Protest of Pentecost & Hodges, Inc.

This is a proceeding to review an order of the Oklahoma Tax Commission assessing additional income tax against Pentecost & Hodges, Incorporated, for the years 1933 and 1934.

The appealing taxpayer was engaged in the business of drilling oil and gas wells. In the year 1932.it entered into four separate contracts with different producers whereby it agreed in each case to drill and complete a well for a stipulated consideration to be paid only out of the proceeds of a certain percentage of the oil as the same was produced. The total amount thus to be received by the taxpayer for its services was…