Court Opinion

ID: 4474285
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:52.117161+00
Date Added: 2024-06-11T15:04:26.163862
License: Public Domain

Turner, J., dissenting: The facts found, in my opinion, not only fail to justify any conclusion that the respondent’s determination of excessive profits was erroneous, but, when most charitably viewed, indicate that the petitioner, due to the defects in its accounting system, has found it impossible to give an informative picture of its business as between that which is subject to renegotiation and that which is not. The findings upon which the conclusion of the majority is based appear to me to be contradictory. First, it is shown that the accounts of the petitioner as between departments are kept, not with any real effort at exactness, but are based on estimates, “test costs,” or “spot check costs.” There is then a finding that prices credited to the primary department “during the period here involved” for the products transferred to the secondary department were set by the Office of Price Administration. It is then found that the parties are not in disagreement as to the figures shown by the books, which figures are then set forth, disclosing a substantial loss in the primary department and very substantial profits in the secondary department. Next, it is shown that in 1944, the year here in question, the departmental accounts showed profits in some places and losses in others and that the individual departments were credited or charged “with the estimated market prices” of the products transferred between the departments for further processing, without attempting to show initial costs or other exact facts through the consecutive steps of the operation up to the sale. After the making of the specific finding as to 1944, just referred to, that year being the year in question, the facts next jump back to a statement that from 1943 to 1945 the OPA fixed maximum market prices for meat packers’ products, which, in some instances, did not permit the petitioner to recover the total costs of livestock and processing expenses which went into its products. After these contradictory findings, it is then reasoned that part of the loss, shown by petitioner’s books as having been sustained by the primary department, should be allocated to the secondary department, thereby reducing the excessive profits below that shown as determined by the respondent in its unilateral order. There is no attempt at showing the costs of the respective departments, and the Court is accordingly in the dark as to the facts, if any there be, upon which to base a conclusion as to what part, if any, of the primary department costs may properly be applied to reduce the amount of excessive profits determined by the respondent. As I read the case, the petitioner has shown that its books of accounts as between the departments are of no probative force, and it thinks, but has not shown, that some of the profits of the secondary department should be allocated to nonrenego-tiable business. In short, petitioner has come before the Tax Court and confessed its inability to prove its case. In that situation, the respondent’s determination should not be disturbed. Accordingly, I note my dissent. Disney, J., agrees with this dissent.