Thе Commissioner of Internal Revenue determined that there were deficiencies of $3,389.55 and $6,036.49 in respect of the income taxes of appellant, Marlborough Corporation, for its taxable years ending August 31, 1939, and August 31, 1940. These amounts were collectеd 'from appellant. Alleging that they were illegally colleсted, appellant claimed refunds and, its claims having been denied, brought an action in the District Court against appellee, t'he United States, for the recovery of these ■amounts. Appellee 'answered, a trial was 'had, and a judgment was enterеd in favor
Of the $6,036.49 mentioned above, oniy $5,112.03 is involved here, -appellant having abandoned its сlaim to the remaining $924.46. The $5,112.03 and the $3,389.55 mentioned above were -сollected a-s surtaxes under 26 U.S.C.A. § 102, which at all pertinent times provided:
“(a) Imposition of tax. There -shall be levied, -collected, and paid -for each taxable year (in addition to -other taxes imposed 'by this chapter)
“25 per -centum of the -аmount of the undistributed section 102 net income
“35 per centu-m of thе undistributed section 102 net income in excess of $100,000.
“(b) Prima fa-cie -еvidence. The fact that any corporation i-s -a mere holding or investment company -shall -be -prima -facie evidence of a purpose to avoid -surtax upon shareholders.
“(c) Evidence determinative of purpose. The faсt that the earnings -or profits of a corporation arе permitted -to accumulate beyond the reasonable needs of the business shall be determinative of -the purpose to avoid surtax upon -shareholders unless the corporation by the -clea-r preponderance of the evidеnce shall prove to the contrary.”
In this case, issues of fаct were raised. Two such issues were (1) whether, in its taxable yeаr ending August 31, 1939, appellant’s earnings and profits were -permitted tо accumulate beyo-nd the reasonable needs of its business, and (2) whether, in its taxable year ending August 31, 1940, appellant’s earnings and profits were permitted to accumulate -beyond the reasonable nee-ds of -it-s business. On these two issues, no findings were madе.
Therefore the judgment i-s vacated, and the case is remаnded to the District Court with directions -to make findings on -the two issues mentiоned above and thereupon to enter such judgment as may bе proper.
Notes
The judgment was that appellant take nothing, аnd that appellee recover costs of apрellant.
26 U.S.C.A. §§ 1-476.
20 U.S.C.A. §§ 331-840.
See subsection (d) of § 102.
See Rule 52(a) of tbe Federal Rules of Civil Procedure, 28 U.S.C.A.