Philadelphia Nat. Bank v. Rothensies

KIRKPATRICK, District Judge.

This is a suit to recover income and excess profits tax paid by the plaintiff, a national bank, for the year 1937. All relevant facts have been stipulated.

For the years 1931 to 1936 inclusive, the-plaintiff charged off bad debts in large-amounts and took corresponding deductions in its tax returns. In each year the deductions were greatly in excess of the net income and there was a deficit after the charge-off, the total of such deficits being more than $10,000,000.

In 1937 the plaintiff made recoveries-amounting in all to $393,357.94 on account of the debts so…