Pacific Gas & Electric Co. v. Commissioner
United States Tax Court
1. Excess Profits -- Base Period -- Abnormal Deductions in Base Period -- Consequence of an Increase in Gross Income -- 711 (b) (1) (K) (ii), I. R. C. -- The respondent's argument, that a deduction for refund of excessive public utility rates collected in a prior base year may not be disallowed because they were due to an increase in gross income, since the income of that base year, though declining, was greater than it would have been if the excessive rates had not been…
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1. Excess Profits -- Base Period -- Abnormal Deductions in Base Period -- Consequence of an Increase in Gross Income -- 711 (b) (1) (K) (ii), I. R. C. -- The respondent's argument, that a deduction for refund of excessive public utility rates collected in a prior base year may not be disallowed because they were due to an increase in gross income, since the income of that base year, though declining, was greater than it would have been if the excessive rates had not been collected, is fallacious. 2. Deduction -- Capital Expenditure or Expense. -- An amount paid by the petitioner pursuant to a…
1Opinion of the Court
OPINION.
Murdock, Judge:
The facts essential to an understanding of the first issue may be stated briefly. The California Railroad Commission ordered the petitioner to reduce its rates for natural gas in July 1933. The petitioner made no change in its rates until May 1, 1936, when it reduced them to the level prescribed in the order. Meanwhile, it collected and reported as income the full amounts due under the old rates. It contested the order of the Commission in the Federa] courts continuously until a final unfavorable decision was rendered in 1939. The petitioner then had to refund the…
2Cases cited4 opinions
- William Leveen Corp. v. CommissionerUnited States Tax Court · 1944
- Green Bay Lumber Co. v. CommissionerUnited States Tax Court · 1944
- R. C. Harvey Co. v. CommissionerUnited States Tax Court · 1945
- Iron Fireman Mfg. Co. v. Comm'rUnited States Tax Court · 1945
3Cited by18 opinions
- Consolidated Apparel Co. v. CommissionerUnited States Tax Court · 1952
- Denman Tire & Rubber Co. v. CommissionerUnited States Tax Court · 1950
- Zellerbach Paper Co. v. CommissionerUnited States Tax Court · 1947
- Mine & Smelter Supply Co. v. CommissionerUnited States Tax Court · 1948
- Lorenz Co. v. CommissionerUnited States Tax Court · 1949
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