Ambrose v. Commissioner

Oppek, J.,

dissenting: It would be hard enough to unearth any distinction from the principle of Ken-Rad Transmitting Tube Corporation, 10 T. C. 1217, if the present facts were much more at variance than they are. But in reality, even the facts are almost identical. In both facilities were bought in 1943 and disposed of in 1945. In each the year 1945 is not involved, but 1943 is in issue. In both the transfer in 1945 was prior to the close of the emergency and in each the effort was made to reopen 1943, further accelerate amortization, and recover full cost oyer a life shortened to conform to the end of the emergency even though the taxpayer no longer owned the property at that time. In Ken-Rad we said no but here we say yes.

■ The fact that in our prior case there was a tax-free liquidation in 1943 with an accompanying intercompany transfer, certainly constitutes no discernible distinction for at least three reasons. First, the Ken-Rad opinion points out that both the right to accelerated amortization and to a carry-over basis accompanied the transfer, so that taxwise it was comparable to a single ownership. Second, the same reasons given there for relying on the legislative purpose exist here, namely, that the intention was to assure the recovery of cost1 which was bound to result in both cases, not a windfall tax refund. And third, because petitioner cannot here, any more than in Ken-Rad, conform to the technical, requirements of the statute.

Congress has plainly said of the Presidential proclamation terminating the emergency: * * In such case the amortization period with respect to such facility shall end with the end of such month in lieu of the sixty-month period.” Sec. 124 (d) (1), Internal Revenue Code. (Emphasis added.) Petitioner cannot end its amortization period with the end of September 1945, as it now freely admits, because it did not then own the facility. Since it cannot bring itself within the express language and underlying purpose of the statute, see United States v. Ludey, 274 U. S. 295, I think its claim should be denied as it was in the Ken-Rad case.

YaN FossaN, TURNER, and Raum, //., agree with this dissent.

“Senator George. The whole theory being that they are entitled to get back their cost for a* facility constructed primarily and exclusively for national-defense purposes?

“Mr. Sullivan. That is correct, Senator George.” Hearings before the Senate Committee on Finance on the Second Revenue Act of 1940, 76th Cong., 3d Sess., p. 128.