Pabst Air Conditioning Corp. v. Commissioner
United States Tax Court
The petitioner, seeking relief under section 722 (b) (3) and ( 4) of the Internal Revenue Code, was engaged in the business of air conditioning. It commenced business in January, 1938. Petitioner offered the opinion of its president as to what its earnings would have been in the base period. This was based in part upon facts after December 31, 1939, and in part contradictory of the evidence.
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The petitioner, seeking relief under section 722 (b) (3) and ( 4) of the Internal Revenue Code, was engaged in the business of air conditioning. It commenced business in January, 1938. Petitioner offered the opinion of its president as to what its earnings would have been in the base period. This was based in part upon facts after December 31, 1939, and in part contradictory of the evidence. Reconstruction was also based in part upon data from the building and construction or construction industry. Comparison of business experience with that of other similar corporations was not made. Held,…
1Opinion of the Court
OPINION.
Disney, Judge:
Section 722 of the Internal Revenue Code, in general, provides for the use of a constructive instead of the actual average base period net income in order to arrive at any excess in profits, provided the taxpayer establishes that otherwise the tax is excessive and discriminatory and also establishes what would be a fair and just amount representing normal earnings to be used as such constructive average base period net income. Subsection (b) (3) recites that the tax shall be considered excessive and discriminatory if the “average basé period net income is an inadequate…
2Cases cited4 opinions
- East Texas Motor Freight Lines v. CommissionerUnited States Tax Court · 1946
- 7-Up Ft. Worth Co. v. CommissionerUnited States Tax Court · 1947
- Stonhard Co. v. CommissionerUnited States Tax Court · 1949
- Arden-Rayshine Co. v. CommissionerUnited States Board of Tax Appeals · 1941
3Cited by38 opinions
- Farmers Creamery Co. v. CommissionerUnited States Tax Court · 1952
- Ray Campbell, Wise & Wright, Inc. v. CommissionerUnited States Tax Court · 1950
- Powell-Hackney Grocery Co. v. CommissionerUnited States Tax Court · 1952
- Austin Co. v. CommissionerUnited States Tax Court · 1954
- M. W. Zack Metal Co. v. CommissionerUnited States Tax Court · 1954
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