H & H Drilling Co. v. Commissioner
United States Tax Court
Petitioner issued its check, for salary, to its principal stockholder (not an officer) who held more than 50 per cent of its stock. He endorsed it the same day and it was immediately deposited by petitioner in its bank account. The stockholder's account on petitioner's books was first charged, then credited, with the amount of the check. Petitioner is not shown to have had money to cover the check.
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Petitioner issued its check, for salary, to its principal stockholder (not an officer) who held more than 50 per cent of its stock. He endorsed it the same day and it was immediately deposited by petitioner in its bank account. The stockholder's account on petitioner's books was first charged, then credited, with the amount of the check. Petitioner is not shown to have had money to cover the check. Held, neither actual nor constructive payment was proven and no error is shown by the Commissioner in denying deduction under section 24 (c) of the Internal Revenue Code.
1Opinion of the Court
OPINION.
Disney, Judge:
The petitioner had the burden of showing the inapplicability of the three conditions set out in section 24 (c) of the Internal Revenue Code.1 All three conditions of the statute must co-exist to the application of the provision. Michael Flynn Mfg. Co., 3 T. C. 932; Akron Welding & Spring Co., 10 T. C. 715.
Apparently because the record shows that Ptak owned more than 50 per cent of the petitioner’s stock (within section 24 (b), I. R. C.), and because there is no showing as to whether he was on a cash or accrual basis of accounting, the petitioner makes no contention with…
2Cases cited4 opinions
- Michael Flynn Mfg. Co. v. CommissionerUnited States Tax Court · 1944
- Ohio Battery & Ignition Co. v. CommissionerUnited States Tax Court · 1945
- P. G. Lake, Inc. v. CommissionerUnited States Tax Court · 1944
- Akron Welding & Spring Co. v. CommissionerUnited States Tax Court · 1948
3Cited by6 opinions
- Jerome Castree Interiors, Inc. v. CommissionerUnited States Tax Court · 1975
- H & H Drilling Co. v. CommissionerUnited States Tax Court · 1950
- Jerome Castree Interiors, Inc. v. CommissionerUnited States Tax Court · 1975
- Lombard & Co. v. CommissionerUnited States Tax Court · 1979
- O'Connor v. Comm'rUnited States Tax Court · 1954
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