Atlas Supply Co. v. Commissioner

BRATTON, Circuit Judge.

We are asked to determine whether under the Revenue Act of 1936, 49 Stat. 1648, 26 U.S.C.A. Int.Rev.Acts, page 813 et seq., a corporation was entitled to credit for current income not distributed because a provision in its bylaws prohibited the declaration of a dividend which would impair its capital.

Petitioner is a corporation organized under the laws of Oklahoma. Article 5 of its bylaws, continuously in effect since 1909, provides that dividends shall be declared only from surplus profits, and that no dividend shall be declared which will impair its capital. On…