South Texas Lumber Co. v. Commissioner of Internal Rev., No. 11896.
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
| Writing for the Court | SIBLEY, HOLMES, and WALLER, Circuit |
| Citation | 162 F.2d 866 |
| Parties | SOUTH TEXAS LUMBER CO. v. COMMISSIONER OF INTERNAL REVENUE. |
| Docket Number | No. 11896. |
| Decision Date | 03 July 1947 |
162 F.2d 866 (1947)
SOUTH TEXAS LUMBER CO.
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 11896.
Circuit Court of Appeals, Fifth Circuit.
July 3, 1947.
J. Arthur Platt, of Houston, Tex., for petitioner.
Charles C. MacLean, Jr., of New York City, for petitioner in amicus curiae.
Carlton Fox and Helen R. Carloss, Sp. Assts. to the Atty. Gen., Sewall Key, Acting Asst. Atty. Gen., J. P. Wenchel, Chief Counsel, Bureau of Internal Revenue, and Charles E. Lowery, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.
Before SIBLEY, HOLMES, and WALLER, Circuit Judges.
WALLER, Circuit Judge.
The Taxpayer, a corporation under the laws of Texas, which keeps its books and files its income and excess profits tax returns on the calendar year and on the accrual basis, made sales of certain real estate and elected to compute and report the profit from such sales on the installment basis as provided by Sec. 44(b) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev. Code, § 44. The question presented is whether or not in computing the income and excess profits tax of the corporation for the year 1943 the corporation may, for excess profits credit, include as "equity-invested capital" uncollected profits which had been accumulated on its books on January 1, 1941, from such installment sales on the theory that such profits, although uncollected, represent "accumulated earnings and profits as of the beginning of the taxable year" under Sec. 718(a) (4) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 718(a) (4), which provides that equity-invested capital shall include "the accumulated earnings and profits as of the beginning of such taxable year; * * *"
In making the sales of the real estate on the installment plan, a deed was executed and delivered to the purchaser, with a vendor's lien retained to secure payment of the promissory notes, for the balance, which notes the purchaser had executed to the corporation. Being on the accrual basis of accounting, the corporation carried on its books as receivables all of these installment obligations, but for income tax purposes it showed as unreported income under the classification of "Unrealized Profit Installment Sales" such part of the proceeds from the installment sales that remained uncollected, and in its excess profits tax return for the year 1943 it claimed the unreported income, or that part not yet collected from the installment sales, as a part of its surplus and undivided profits in computing its equity-invested capital.
In redetermining the Taxpayer's excess profits tax for the calendar...
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...statutes, and they are not to be overruled except for weighty reasons. Commissioner v. South Texas Co., 333 U.S. 496, 501 (1948), revg. 162 F.2d 866 (5th Cir. 1947), revg. 7 T.C. 669 (1946); see also Fawcus Machine Co. v. United States, 282 U.S. 375, 378 (1931). The Court's task is not to s......
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Latham Park Manor, Inc. v. Comm'r of Internal Revenue, Docket Nos. 2339-76
...statutes, and they are not to be overruled except for weighty reasons. Commissioner v. South Texas Co., 333 U.S. 496, 501 (1948), revg. 162 F.2d 866 (5th Cir. 1947), revg. 7 T.C. 669 (1946); see also Fawcus Machine Co. v. United States, 282 U.S. 375, 378 (1931). The Court's task is not to s......
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