Chicago, Rock Island & Pacific Railway Co. v. Commissioner

*1021OPINION.

Milliken :

The facts of these proceedings were either stipulated or consist of admissions made by respondent in his pleadings.

These proceedings inyolve two distinct classes of issues: those which relate to taxable income, and those which relate to invested capital. We will first dispose of the issues relating to taxable income.

Issue 1. Respondent refused to permit petitioner to deduct from gross income amounts paid by it to the United States as penalties for the violation of certain Federal statutes which are referred to in the findings of fact. This question was before us in Great…