Court Opinion

ID: 8800964
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:31:22.484741+00
Date Added: 2024-06-11T17:03:54.102757
License: Public Domain

VAN FLEET, District Judge.
The question presented by the application of the receivers herein for instructions of the court is whether the fund in the hands of the receivers, represented by the net proceeds in conducting the operations of the road while in their hands over and above the expense and authorized expenditures paid out by them, is subject to tax under the federal Income Tax Act as net earnings of the corporation, and as such required to be returned by them to the Collector of Internal Revenue of this district for the purposes of such tax.
I am of opinion that the facts bring the case within the principles of Pennsylvania Steel Co. v. New York City Railway Co., 198 Fed. 775, 117 C. C. A. 556; and upon the authority of that case it is held that such fund is not subject to the tax.
The receivers will be governed accordingly, and an appropriate order to that end/ may be prepared by the attorney for the receivers and entered herein.