Commissioner of Internal Revenue v. Pontarelli

MAJOR, Circuit Judge.

This is a petition for review of a decision of the United States Board of Tax Appeals finding interest on special assessment bonds, owned by respondent exempt from income taxes.

The facts as stipulated are briefly as follows: The City of Chicago, Illinois, is a municipal corporation, and as such, a political subdivision of the State of Illinois. It was and is vested by the law of the State, with power and authority to make local improvements and to defray the cost thereof by special assessment upon contiguous property or by general taxes or otherwise as by ordinance it…