Davis, Collector of Internal Revenue v. Penfield

HUTCHESON, Chief Judge.

The commissioner having assessed, and the plaintiff having paid the collector, a deficiency assessment of $17,223.62, plaintiff brought this suit to recover that sum as erroneously and illegally assessed and collected.

The primary claim was that the receipt by taxpayer of Gulf States Debentures pursuant to a plan for the recapitalization of that company whereby the entire 25,000 shares of previously outstanding $100 par preferred stock (including taxpayers 208 shares) were exchanged for its new debentures, gave rise to a non recognized gain, the taxation of which was…