Court Opinion

ID: 6365256
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:40:06.233927+00
Date Added: 2024-06-11T15:49:49.063687
License: Public Domain

Dissenting Opinion by
Judge Wilkinson, Jr. :
I must respectfully dissent. Dividends may take many forms and be called by many names, but in my opinion, a dividend is a return on an investment and not, as here, a return on doing a volume of business. In Commonwealth v. General Refractories Co., 417 Pa. 153, 155, 207 A.2d 833, 834 (1965) Justice Cohen so indicates when he points out that there the dividend took the peculiar form it did because of the restrictions placed on currency in Austria and the ar*579rangement there made was necessary so that General Refractories Company “could obtain a return on its investment. ...”
The distribution here at issue, denominated a patronage dividend, was in no way a return on investment. Another stockholder, of the same class and with identical investment, might have received more, less, or nothing. In my opinion this was not a dividend, paid out of earnings or other profits but purely and simply a rebate. Indeed, heretofore this is exactly how this taxpayer treated these payments for this is the first time the receipts had been claimed as a dividend deduction. Stipulation of fact 23 provides: “Petitioner did not in the instant year, nor has it in any other year, claimed a ‘dividends received deduction’ for monies received from Cotter and Company for federal income tax purposes.”
I dissent.
Judge Rogers and Judge DiSalle join in this dissent.