United Cigar-Whelan Stores Corporation v. District of Columbia
| Decision Date | 12 September 1949 |
| Docket Number | No. 9958.,9958. |
| Parties | UNITED CIGAR-WHELAN STORES CORPORATION v. DISTRICT OF COLUMBIA. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Mr. Richard J. Roche, of the Bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Messrs. Chapin B. Bauman and John H. Burnett, Washington, D. C., were on the brief, for petitioner.
Mr. Harry L. Walker, Assistant Corporation Counsel, Washington, D. C., with whom Messrs. Vernon E. West, Corporation Counsel, and Chester H. Gray, Principal Assistant Corporation Counsel, Washington, D. C., were on the brief, for respondent.
Before EDGERTON and PROCTOR, Circuit Judges, and H. CHURCH FORD, District Judge sitting by designation.
For $30,000 paid by its lessors, petitioner as lessee consented to cancel a lease that had some years to run. The disputed question is whether the cancellation was a "sale or exchange". Gain from sale or exchange of a capital asset is exempt from the District of Columbia income tax. 53 Stat. 1091, D.C.Code(1940) § 47 — 1506.
We agree with the Board of Tax Appeals that there was no sale or exchange and petitioner's gain was taxable. A lease that is cancelled is not transferred but terminated. Termination or destruction is not sale or exchange. Cf. Hale v. Helvering, 66 App.D.C. 242, 85 F.2d 819. It may be argued that petitioner parted with certain rights and privileges and that, in substance if not in form, these passed to the lessor. But such analysis has little or no bearing on the issue, since the meaning of words is not a matter of logic but of usage. No usage that we know of calls cancellation of a lease a sale or exchange.
Affirmed.
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...the District of Columbia which says that a cancellation of a lease is not a "sale or exchange". United Cigar-Whelan Stores Corp. v. District of Columbia, 1949, 85 U.S.App.D.C. 301, 176 F.2d 952. The question arose under the District of Columbia income tax act and, therefore, is not a decisi......
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Golonsky v. Comm'r of Internal Revenue, Docket Nos. 21406
...85 F.2d 819, involving the satisfaction of a debt in which no property was received by the debtor. United Cigar-Whelan Stores Corporation v. District of Columbia, 176 F.2d 952, holds to the contrary but without stating a convincing reason. The surrender of an option is likewise different be......