Wah Chang Smelting & R. Co. v. Commissioner
United States Tax Court
Petitioner, which was a refiner of metals, decided to construct and install a hydrogen-producing facility for use in its general plant. The process for producing hydrogen was well established; and the problem was to build a facility which would adapt such process to petitioner's individual needs. After the facility had been designed, constructed, and put into operation, it did not produce hydrogen in sufficient quantity or of the desired quality.
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Petitioner, which was a refiner of metals, decided to construct and install a hydrogen-producing facility for use in its general plant. The process for producing hydrogen was well established; and the problem was to build a facility which would adapt such process to petitioner's individual needs. After the facility had been designed, constructed, and put into operation, it did not produce hydrogen in sufficient quantity or of the desired quality. Certain remedial changes and eliminations were then made, so as to correct the defects in the original plan and to enable the facility to function…
1Opinion of the Court
Pierce, Judge:
An income tax deficiency of $18,488.75 for the calendar year 1952 was determined against the petitioner by the respondent.
The sole issue for decision is: Where petitioner constructed and installed a hydrogen-producing facility for its ore-reducing plant, which facility when operated proved to be inefficient and had to be changed in some respects through reconstruction, may that portion of its construction and installment costs prior to the reconstruction, which is allocable to expenditures for labor and materials in respect of certain piping and fittings that were torn out and…
2Cases cited1 opinion
- In re BerlinCourt of Appeals for the Third Circuit · 1945
3Cited by4 opinions
- Haspel v. CommissionerUnited States Tax Court · 1974
- Clayton v. CommissionerUnited States Tax Court · 1981
- Haspel v. CommissionerUnited States Tax Court · 1974
- Wah Chang Smelting & R. Co. v. CommissionerUnited States Tax Court · 1958