United States v. Portland General Electric Company, an Oregon Corporation

This case involves federal income taxes for the years 1948 to 1953, inclusive. A deficiency for each tax year was assessed by the Commissioner. These deficiencies the taxpayer has paid. The taxpayer duly applied for a refund, which the Commissioner denied. The taxpayer then brought suit in the court below for the recovery of the amounts alleged to have been overpaid. The district court entered judgment for the plaintiff. D.C. 189 F.Supp. 290 .

The case turns on the depreciation allowable on a utility power plant. All the statute says is that, in computing net income, there shall be allowed as a deduction “[a] reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)— (1) of property used in the trade or business. * * * ” Int.Rev.Code of 1939, § 23, as amended. The district court made the factual finding, which we cannot conclude to be “clearly erroneous,” that the “Annual Accrual of allowable depreciation, as computed by PGE [the taxpayer] under its straight-line unit summation method of depreciation using the useful lives of its depreciable property as established by the Utilities Commissioner’s order and subsequent usage and…