Southport Mill v. Commissioner of Internal Revenue

BRYAN, Circuit Judge.

This is a petition for review of a decision by the United States Board of Tax Appeals, which held petitioner liable for deficiencies in income and excess profit taxes for the fiscal years ending on May 31 in 1918 and 1919. That decision excluded from invested capital two amounts, one of $100,000 and the other of $197,500, and classified those amounts as borrowed capital. The Revenue Act of 1918, in force during the period involved, by section 326 (Comp. St. § 6336%oi) includes as invested capital paid-in surplus, but excludes borrowed capital. Petitioner insists that each…