Court Opinion

ID: 6876557
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:08:37.325297+00
Date Added: 2024-06-11T16:05:30.441014
License: Public Domain

L. HAND, Circuit Judge
(dissenting).
The parties originally presented to us only the question covered by the regulation: i. e. whether, when a company buys its own stock “and holds it as treasury stock, the sale of such stock will be considered as a capital transaction”. They meant us to decide only that, and we decided it, and the Supreme Court has now affirmed our ruling in another case. However, it occurred to us that conceivably 'there might be a tax, based upon the difference between the value of the shares at the time of their reissue, and the price then received. I wished at that time not to decide that question, but to give the commissioner leave to apply to the Board for permission to raise it, if he thought it *683worth while. It was not before us, not only because it had not been argued, but because neither the pleadings, nor the evidence, contained a syllable about the value of the shares. Nevertheless, a majority of the court decided that such a tax was assessable. Thereupon, the taxpayer very naturally complained that it had not had its day in court, as it certainly had not. We have now reheard the case — necessarily before another court because of Judge Manton’s resignation — and the point has been argued, though for the most part the argument was directed to whether we could decide it on this record. I do not deny that we need not prolong a litigation when it is apparent that a position, which one party wishes to take but has not, • is wholly without merit. Here we are not obliged, of course, to let the commissioner waste the Board’s time in fruitless controversy. But I do not regard this question as beyond possible debate, and I would avoid deciding it until I knew that it was not moot. On this record it is — absolutely. Moreover, I think it should be more adequately presented than it. has been in the briefs, which are all I have had. For this reason I wortld do exactly what I wanted to do before: send the cause back with leave to the commissioner to apply for permission to amend his answer and set up the defence. I do not therefore join in the ruling made, though I dissent from it as little as I dissented from its exact contrary.