Malat v. CIR, 17289-17292.
| Decision Date | 17 July 1962 |
| Docket Number | No. 17289-17292.,17289-17292. |
| Parties | William MALAT and Ethel Malat, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Ben LESSER and Lily Lesser, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Louis RUDMAN and Shirley Rudman, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Louis LOMAS and Claire Lomas, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
George T. Altman, Beverly Hills, Cal., for appellant.
Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott and Morton K. Rothschild, Attorneys, Department of Justice, Washington, D. C., for appellee.
Before JERTBERG and DUNIWAY, Circuit Judges, and DAVIS, District Judge.
We have before us four separate petitions to review four separate decisions of the Tax Court of the United States. The four cases were consolidated for hearing and briefing before the Tax Court. The opinion of the Tax Court is reported at 34 T.C. 365.
Since the questions of law presented for decision on the several petitions are common to the four cases, we will dispose of the four cases in a single opinion.
Three of the petitions involve income taxes and additions to tax for the calendar years 1950 and 1951. The other petition involves income taxes and additions to tax for the fiscal years ended November 30, 1950, and November 30, 1951.
In all four cases the respective taxpayers reported as long-term capital gains on their individual income tax returns for the two taxable years stated, net gains from the sales of certain real estate properties acquired by them from the following corporations of which they were shareholders: Pioneer Plaza, Inc., Pioneer Plaza No. 2, Inc., and Teri-Plaza, Inc. The Commissioner issued deficiency notices to petitioners on their individual income taxes for those two years disallowing the treatment of this income as long-term capital gains.
The Commissioner determined deficiencies in income tax and additions to tax as follows:
Additions to tax under
section 294(d)(2) IRC
Petitioner Year Deficiency of 1939
William Malat 1950 $14,542.59 $1,003.26
and Ethel Malat 1951 12,746.75 1,092.46
Ben Lesser and Taxable year 12,923.84 1,010.01
Lily Lesser ended Nov. 30
1950
Taxable year 11,253.70 none
ended Nov. 30
1951
Louis Rudman and 1950 15,225.83 1,424.60
Shirley Rudman 1951 12,950.63 1,142.63
Louis Lomas and 1950 18,083.77 1,362.28
Claire Lomas 1951 9,958.91 1,186.22
The Commissioner in the several notices of deficiency, after setting forth the amounts of deficiency indicated above, attached several schedules showing the adjustments made to net income and an explanation of the adjustments. As an illustration, the relevant portion of Schedules 1 and 2 attached to one of the deficiency notices is as follows:
The other deficiency notices contain similar adjustments which followed the same pattern differing only in amount.
After all four cases were at issue in the Tax Court, issues not involved in this appeal were settled by stipulations and concessions which resulted in a reduction of deficiencies asserted for each of the two years below the amounts stated in the deficiency notices.
Prior to the time for hearing of the consolidated cases, the petitioners in each case filed a motion for judgment on the pleadings. As an illustration, the relevant portion of the motion in one of the cases is as follows:
Similar motions were filed by petitioners in the other cases.
Consistent with the position taken in the motions, petitioners offered no evidence nor did the Commissioner. Hence, when the cases were submitted to the Tax Court for decisions, there remained only the issues raised by the motions for judgments on the pleadings.
The Tax Court denied the motions for judgments on the pleadings. In its opinion the Tax Court stated:
Separate decisions were rendered in the four cases. As an illustration, the decision in one of the cases is as follows:
"Ordered and Decided: That there are deficiencies in income tax for the taxable years 1950 and 1951 in the respective amounts of $10,289.33 and $6,418.50, and there are additions to tax under Section 294 (d), I.R.C. of 1939, for the taxable years 1950 and 1951 in the respective amounts of $748.07 and $899.28."
The decisions in the other cases were in the same form differing only in the amounts of deficiencies and additions to tax.
We will first consider petitioners' contention that the Tax Court lacked jurisdiction to redetermine the determinations made by the Commissioner in these four cases. Petitioners argue that, by reason of the conflicting holdings by the Commissioner in the deficiency...
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