The opinion of the court was delivered by: LUONGO
This is a suit, tried to the Court without a jury, by a taxpayer against the United States to recover $ 12,000.00 deposited by taxpayer in escrow with defendant. The fund was deposited with defendant to enable taxpayer to sell her cafe business free of liens for cabaret taxes for the years 1953, 1954 and 1955 resulting from additional assessments, interest, statutory costs and lien fees totalling $ 19,595.19. On July 10, 1957, defendant applied the sum so deposited in partial satisfaction of the additional assessments. Defendant counterclaims herein to recover the sum of $ 7,595.19, representing the unpaid balance of the additional assessments. On pleadings and proof, the Court makes the following
1. Plaintiff, Catherine Carroll, during the years in question, conducted a cafe business under the name Carroll's Cafe at 141 South 52nd Street, Philadelphia, Pennsylvania.
2. In the latter part of the year 1956, Edmund Costantini, an agent for the Internal Revenue Service, conducted an investigation of Carroll's Cafe and examined the books to determine the accuracy of returns made for the years 1953, 1954 and 1955 for cabaret taxes.
4. Carroll's Cafe opened for business at various hours ranging from the legally permissible opening hour of 7:00 a.m., Standard Time, or 8:00 a.m., Daylight Saving Time, until as late at 2:00 p.m., and remained open until the legally permissible closing hour, 2:00 a.m., Standard Time; 3:00 a.m., Daylight Saving Time, for week days, and 12 midnight, Standard Time and 1:00 a.m., Daylight Saving Time on Saturday nights.
5. From the time of opening until 9:00 p.m. there was only one bartender on duty. From 9:00 p.m. until closing there were two bartenders on duty. From the time of the opening of the cafe until 8:30 p.m. there were no waitresses on duty and after 8:30 p.m. there were two and sometimes three waitresses on duty until closing time.
6. Prices charged for beverages served by Carroll's Cafe changed at several times during the day. Prices until 6:00 p.m. were 35 cents for beer and 45 to 50 cents for whiskey. From 6:00 p.m. to 9:00 p.m. the price of beer was raised to 50 cents; from 9:00 p.m. until closing beer and whiskey were sold for 75 cents. Approximately 95% Of all sales made were collected for as soon as the drinks were served.
7. From 9:00 p.m. until closing, Carroll's Cafe provided continuous entertainment, some of which consisted of instrumental music only, and some of which presented performances by singers, dancers, etc. (The latter will be hereinafter referred to for convenience as 'floor show'). In the cafe a sign painted on the wall informed patrons that the prices of drinks included federal excise tax.
8. Plaintiff recorded sales made at different times during the day by various cash register symbols.
(a) The symbol 'CG' was used to record all sales from the time of opening until the start of the first floor show. It was also used to record all sales made from the end of the last floor show until closing.
(b) The symbol 'SP' was used to record all sales made during the time floor shows were in progress.
(c) The symbol 'RT' was used to record all sales made during the intervals between floor shows.
9. During the years in question, annual sales were recorded for each of the symbols as follows:
1953 1954 1955
CG $ 49,663.82 $ 49,363.75 $ 42,054.55
RT $ 31,540.45 $ 30,809.75 $ 24,410.85
SP $ 16,243.55 ...