Valspar Corp. v. Commissioner

Petitioner’s contention here — accepted by my brethren — seems to me to prove altogether too much; I think it can be demonstrated to lead to the conclusion that every promise to pay dividends out of earnings, i. e., to do what the law- requires, is an- adequate basis for the statutory credit. And this is contrary to the original and leading case of Helvering v. Northwest *175Steel Rolling Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29, and the precedents following it.

The contract here involved, upon scrutiny, appears to come to this, that no dividends shall be paid except out of net earnings, as…