W. B. Knight Machinery Co. v. Commissioner
United States Tax Court
1. Petitioner is engaged in the manufacture of milling machines. It was incorporated in 1905 and produced its first machine in 1906. It later manufactured other models of the original type. In 1935 petitioner became convinced that its machines were outmoded and proceeded, through its officers, to create, design, and manufacture a new type of miller calculated to perform functions greater in extent and different in character from those performed by the old machines.
Read the full summary
1. Petitioner is engaged in the manufacture of milling machines. It was incorporated in 1905 and produced its first machine in 1906. It later manufactured other models of the original type. In 1935 petitioner became convinced that its machines were outmoded and proceeded, through its officers, to create, design, and manufacture a new type of miller calculated to perform functions greater in extent and different in character from those performed by the old machines. During the period from 1936 to 1940, inclusive, large sums were spent in experimenting with and developing the new model, which…
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The single issue is whether or not the petitioner is entitled to relief under the provisions of section 721, Internal Revenue Code.1
The petitioner contends that its income derived in 1940 from the sale of Nos. 20, 30, and 40 Knight milling machines should be decreased by excluding therefrom the portion of the net abnormal income attributable to the period from 1936 to 1939, inclusive, by reason of the expenses incurred and disbursed in the “development of tangible property” (namely, the machines) during that period. The respondent asserts that the section is not…
2Cases cited2 opinions
- W. B. Davis & Son, Inc. v. CommissionerUnited States Tax Court · 1945
- Premier Products Co. v. CommissionerUnited States Tax Court · 1943
3Cited by49 opinions
- Avey Drilling Machine Co. v. CommissionerUnited States Tax Court · 1951
- Soabar Co. v. CommissionerUnited States Tax Court · 1946
- William M. Bailey Co. v. CommissionerUnited States Tax Court · 1950
- Keystone Brass Works v. CommissionerUnited States Tax Court · 1949
- Pantasote Leather Co. v. CommissionerUnited States Tax Court · 1949
44 more not listed; retrieve them via the Exa API.