N. v. Koninklijke Hollandische Lloyd v. Commissioner
United States Board of Tax Appeals
In 1917 the steamship Zeelandia, owned by the petitioner, enroute from South America to various ports of The Netherlands, entered New York Harbor to discharge passengers and mail, was refused clearance papers by the United States, and was illegally detained for some months. By act of Congress the petitioner was empowered to sue the United States for damages in the Court of Claims, which rendered judgment in its favor for $446,825.22, with interest.
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In 1917 the steamship Zeelandia, owned by the petitioner, enroute from South America to various ports of The Netherlands, entered New York Harbor to discharge passengers and mail, was refused clearance papers by the United States, and was illegally detained for some months. By act of Congress the petitioner was empowered to sue the United States for damages in the Court of Claims, which rendered judgment in its favor for $446,825.22, with interest. Held, that no portion of such judgment or interest paid in 1932 constitutes taxable income to the petitioner.
1Opinion of the Court
OPINION.
Van Fossan :
This proceeding was brought to redetermine a deficiency in the income tax of the petitioner for the year 1932 in the sum of $49,749.83, together with a penalty of $12,437.46 for delinquency.
The sole issue is whether or not moneys received by the petitioner, a foreign corporation, in payment of a judgment in its favor against the United States as the result of a suit in the Court of Claims for damages for the illegal detention of the petitioner’s steamship during the War, constituted income from sources within the United States and, as such, was subject to tax.
The…
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