of Appeals — Ninth Circuit

John D. Gallaher, of San Francisco, Cal., for appellant.

Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key, Bernard Chertcoff, and Arthur A. Armstrong, Sp. Assts. to the Atty. Gen., for appellee.

Before DENMAN, HANEY, and STEPHENS, Circuit Judges.

DENMAN, Circuit Judge.

Petitioner seeks a review of a decision of the United States Board of Tax Appeals, now Tax Court of the United States, sustaining a deficiency in income taxes for the tax years 1936 and 1938, computed by the respondent. The deficiency is based on the disallowance of a deduction claimed by petitioner from gross income "from the extraction of gold by the petitioner from certain dumps consisting of rocks and ore material which had never been milled or processed in any way but which had been deposited upon lands owned by the petitioner from mines not located on such lands many years prior to the acquisition of said lands by the petitioner."

The deduction is a matter of legislative grace, White v. United States, 305 U.S. 281, 292, 59 S.Ct. 179, 83 L.Ed. 172; New Colonial Ice Co. v. Helvering, 292 U. S. 435, 440, 54 S.Ct. 788, 78 L.Ed. 1348, and the petitioner must bring itself clearly within the statute under which the deduction is claimed. It relies upon

"§ 23. Deductions from gross income.

In computing net income there shall be allowed as deductions:

* * * * *

"(m) Depletion. In the case of mines, oil and gas wells, other natural deposits, and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Commissioner, with the approval of the Secretary. * * *" Revenue Act of 1934, c. 277, 48 Stat. 680, U.S.C., Title 26, § 23, 26 U.S.C.A. Int.Rev.Code, § 23.

We agree with the Board that rocks and ore material, unworked other than in the fracturing and crushing incident to its removal from a mine, dumped from mines not owned by petitioner upon land not then owned but subsequently acquired by petitioner are not within the classification of "mines, * * * and * * * other natural deposits." It is a rational interpretation of Sec. 23(m) that the word "mines" is included in the concluding general classification of "natural deposits." If the dumps could be regarded as a mine, they are made by man and not by...

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11 cases
  • Estate of Kalahasthi v. U.S.
    • United States
    • U.S. District Court — Central District of California
    • July 7, 2008
    ..."specified terrorist victim" must be resolved against Kalahasthi and in favor of the government. See Consolidated Chollar Gould & Savage Min. Co. v. C.I.R., 133 F.2d 440, 441 (9th Cir.1943) ("[T]he ambiguity arising from the two possible rational interpretations must be resolved against the......
  • Farmar v. United States
    • United States
    • U.S. Claims Court
    • January 10, 1983
    ...U.S. 581, 57 S.Ct. 46, 81 L.Ed. 428 (1936). Ambiguities should be resolved against the taxpayer. Consolidated Chollar Gould & Savage Min. Co. v. Commissioner, 133 F.2d 440, 441 (9th Cir. 1943). III Though their meaning is not absolutely plain, the words of § 613A(c) suggest to us that Congr......
  • Turkey Run Fuels v. United States
    • United States
    • U.S. Court of Appeals — Third Circuit
    • March 14, 1957
    ...Jones, 10 Cir., 1940, 115 F.2d 61, certiorari denied 312 U.S. 686, 61 S.Ct. 613, 85 L.Ed. 1124; Consolidated Chollar G. & S. M. Co. v. Commissioner of Internal Rev., 9 Cir., 1943, 133 F.2d 440; Chicago Mines Co. v. Commissioner of Internal Rev., 10 Cir., 1947, 164 F.2d 785, and Hoban v. Vil......
  • Chicago Mines Co. v. Commissioner of Internal Rev.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • January 8, 1948
    ...a dump, created in prior years, to depletion allowance on income from the dump. In a subsequent case, Consolidated Chollar Gould & Savage Mining Co. v. Commissioner, 133 F.2d 440, 441, the Ninth Circuit held squarely that a dump of tailings and low-grade ore, resulting from mining operation......
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  • CHAPTER 12 INCOME TAXATION OF GEOTHERMAL RESOURCES
    • United States
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    ...Utah Salt Company, Inc. v. Wise, 370 F.2d 976 (10th Cir. 1967). [33] Consolidated Shollar Gould and Salvage Mining Co. v. Commissioner, 133 F.2d 440 (9th Cir. 1943); Atlas Milling Co. v. Jones, 115 F.2d 15 (10th Cir. 1940). See also, Soil Builders, Inc. v. United States, 277 F.2d 570 (5th C......

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