Court Opinion

ID: 8815588
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:17:24.348873+00
Date Added: 2024-06-11T17:04:27.419806
License: Public Domain

On Petition for Rehearing.
PER CURIAM.
The application for rehearing points out that, in some of the cases cited in the opinion, allowance or credit for materials *506exhausted was sought or allowed on the ground that they represented, not income at all, but capital assets consumed, and that the opinion erroneously refers to some of these as if they all involved “depreciation.” The correction of whatever inaccuracy there is in the opinion in this respect does not affect our conclusion. In the Biwabik Case, the lessee was not heard to say that his capital assets had been consumed by his mining operations, and we interpret that decision as resting in an essential degree on the idea that the nature of the lessee’s title forbade him to make this claim. We cannot read the decisions of the Supreme Court as having determined that the exhaustion of ore reserves is so inherently a business loss, rather than an impairment of capital, that a statutory grant of the right to deduct for depletion on that account will reach a case which has been adjudged not to involve the diminution of capital assets. We think the substantial principles established by the decisions are that both the royalty received by the fee owner and the sums received by the operating lessee above the cost of operation are income; that the statutory reduction for “depletion” cannot be twice credited, once to tire fee owner, and once to the lessee; and that the exemption belongs of right to the fee owner.
The application for rehearing- must be denied, but the opinion will be refiled, with corrections in the matter indicated.