Gould & Eberhardt, Inc. v. Commissioner

OPINION.

Arundell, Judge:

Here we have a somewhat different facet of the basic problem involved in Canister Co., 7 T. C. 967, and West Construction Co., 7 T. C. 974, that is, whether advance payments on Government contracts may be considered a part of the contractor’s borrowed capital within the meaning of section 719 of the Internal Revenue Code1 for purposes of computing the excess profits credit based on invested capital.

In the Canister case there were contracts with the Navy Department and in the West Construction Co. case, with the War Department. In this case the contracts were with the…