Court Opinion

ID: 9450189
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:37:52.751627+00
Date Added: 2024-06-11T17:32:11.305149
License: Public Domain

WATERMAN, Circuit Judge
(dissenting) :
I would affirm the district court on the opinion below, 215 F.Supp. 356 (1963) and I therefore respectfully dissent from the order of my brothers directing that court to enter summary judgment in favor of the government.
In a case involving the liability of a taxpayer to pay an income tax it seems a rather strange doctrine that neither the Code nor the regulations are disposifive of the issue of the extent or character of that liability. The court below,in its most careful exposition, first set forth the pertinent statute, 26 U.S.C. §: 167(a) authorizing the depreciation deduction, “including a reasonable allowance for obsolescence,” then the regulation § 1.167(a)-l stating how this allowance is permitted to be set aside during the useful life of the asset being depreciated provided the asset is not depreciated below a reasonable salvage value, and then the regulation § 1.167 (a)-1(c) defining “salvage value.” After quoting these the judge then held, as it seems obvious to me in view of the government’s concessions1 he was required to hold, that the language of the Code and the regulations permitted this good-faith taxpayer to do precisely what it did do.
I am heartened by the fact that Judge Moore in his dissenting opinion in Fri-bourg Navigation Co. v. Commissioner, decided this day, joins me in questioning the result my brothers have reached here, and I adopt his reasoning in that case to the extent that his well-considered analysis of the issue in Fribourg is applicable to Motorlease.

. There was no issue of a taxpayer’s fraud or evasion in this ease — simply an issue of how an income tax statute and the regulations of the Commissioner pursuant to that statute should be read.
The court below, 215 F.Supp. at 365, makes this very clear:
“In open court, at the time of the hearing on these motions, the government admitted that the plaintiff’s estimate of useful life was reasonable, that its estimate of salvage value was reasonable, and that its method of computing its depreciation was proper. It does not make any claim that the method of depreciation used by the taxpayer was improper or that there was any unreasonable, mistaken or improper use of any element in the method adopted by the taxpayer.”