Grant, Collector v. Hartford and New Haven Railroad Company
Supreme Court of the United States
Error to the Circuit Court of the United States for ,the District of Connecticut. This action was brought by the Hartford and New Haven Railroad Company against Henry A. Grant, collector of internal revenue for the first district of Connecticut, to recover the sum of $2,785.65 income tax, and $139.28 penalty, paid to .him under protest in January, 1868. The controversy arose upon the question of the company’s income for the two fiscal years ending Aug. 31,1867. During that…
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Error to the Circuit Court of the United States for ,the District of Connecticut. This action was brought by the Hartford and New Haven Railroad Company against Henry A. Grant, collector of internal revenue for the first district of Connecticut, to recover the sum of $2,785.65 income tax, and $139.28 penalty, paid to .him under protest in January, 1868. The controversy arose upon the question of the company’s income for the two fiscal years ending Aug. 31,1867. During that period they expended from their earnings $55,712.60, in constructing over the Farmington River at Windsor a new stone…
1Opinion of the Court
Ms. Justice Bradley
delivered the opinion of the court.
The company having returned the entire balance of their gross earnings over and above current expenses, in the shape of dividends and surplus, for the period in question, and paid the regular tax thereon, we do not see why this was not a full compliance with the law. The object of the law was to impose a tax on net income, or profits, only; and that cannot be regarded as net income, or profits, which is required and expended to keep the property up in its usual condition proper for operation. Such expenditure. is properly classed with…
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