No. 20, Docket 20234.Circuit Court of Appeals, Second Circuit.
March 27, 1947.
Petition to Review a Decision of the Tax Court of the United States.
Petition by 1432 Broadway Corporation to review a decision of the Tax Court of the United States, 4 T.C. 1158, redetermining deficiencies in income tax, declared value excess profits tax and excess profits tax for the years 1939, 1940 and 1941 imposed by the Commissioner of Internal Revenue.
Charles Korn, of New York City (Jacob Rabkin and Mark H. Johnson, both of New York City, of counsel), for petitioner.
Sewall Key, Acting Asst. Atty. Gen., Lee A. Jackson and Louise Foster, Sp. Assts. to the Atty. Gen., for respondent.
Before SWAN, CHASE, and FRANK, Circuit Judges.
The facts are stated in the opinion of the Tax Court, 4 T.C. 1158, and need not be here repeated. The issue presented was whether the taxpayer was entitled under section 23(b) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 23(b), to deduct interest accrued within the taxable years on its outstanding debentures. The Tax Court denied deduction on the ground that the evidence did not show that “the debentures were, or were intended to be, evidences of indebtedness”; they were “more nearly like preferred stock than indebtedness.” These conclusions are not within the scope of our judicial review. John Kelley Co. v. Commissioner, 326 U.S. 521, 698, 66 S.Ct. 299; Elliott-Lewis Co. v. Commissioner, 3 Cir., 154 F.2d 292. We may add, however, that, if the question were open to us, we should reach the same result as did the Tax Court.