Signal Gasoline Corp. v. Commissioner

This is the second appeal from the Board of Tax Appeals in the matter of the income tax for the years 1925 and 1926 of the Signal Gasoline Corporation. We refer to our former decision in 66 F.(2d) 886 for a statement of the facts. It was held in tliat decision that the relation of the Signal Gasoline Corporation to the oil deposits in the land from which they secured the wet gas for their refining or manufacturing plant was such that they were entitled to a deduction for the depletion of the natural resource contained in the land. The matter was sent bade to the Board of Tax Appeals for further consideration. Section 204 (c) (2) of the Revenue Act of 1926 (26 USCA § 935 (c) (2) provides: “In the case of oil and gas wells the allowanee for depletion shall be 27% per cent-urn of the gross income from the property during the taxable year. Such allowance shall not exceed 50 per centum of the net income of the taxpayer (computed without allowance for depletion) from the property, except that in no case shall the depletion allowance be less than it would be if computed without reference to this paragraph.

Upon the new hearing before the Board of Tax Appeals, no new evidence was…