Court Opinion

ID: 9418466
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:26:37.645455+00
Date Added: 2024-06-11T17:22:03.384316
License: Public Domain

Mr. Justice McReynolds,
dissenting.
In the course of its opinion, citing Eisner v. Macomber, 252 U. S. 189, 213, the Court of Claims declared:
“ We think' the whole transaction is to be regarded as merely a financial reorganization of the business of the company and that this view is justified by the power and duty of the court to look through the form of the trans*176action to its substance.” And further, “ It seems incredible that Congress intended to tax as income a business transaction which admittedly produced no gain, no profit, and hence no income. If any income had accrued to the plaintiff by reason of the sale and exchange made it would doubtless be taxable.”
There were perfectly good reasons'for the reorganization and the good faith of the parties is not questioned. I assume that the statute was not intended to put an embargo upon legitimate reorganizations when , deemed essential for carrying on important enterprises. Eisner v. Macomber was rightly decided and the principle which I think it announced seems in conflict with the decision just announced.
Mr. Justice Van Devanter concurs in this dissent.