Appeal from the Order of the Board of Finance and Revenue in case of Appeal of Murray Company, Inc., Docket No. R-1968, dated April 29, 1977.
Robert A. Cecchini, with him Ernest D. Preate, Sr., and Levy, Preate & Purcell, for petitioner.
Robert P. Coyne, Deputy Attorney General, for respondent.
President Judge Bowman and Judges Wilkinson, Jr., Mencer, Rogers, Blatt, DiSalle and MacPhail. Judges Crumlish, Jr. and Craig did not participate. Opinion by Judge MacPhail. Concurring Opinion by President Judge Bowman. Dissenting Opinion by Judge Wilkinson, Jr. Judge Rogers and Judge DiSalle join in this dissent.
[ 42 Pa. Commw. Page 572]
Murray Company, Inc. (Murray) has appealed an order of the Board of Finance and Revenue (Board) denying Murray's petition for review of the Department
[ 42 Pa. Commw. Page 573]
of Revenue's (Department) denial of Murray's petition for resettlement of corporate net income tax (CNIT) for the fiscal year ending January 31, 1975. Section 1104 of The Fiscal Code, Act of April 9, 1929, P.L. 343, as amended, 72 P.S. § 1104, provides that such appeals shall be heard de novo. The record in this case consists of a stipulation of facts with exhibits from which we make the following:
1. Murray, a Pennsylvania Corporation, is engaged in the retail hardware business;
2. Murray owns ten shares of Class A stock in Cotter and Co. (Cotter), a corporate manufacturer and distributor of hardware;
3. Cotter is a cooperative within the meaning of Internal Revenue Code § 1381(a)(2);
4. In order to purchase hardware from Cotter, the purchaser must own ten shares of Cotter's Class A stock;
5. In the tax year in question, Cotter distributed to Murray property consisting of cash, Class B non-voting stock and promissory subordinated notes worth $11,990.78, which Murray included as a patronage dividend in its taxable income as returned to the federal government;
6. Murray did not in the tax year in question, or on any prior occasion, claim a "dividends received deduction" for federal income tax purposes with ...