Opinion
No. 207.
March 7, 1932.
Appeal from the District Court of the United States for the Southern District of New York.
Action by the United Dyewood Corporation against Frank Collis Bowers, executor of Frank K. Bowers, deceased, former Collector of Internal Revenue. From a judgment in favor of the plaintiff [ 44 F.2d 399], the defendant appeals.
Affirmed.
George Z. Medalie, U.S. Atty., of New York City (Leon E. Spencer, Asst. U.S. Atty., of New York City, of counsel), for appellant.
Kirlin, Campbell, Hickox, Keating McGrann, of New York City (Charles T. Cowenhoven, Jr., and H. Maurice Fridlund, both of New York City, of counsel), for appellee.
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
The question involved in this case is as to the meaning of section 240(c) of the Revenue Act of 1918 (40 Stat. 1081), in particular as to that part of it which reads: "Which the amount of any dividends * * * received by such domestic corporation from such foreign corporation during the taxable year bears to the total taxable income of such foreign corporation upon or with respect to which such taxes were paid." It seems to us entirely clear, for the reasons well stated by the District Judge, that of this phrase the words, "the total taxable income * * * upon * * * which such taxes were paid," mean the sum used by the foreign government as a base to compute the foreign tax. We cannot conceive on what theory this amount is to be added to another, used for the computation of another tax, and that the sum of the two is to be taken as the total foreign income, with which the dividends received by the domestic company are to be compared.
The decision of the District Court concerned other matters than this point, but, so far as it decided the question now on appeal, we accept the discussion as our own.
The judgment is affirmed.