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[247 U.S. 126, 127] Mr. Henry M. Hoyt, 2d, of Reno, Nev., for Goldfield Co.
Mr. Solicitor General Davis, of Washington, D. C., for Scott, Collector.
Mr. Justice DAY delivered the opinion of the Court.
This case is here upon certificate from the United States Circuit Court of Appeals for the Ninth Circuit, from which it appears that the Goldfield Consolidated Mines Company brought an action against Scott, United States Collector of Internal Revenue, Fourth California District, to recover certain taxes levied for the years 1909 and 1910 under the Corporation Tax Act of 1909. The District Court sustained a demurrer to the complaint, and entered judgment against the present plaintiff in error.
In the certificate the Circuit Court of Appeals sets out the allegations of the complaint as to the first cause of action, stating that the second cause of action need not be repeated as the facts are of the same character as those set out in the first. Omitting formal and unnecessary matters the Circuit Court of Appeals certifies as the allegations of the complaint, to which the demurrer was sustained, the following:
...
The questions propounded are:
1. Under the provisions of paragraph 38 of the Act of Congress entitled: 'An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes,' approved August 5, 1909, (36 Statutes at Large, p. 11, at p. 112), is a mining corporation, for the purpose of determining its net income for the basis of taxation, entitled to deduct from its gross income any amount whatever on account of depletion or exhaustion of ore bodies caused by its operations for the year for which the tax is assessed?
2. Is such a corporation under said act, entitled in the ascertainment of its net income, to a deduction against gross proceeds from the mining and treatment of ores to the extent of the cost value of the ore in the ground before it was mined, ascertained in strict compliance with the rules and regulations of the Treasury Department of February 14, 1911 (Tr. Dec. 1675)? [247 U.S. 126, 131] 3. Where such a corporation claimed originally in its return of net income under said act a deduction for depreciation from exhaustion of ore for the year equal to the actual value of the ore in the ground before it was mined, and having been denied any deduc ion whatever for exhaustion of ore, and having been assessed accordingly and having paid the resulting tax, made application pursuant to sections 3220 and 3226, Revised Statutes for refund, during the pendency of which application said corporation was granted leave to amend and did amend its return of net income in strict accordance with the rules and regulations promulgated February 14, 1911, sections 80 to 89 T. D. 1675, resulting in an amended return based upon cost as provided in said regulations and showing claimed deductions therefrom less than the corporation's net realizations for the year from the ore actually mined, is such corporation entitled to an allowance of deductions and refund of taxes accordingly?
4. In what, if any, way is the right to such claimed deductions affected by the fact that such corporation, in obedience to requirements imposed by the Commissioner of Internal Revenue at the time of filing its amended returns showing the cost value as of January 1, 1909, of the ores mined during the year, caused to be entered in its official books of account and printed in its annual report of that current year to all of its stockholders and to the public, a statement of the total amount of ore exhaustions, multiplied by the unit cost per ton on its mining properties for that and all previous years?
In the brief submitted for the Goldfield Consolidated Mines Company counsel frankly admit that if this court is to adhere to the principles laid down in Stratton's Independence v. Howbert, 231 U.S. 399 , 34 Sup. Ct. 136, and Von Baumbach, Collector, v. Sargent Land Company, 242 U.S. 503 , 37 Sup. Ct. 201, those cases are conclusive against the contentions of the Mines Company in this proceeding. In view of the discussion of the nature [247 U.S. 126, 132] of mining property in Stratton's Independence v. Howbert, supra, and the application of the principles therein laid down in the subsequent cases of Stanton v. Baltic Mining Company, 240 U.S. 103 , 36 Sup. Ct. 278, and Von Baumbach, Collector, v. Sargent Land Company, supra, it is unnecessary to enter upon further consideration of the matters disposed of in those cases. We find no occasion to depart from the principles therein announced, or the rulings therein made. They have been reaffirmed in the case of United States v. Biwabik Mining Company, 247 U.S. 116 , 38 Sup. Ct. 462, 62 L. Ed. --, just decided. In this view it follows that the first and second questions must be answered in the negative, and that it is unnecessary to answer the third and fourth questions.
So ordered.
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Citation: 247 U.S. 126
Docket No: No. 334
Decided: May 20, 1918
Court: United States Supreme Court
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