United States Board of Tax Appeals, 1930

Brown-Crummer Co. v. Commissioner

United States Board of Tax Appeals · Decided April 28, 1930 · Lansdon, Smith, Trammell

19 B.T.A. 750; 1930 BTA LEXIS 2335

Cases that cite this one

1 later published case cites this decision.

Citizens National Bank of Waco v. United States (Court of Claims 1977)

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Opinion

BROWN-CRUMMER CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Brown-Crummer Co. v. Commissioner

Docket No. 25867.

United States Board of Tax Appeals

19 B.T.A. 750; 1930 BTA LEXIS 2335;

April 28, 1930, Promulgated

*2335 Held, under the facts shown, proceeds received by the petitioner from coupons clipped from municipal bonds held in pledge by a bank to secure loans, are tax-exempt income to it.

Ray G. Ransom, Esq., for the petitioner.

P. M. Clark, Esq., for the respondent.

LANSDON

*750 OPINION.

LANSDON: The respondent asserted deficiencies in income taxes against the petitioner for the calendar years 1922 and 1924, in the respective amounts of $5,927.70 and $9,922.29, from which this appeal is prosecuted. The error alleged is that the respondent wrongfully increased the petitioner's taxable income for the years by the amount of receipts derived by it from tax-exempt bonds, which it sold to and later repurchased from the First National Bank in Wichita, Kans., *751 in accordance with certain repurchase agreements entered into at the date of sale. The reasons assigned by the respondent for his denial of the petitioner's claims for deduction of the amounts in controversy are contained in a statement enclosed with his deficiency letter to petitioner, under date of February 8, 1927, reading as follows:

1. Net income has been increased by interest*2336 on municipal bonds deposited with First National Bank of Wichita under "repurchase agreements", inasmuch as the First National Bank is also claiming certain interest payments which they contend are merely a reimbursement to them of the interest on the bonds. There cannot be two tax-exempt items of income arising from the same bonds.

* * *

At the hearing of this case when it was regularly called for trial, it was agreed in open court by the attorneys for the petitioner and respondent that no evidence be introduced, but that the issues herein presented be submitted, considered and decided upon the transcript of the record made in First National Bank in , and be promulgated after or along with the decision in those cases. Inasmuch as the record in First National Bank in , shows that the identical interest payments, here in controversy (therein claimed by that appellant), were not received by it but by this petitioner, it follows that the respondent erred in denying the deductions herein claimed and that this appeal must be sustained.

Reviewed by the Board.

Decision will be*2337 entered under Rule 50.

SMITH and TRAMMELL dissent.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.