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COMMONWEALTH v. ROCKWELL MANUFACTURING COMPANY (05/02/58)

May 2, 1958

COMMONWEALTH
v.
ROCKWELL MANUFACTURING COMPANY, APPELLANT.



Appeal, No. 24, May T., 1958, from judgment of Court of Common Pleas of Dauphin County, 1956, Commonwealth Docket No. 489, in case of Commonwealth of Pennsylvania v. Rockwell Manufacturing Company. Judgment affirmed.

COUNSEL

Frank A. Sinon, with him F. Eugene Reader, and Rhoads, Sinon & Reader, for appellant.

George W. Keitel, Deputy Attorney General, with him Thomas D. McBride, Attorney General, for appellee.

Before Jones, C.j., Bell, Chidsey, Musmanno and Jones, JJ.

Author: Chidsey

[ 392 Pa. Page 340]

OPINION BY MR. JUSTICE CHIDSEY:

This is an appeal from the final judgment of the court below dismissing the appeal of the taxpayer from the action of the Board of Finance and Revenue in refusing

[ 392 Pa. Page 341]

    to review the resettlement of the taxpayer's corporate net income tax for the year 1953.

The taxpayer, Rockwell Manufacturing Company, is a Pennsylvania corporation having its principal place of business and its fiscal office in Pennsylvania. Within the time provided by law, the taxpayer filed a report of corporate net income tax for the year ended December 31, 1953. A settlement of this tax was made by the Department of Revenue on November 9, 1954 in the amount of $153,270.35 and approved by the Department of the Auditor General on November 15, 1954. However, in its return the taxpayer did not report as gross receipts the proceeds from the disposition of United States securities in the amount of $4,226,380 and from the disposition of other securities in the amount of $76,769.25. Upon the discovery of this omission, and within two years of the settlement of November 9, 1954 as required by the statute, the Department of Revenue on March 1, 1956 resettled the company's tax, adding the gross proceeds of its securities to the numerator and the denominator of the gross receipts fraction.*fn1 The tax as resettled amounted to $156,456.22 or an increase of $3,849.85 over the amount previously determined to be due under the settlement of November 9, 1954. On March 6, 1956, before the resettlement was approved by the Auditor General, the Corporate Net Income Tax Act was amended in several

[ 392 Pa. Page 342]

    respects, and particularly as to gross receipts, to provide that: "... (3) Of the remaining third, such portion shall be attributed to business carried on within the Commonwealth, as shall be found by multiplying said third by a fraction, whose numerator is the amount of the taxpayer's gross receipts from business assignable to this Commonwealth as hereinafter provided, and whose denominator is the amount of the taxpayer's gross receipts from all its business. For the purpose of this section, gross receipts shall not include receipts heretofore or hereafter received from the sale, redemption, maturity or exchange of securities, except those held by the taxpayer primarily for sale to customers in the ordinary course of its trade or business." Act of March 6, 1956, P.L. 1247, 72 PS ยง 3420b. (Amended portion in italics).

Section 2 of the 1956 amendment provides: "This amending act shall take effect as of the first day of January, one thousand nine hundred fifty-six, for corporations reporting on a calendar year basis, or as of the first day of any fiscal year beginning in the calendar year one thousand nine hundred fifty-six for ...


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