Chelsea Products, Inc. v. Commissioner
United States Tax Court
Petitioner is a manufacturing company which manufactures fans and blowers and for several years sold its products through its own officers and "manufacturers' agents." In 1944, three sales companies were organized to sell petitioner's products and were assigned separate territories. The stockholders of these sales companies were essentially the same as the stockholders of petitioner.
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Petitioner is a manufacturing company which manufactures fans and blowers and for several years sold its products through its own officers and "manufacturers' agents." In 1944, three sales companies were organized to sell petitioner's products and were assigned separate territories. The stockholders of these sales companies were essentially the same as the stockholders of petitioner. Thereafter these sales companies acted as sales agents for petitioner and their income was derived from sales of petitioner's products. Each of these sales companies filed its own income and declared value…
1DissentOpper, J.
The core of the present question is whether a reallocation of income is necessary under section 45, Internal Revenue Code, to prevent distortion of petitioner’s income. See Hearst Corp., 14 T. C. 575. Since no arm’s length bargaining occurred between these commonly controlled entities, see Helvering v. U. S. Industrial Alcohol Co. (W. Va.), (C. A. 2), 137 F. 2d 511; Eskimo Pie Corp., 4 T. C. 669 affd. (C. A. 3), 153 F. 2d 301, our concern must be whether petitioner received from the sales companies fair value for its products. If not, distortion of income resulted. G. U. R. Co., 41 B. T. A.…
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- Higgins v. SmithSupreme Court of the United States · 1940
- National Securities Corp. v. Com'r of Internal RevenueCourt of Appeals for the Third Circuit · 1943
- GUR Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1941
- United States Industrial Alcohol Co. v. HelveringCourt of Appeals for the Second Circuit · 1943
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