US LAWS, STATUTES and CODES : Chan Robles Virtual Law Library USA Supreme Court Decisions | Resolutions : Chan Robles Virtual Law Library

ChanRobles™ Virtual Law Library™ |™   
Main Index Repository of Laws, Statutes and Codes Latest Philippine Supreme Court Decisions Chan Robles Virtual Law Library Latest Legal Updates Philippine Legal Resources Significant Philippine Legal Resources Worldwide Legal Resources Philippine Supreme Court Decisions United States Legal Resources United States Supreme Court Jurisprudence ChanRobles LawTube - Social Network

ChanRobles Internet Bar Review : DebtKollect Company, Inc. - Debt Collection Firm Intellectual Property Division - Chan Robles Law Firm

Philippine Supreme Court DecisionsChanRobles On-Line Bar Review

google search for chanrobles.comSearch for


Subscribe to Cases that cite 357 U. S. 28 RSS feed for this section

U.S. Supreme Court

The Colony, Inc. v. Commissioner, 357 U.S. 28 (1958)

The Colony, Inc. v. Commissioner

No. 306

Argued April 3, 1958

Decided June 9, 1958

357 U.S. 28


Under the Internal Revenue Code of 1939, the Commissioner assessed deficiencies in a taxpayer's income taxes within an extended period provided in waivers executed by the taxpayer more than three but less than five years after the returns were filed. There was no claim that the returns were fraudulent or that the taxpayer had inaccurately reported its gross receipts. Instead, the deficiencies were based upon the Commissioner's determination that the taxpayer had understated the gross profits on sales of certain lots of land for residential purposes as a result of having erroneously included in their cost certain unallowable items of development expense. This resulted in an understatement of the taxpayer's gross income by more than 25% of the amount reported.

Held: the five-year period of limitations prescribed in § 275(c) for cases in which the taxpayer "omits from gross income an amount properly includible therein" which exceeds 25% of the gross income reported is not applicable, and the assessment was barred by the three-year limitation of § 275(a). Pp. 357 U. S. 29-38.

(a) In § 275(c), the words "omits from gross income an amount properly includible therein" refers to situations in which specific items of income are left out of the computation of gross income, and they do not apply to errors in the computation of gross income resulting from a mistaken overstatement of the cost of property sold. Pp. 357 U. S. 32-33.

(b) The legislative history of § 275(c) supports this conclusion. Pp. 357 U. S. 33-35.

(c) In enacting § 275(c), Congress was not concerned with the mere size of an error in reporting gross income, but with a restricted type of situation where the taxpayer's failure to report some items of taxable income put the Commissioner at a special disadvantage in detecting errors. Pp. 357 U. S. 36-38.

244 F.2d 75 reversed. chanroblesvirtualawlibrary

Page 357 U. S. 29

ChanRobles™ LawTube

google search for Search for

Supreme Court Decisions Philippine Supreme Court DecisionsUS Supreme Court Decisions



Browse By ->> Volume


Browse By ->> Year


  Copyright © ChanRobles Publishing Company | Disclaimer | E-mail Restrictions
ChanRobles™ Virtual Law Library |™