Avey Drilling Machine Co. v. Commissioner
United States Tax Court
1. Petitioner filed applications for relief under sections 722 (a) and 722 (b) (1), (2), (3) (A), and ( 4) of the Internal Revenue Code from excess profits taxes for the years 1940, 1941, and 1942. Petitioner's excess profits credits were computed on the invested capital method.
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1. Petitioner filed applications for relief under sections 722 (a) and 722 (b) (1), (2), (3) (A), and ( 4) of the Internal Revenue Code from excess profits taxes for the years 1940, 1941, and 1942. Petitioner's excess profits credits were computed on the invested capital method. Held, petitioner has not shown that its profits cycle differed materially in length and amplitude from the general business cycle or that it changed the character of its business during or immediately prior to the base period; hence, petitioner is not entitled to relief under subsections (b) (3) (A) or (b) (4). 2.…
1Opinion of the Court
OPINION.
Rice, Judge:
Petitioner seeks relief under section 722 of the Internal Revenue Code1 on the ground that its excess profits taxes for 1940, 1941, and 1942 are excessive and discriminatory by reason of conditions or circumstances within subparagraphs (1), (2), (3) (A), and (4) of section 722 (b), and asserts that a fair and just amount representing normal earnings, to be used as a constructive average base period net-income, is $136,800.
Petitioner is entitled to use the average earnings method of computing its excess profits credit. Its base period is the calendar years 1936 to 1939,…
2Cases cited6 opinions
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