United States v. Consolidated Edison Co., 366 U.S. 380 (1961)

United States v. Consolidated Edison Co. of New York, Inc.

No. 357

Argued April 24, 1961
Decided May 22, 1961
366 U.S. 380

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Respondent corporation keeps its books and computes its income taxes on the calendar year accrual basis of accounting. In each of the years 1946 through 1950, it paid under protest the entire amount of taxes assessed against its real estate in order to avoid interest, penalties and the seizure and sale of its property. It admitted liability for 85% of such taxes, denied liability for the remaining 15%, and promptly instituted court proceedings for refund of the 15%. In 1951, the court proceedings resulted in a final determination that respondent was liable for 95% of the entire amount, and 5% of the amount it had paid was refunded to it.

Held:

1. For income tax purposes, $10 of each $15 of respondent’s contested tax liability accrued, not in the year of the remittance, but in 1951, when the state court entered its final order determining that liability. P. 392.

2. The $5 of each $15 of contested tax liability for which respondent was held not liable and which was refunded to it was not income to respondent in 1951. P. 392.

279 F.2d 152, affirmed.