Green Bay & Western Railroad v. Commissioner

OPINION.

Black, Judge:

We have but one issue to decide in this proceeding, and that is whether the disbursements made by petitioner Green Bay & Western Railroad Co. in the taxable years 1937 and 1939 on its class A and class B debentures represented interest paid on indebtedness which it owed to the holders of these debentures and therefore were deductible under section 23 (b) of the applicable revenue acts, or whether these disbursements were, as the Commissioner contends, in the nature of dividends paid to the holders of these debentures who were not creditors of the corporation but whose…