CTA Case No. 1271 (Decision)

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�o: o ,. ,~t;, 19~ , the l iiter 1r l:; tt � i .1 ..,s $$t!.lO:! f r 1 ' ' nd 19)3 1tteludln 1a , m1te4 tax ~C'.reoit ~' ba��� a &tea. :to t9S2 .1 !ht 1 t�� ~-. 12, 195'9. In .b1S tt s � \01 1962� respo at reduced bl$ f 1 51 t ~ 1 .~ s tJtte �t ~ ~ 19Sl, :tnol-a41:na th� l.lndtttd t~ ered1t toto 19!52. 1Ume , eQnt~c:v .7$1t't � . tw~ �tho . m t �c nttll en tb~ 1 ga.Ut.y ot the a. et.ion or cottt.U. items cl ' 94 y �ti .1�on r tt .ndea 1n._, o the� yeU$ 19f1, 19)2 n 19J,!. Wh ob tt: :r dl~tlllov~ ~~J r �d � t. t ~ !Qal" � � llf J. thta 1 terns d!~puted y th rt1 �f5 :d the ar~t~ilnt t:tatetl b1' them tv p r t $ r r sp tv ~o on., ~ �� � ~ ~vtna tna�t ,. a, '"Pit� th~ ft ht fl.Q 1: s-~ e w � ll n4 �_p nd , on b fnnt t J<t ct:p: o -. :er.liiu t � deductlb1l1ty er n~ e ctf.bUt or tn~ tt�rt~s i -� l.v d. ib pe..ltt-1 u in. ag ont .n the ro ~ i � _ ot 1 itt regulat1on~t, 1 al p.rtn. J~S nd oo~wutation or ..s .ntd t>y p titl �� ,. P tt to ~r ' cl~ut d duotio a.tr qw;ttc ~ocordS , .. t U �J .tns; not �nly the- fact Q� p Qnt bntJ sr. th ~ 16 4

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� 12?1 t 19!)1 . ( � r � j. � ' s s � 2; G co v. l.l r tnt. iev., o. 1 l25, pr!l 20, 1961; 1 ~c 980) . Bxp fo or ..41nt nr4fl<: p rty tn b� r"' CUI: t tt p co ltt.on ov r 1 us tul ltfe t oot ap ..: cia ly rol ng its l:1te. H F d . l:&.XG , 11 11�77) . ho of 1r or�� 0.1 c~y or ct l s sin p s r .r t ~1 . e. n ct1 l 5'00,.00 which va &i en U1,t1on tor t a.t1 ba wn~lW'lkv celv c t.in � nt -r t~ � Tho v d&nc sh ti ion r had :t..tl d sub tial c at f wa dama e and the ros dent ot' th eorpo atio � 0 c d th o his h 1 n t s1 r elai i �1 t e Un1 3- 74 � C n r1 ut1o ~ v d uc't1 n. r $~ hie l g ti,ptely repre nt 16 8

n 1t fl 1nJ . r t t bil �' l' 0 !; _� e }-,U.t.1r.. , o.� Xt �� ..:u .. c .;. .. i hut1on s. � l o ~l\ � .L.t u�Ct4bl .. L t..hf }.IJ p ltb ~. .�t ~ # ' � ~ . c . rJ. � o.. e.-.:;os o .. ' :.- l i iui't6 t t .. 00.. 169

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�~~vJ:~;l v t .... (; l.. ~ .b~ ,_, ~ . L:. '71 Pl m1 wi th titi ner �s r , 1 co nc � or p~r t. _ Eo til tU'i ur . ~ eh pa: ~ t we l an indirect dlvi end wh1oh ld not also e l t fe� t it ap ar .n t u~.b.t th t :l.t. w: s in .r y �nt t 111 ll:l4 an 1 t r tor � , n:--..., ve ' in t � t. year . \'!b 1 th audit Oi.' a t � 1 y e pl \.e iB e ti he wn pi n ' l95t:: . t �.s. . � p � ~ J� .>'lt-. } a er aa t., t :C X �.:t.n~.r te t1i"iea in ~ U1a . ne,;AX1 g o1' �.hi case be 'ore tb "" ur . �bat if b . � � �� ;r:I. 'l ) Mi lO t h s 1. :~p e nt& . ma t for ::. ct. � n ' ~ ' 0 tt. b� qu .., t 1 . . . Jifl~ w�� a i ..,(! t.d: ~~!.;U . :!) ~. e ~ l i.-l' . '11 V � t. C."'"1 ' 0 "!... ~toe� oluors �� !1'1� till U.l:'.l. petit ion:~~r ineurred no otfl~c r expEHJ e in 171

Nv. l..::/1 ll . connec , ion w.t h. th~t- p cia~ event . ("'C. s . ll . P� ) ' � 11 a l ' nt t n 1..0 e a cti a <: e-Jt.p n.. at r bu 1 es or itb th rea tla l e p etnt.1on of inin b 11 b ne it (19()5 ~d � 'I ' !-'. J.l , l J) t con ide.r1ng th:tt th Are eeae of 1- is 1.he ri eip 1 toe hol r oJ: P titi ner , hi it or .�uo l r T iv con iuered ceCiucti bl ui:reotly r to t ck � 09 5 t' F .. Taxes , P. 1, 1. ) tJ."i ner incurred. n � otht r .xpense n t sio an n t h!~ ount fo to Ul' f1 t t f r a 'i'h i. , ivin � L ' �te no doubt as 0 1ts d UIJ.C .1 bil1 y - irect. t.in l<... r � ourt ca e t.ttiicial notice t h practice 0 or r.~. 'l.::rolleu by re 4 . to .s r e �v ng n 1 mual Q witb .telit 1 u..s tou.ch 1'or tlla � ivin anct cent 1t ill � - LaO� .. heorse wo it ol' ~0 � ou and ifcd? . JO Wt.l~e e.:xpeuse inc e n he cc r t de h 0 on G b 1 Jl ' tte ti , is Ci a wa preui ent or it on~r cor po- (~. � %� � pp . 4-( . ) y �� expe 1s s n c vn� te n w1 t.b ' c a � a th 1: C't vil:.ie l.C 1 141') ' r-.1

Oi r - emplo;e � e . bi s; t ui p �~ co illi l l .t".f.tclenc r � e.n~r l 'i ueuuctitt e . ( l "5 H .fed . 'faxe , h ll,.l " � } In our countr1 , w:utr tber~ 1s a t?Cp en\1 abi in� l"f~ spect X the eb pay .:rn ~x� r..he� acce t od of l' nd exp E! ~1 ' J;,Pre i 1 1 h e vl'-'1 ~' ....or v l l~ ge.rv1ee even. af'tel"' r eers flit! emJ. � y>E!es . K.tlOW1n" tl. 1 11 dav lop ~r . l d ::H.th\11 io.e cipal1 ty) . 1 1 in � l � ~u:t.te.rs , C:tAr.tals a.r � rain& ~ e � Tne eo all thi'.;se p 1~ ancn iG" rov ~l 1tal � J. � ('f: s . n�. p. , � - 13 � ) 17 3

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175

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