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Helvering v. Sabine Transportation Co., 318 U.S. 306 (1943)

Helvering v. Sabine Transportation Co.

No. 518

Argued February 4, 1943

Decided March 1, 1943

318 U.S. 306


1. In 1937, a corporation paid dividends partly in its own promissory notes. Pursuant to § 27(d) of the Revenue Act of 1936, it claimed and was allowed, in respect of its liability for undistributed profits tax, the face amount of the notes as part of its "dividends paid credit." In 1938, it retired the notes by payment of their face amount.

Held: that the amounts thus paid in retiring the notes were includible in the "dividends paid credit" under § 24(a)(4) of the Revenue Act of 1938, as "amounts used . . . to pay or to retire indebtedness of any kind." P. 318 U. S. 310.

Section 27(e) of the Revenue Act of 1938 does not limit or qualify § 27(a)(4).

2. To the extent that Art. 27(a)-3 of Treasury Regulations 101 forbid (as a "double credit") the credit claimed in this case, it is inconsistent with the plain terms of the Act, and invalid. P. 318 U. S. 311.

128 F.2d 945 affirmed.

Page 318 U. S. 307

Certiorari, 317 U.S. 620, to review the reversal of a decision of the Board of Tax Appeals sustaining an order of the Commissioner disallowing a credit in the computation of respondent's tax under the Revenue Act of 1938.

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