Central Bag Co. v. Commissioner
United States Tax Court
Prior to 1937 petitioner operated a used bag business. In or about May 1937, petitioner expanded the business to include the manufacture and sale of new bags. Since petitioner operated on a fiscal year basis ending September 30, the expansion of its business occurred during its first base period year.
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Prior to 1937 petitioner operated a used bag business. In or about May 1937, petitioner expanded the business to include the manufacture and sale of new bags. Since petitioner operated on a fiscal year basis ending September 30, the expansion of its business occurred during its first base period year. Because of difficulties encountered primarily in developing its new bag business, petitioner seeks relief under section 722 (b) (4), Internal Revenue Code of 1939. Held, petitioner changed the character of its business, but failed to establish a fair and just amount representing normal earnings…
1Opinion of the Court
OPINION.
Habron, Judge:
In this case petitioner’s excess profits tax liability for the taxable years was determined by using an average base period net income of $38,924.48. This amount was computed under section 713(f)(6) and (7), which is the so-called growth formula. This statutory formula increased the excess profits credit petitioner would have otherwise had since its average base period net income, as adjusted by respondent, was $30,394.17.
In its applications for relief and in its petition, the petitioner claimed that it was entitled to $158,989.72 as a fair and just amount representing…
2Cases cited12 opinions
- Lamar Creamery Co. v. CommissionerUnited States Tax Court · 1947
- National Grinding Wheel Co. v. CommissionerUnited States Tax Court · 1947
- Farmers Creamery Co. v. CommissionerUnited States Tax Court · 1952
- Homer Laughlin China Co. v. CommissionerUnited States Tax Court · 1946
- Stimson Mill Co. v. CommissionerUnited States Tax Court · 1946
7 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Central Bag Co. v. CommissionerUnited States Tax Court · 1956