Tampa Elec. Co. v. Commissioner

Sternhagen,

dissenting: As I stated in dissenting from the opinion of the Board in Liberty Light & Power Co., 4 B. T. A. 155, I am of opinion that the amounts, which in this case appear to have been steadily received in the ordinary course of business from persons in outlying districts requiring service, were within the petitioner’s ordinary income as provided by the broad terms of section 233 of the Revenue Acts of 1918, 1921, and 1924. I, therefore, think that the deficiency for 1920 on this account was proper and its effect must be carried into the computation of invested capital for 1921. Furthermore, it seems to me clear that the amounts received for making *1009extensions were within the corporation’s earned surplus and, hence, a proper part of its statutory invested capital. The only possible theory I can think of upon which these amounts could be excluded from earned surplus would be the theory that they were gifts made by the numerous persons who desired service, and this theory seems to me to be so patently unsound as to require immediate rejection. The money was not donated but was paid to the company under ordinary business contracts, and until there is stronger authority than a supposed analogy to the subsidy considered in the Cuba Railroad case, I must continue to regard it as income which may, under permissible circumstances, become earned surplus.

MaRqhette and Muedock concur in the dissent.