Court Opinion

ID: 6855392
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:41:32.689496+00
Date Added: 2024-06-11T16:05:08.920366
License: Public Domain

WALKER, Circuit Judge.
I coneur in the denial of the petitions for rehearing. It does not seem to me that there is a lack of justification for the conclusion that the record shows that the rejection of the claims of the appellants with reference to depletion allowances for the years 1923 and 1924 is sustainable on the ground stated in the opinion heretofore rendered. The eases present no question as to any taxes except additional taxes for the years 1923 and 1924. •One of the grounds on which those additional taxes were challenged was that they should have been reduced by depletion allowances for those years. There was no basis for such allowances in favor of the appellants unless during the years 1923 and 1924 they had an economic interest in the oil in the leased land, a right to share in the oil produced in those years. Palmer v. Bender, 287 U. S. 551, 557, 53 S. Ct. 225, 77 L. Ed. 489. The record distinctly negatives the possession by the appellants in 1923 or 1924 of an interest in the oil remaining in the leased land, in that it shows that what they were entitled to and what they received in 1923 and 1924 was to come, and did come, not from an interest in oil extracted during those years, but from a fund deposited in bank prior to the year 1923. Oil extracted from the leased land in 1923 and 1924 did not contribute to the gross income of appellants during those years. The extraction of oil from that land during those years did not effect a depletion of an oil property in which the appellants then had any interest. The language of the provision (section 214 (a) (10) of the Revenue Act of 1921 [42 Stat. 239]), allowing a deduction from gross income on account of the depletion of an oil property does not indicate that it was contemplated that the taxpayer would have the election to forego his right to an allowance for a depletion of such a property in the year in which the depletion occurred and during which he had an interest in the oil extracted, and to have the amount of such depletion deducted from his gross income in a subsequent year during which he had no interest in that property.