United States Supreme Court Cases & Opinions

U.S. Supreme Court

Handy & Harman v. Burnet, 284 U.S. 136 (1931)

Handy & Harman v. Burnet

No. 14

Argue October 19, 1931

Decided November 23, 1931

284 U.S. 136

Syllabus

Section 240 of the Revenue Act of 1918 provides that "affiliated" corporations shall make a consolidated return of net income and invested capital, and domestic corporations shall be deemed affiliated if substantially all their stock "is owned or controlled by the same interests."

Held:

1. That the purpose was to require taxes to be levied according to the true net income and invested capital resulting from and employed in a single business enterprise, even though it were conducted by means of more than one corporation, and to secure substantial equality as between shareholders who ultimately bear the burden. P. 284 U. S. 140.

2. Such returns will not make against inequality or evasion unless the same interests are the beneficial owners in like proportions of substantially all of the stock of each of such corporations; an indefinite and uncertain control of stock, without title, beneficial ownership, or legal means to enforce it, but resting solely on acquiescence, the exigencies of business, or other considerations having no binding force, is not sufficient. P. 284 U. S. 141.

47 F.2d 184 affirmed.

Certiorari, 283 U.S. 813, to review a judgment affirming a decision of the Board of Tax Appeals. 17 B.T.A. 980.

Page 284 U. S. 137