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JARECKI V. G. D. SEARLE & CO., 367 U. S. 303 (1961)

U.S. Supreme Court

Jarecki v. G. D. Searle & Co., 367 U.S. 303 (1961)

Jarecki v. G. D. Searle & Co.

No. 151

Argued March 21, 1961

Decided June 12, 1961*

367 U.S. 303


1. Development of new products is not "discovery" within the meaning of § 456(a)(2)(B) of the Internal Revenue Code of 1939, as amended, and income resulting from the manufacture and sale of certain patented drugs, cameras, camera equipment, and stereo products resulting from inventions is not included within the statutory definition of "abnormal income," in § 456(a), so as to qualify for Korean War excess profits tax relief under the Excess Profits Tax Act of 1950. Pp. 367 U. S. 304-313.

2. Such income is not made eligible for Korean War excess profits tax relief by the concluding sentence of paragraph (2) of § 456(a), which provides that

"The classification of income of any class not described in subparagraphs (A) to (D), inclusive, shall be subject to regulations prescribed by the Secretary."

Pp. 367 U. S. 313-315.

274 F.2d 129 reversed.

278 F.2d 148 affirmed.

Page 367 U. S. 304

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