253 F. 854 | N.D. Cal. | 1918
(sitting by special assignment). This action is to recover certain amounts paid by the plaintiff under protest as excise taxes levied under Act Cong. Aug. 5, 1909, § 38 (36 Stat. 112, c. 6), for the years 1910 and 1912.
In its returns plaintiff included in its deductions for’ordinary and necessary expenses, paid out for the maintenance and operation of its business and property, for the year 1910 $17,088.77, and for the year 1912 $25,371.40, being amount expended in each of such years for making “ordinary and necessary” repairs to the deck department, engine department, and commissary department of its steamers, and also $59,642.11 for 1910 and $79,350.96 for 1912, for depreciation of such steamers, being 5 per cent, of the book value thereof.
It is admitted that the deductions for depreciation are reasonable and should be allowed, but the commissioner ruled that the cost of making ordinary and necessary repairs was not a proper item to be included in the operation and maintenance expenses, but was covered by the deductions for depreciation, and required plaintiff to pay taxes thereon, which it. did under protest, and hence this suit.
It follows that the tax complained of was illegally exacted, and the plaintiff is entitled to judgment for its recovery. Findings may be prepared accordingly.