Thew Shovel Co. v. Commissioner
United States Board of Tax Appeals
CREDIT - CONTRACTS RESTRICTING DIVIDENDS. - In correspondence between petitioner and a bank from which it obtained a loan, petitioner stated that it would be its "policy" to take no action with respect to the payment of dividends without fully discussing the situation with the bank "and ascertaining that any action proposed is not considered unjustifiable."
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CREDIT - CONTRACTS RESTRICTING DIVIDENDS. - In correspondence between petitioner and a bank from which it obtained a loan, petitioner stated that it would be its "policy" to take no action with respect to the payment of dividends without fully discussing the situation with the bank "and ascertaining that any action proposed is not considered unjustifiable." During the taxable year the petitioner requested and received the bank's consent to the distribution of a portion of its earnings as dividends. Held, under the facts shown the amount distributable as dividends during the taxable year under…
1Opinion of the Court
OPINION.
Turner :
The respondent determined a deficiency in income tax for the year 1936 in the amount of $49,529.66. Petitioner claims an overpayment of income tax in the amount of $1,518.67. The question presented is whether, in computing the surtax on undistributed profits imposed under section 14 of the Revenue Act of 1936, petitioner is entitled, under section 26 (c) (1) of the Revenue Act of 1936, on account of a contract restricting the payment of dividends, to a credit against its adjusted net income. The parties have filed a written stipulation of facts with certain exhibits attached…
2Cited by4 opinions
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- Thew Shovel Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Thew Shovel Co. v. CommissionerCourt of Appeals for the Sixth Circuit · 1943