U.S. Court of Appeals for the D.C. Circuit, 1949

United Cigar-Whelan Stores Corp. v. District of Columbia

U.S. Court of Appeals for the D.C. Circuit · Decided September 12, 1949 · Edgerton

176 F.2d 952; 85 U.S. App. D.C. 301 (Federal Reporter, Second Series)

Counsel

Mr. Richard J. Roche, of tíi'e Bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Messrs. Chapin B. Bauman and John H. Burnett, Washington, D. C., were on the brief, for petitioner., Mr. Harry L. Walker, Assistant Corporation Counsel, Washington, D. C., with whom Messrs. Vernon E. West, Corporation Counsel, and Chester H. Gray, Principal Assistant Corporation -Counsel, Washington, D. C., were on the brief, for respondent.

Cases that cite this one

2 later published cases cite this decision.

Commissioner of Internal Revenue v. Golonsky. Commissioner of Internal Revenue v. Gold (3d Cir. 1952)
Golonsky v. Commissioner (United States Tax Court 1951)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion of the Court

EDGERTON, Circuit Judge.

For $30,000 paid 'by its lessors, petitioner as lessee consented to cancel a lease that had some years to run. The disputed question -is whether the cancellation was a “sale or exchange”. Gain ¡from sale or exchange of a capital asset is exempt from the District of Columbia income tax. 53 Stat. 1091, D.C.Code(1940) § 47 — 1506.

We agree with the Board of Tax Appeals that there was no -sale or exchange and petitioner’s gain was taxable. A lease that is cancelled is not transferred but terminated. Termination or destruction is not sale or exchange. Cf. Hale v. Helvering, 66 App.D.C. 242, 85 F.2d 819. It may be argued that petitioner parted with certain rights and privileges and that, in substance if not in form, these passed to the lessor. But such analysis has little or no bearing on the issue, since the meaning of words is not a matter of logic but of usage. No usage that we know of calls cancellation of a lease a sale or exchange.

Affirmed.

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