decided: November 12, 1940.
HELVERING, COMMISSIONER OF INTERNAL REVENUE
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT.
Hughes, McReynolds, Stone, Roberts, Black, Reed, Frankfurter, Douglas, Murphy
[ 311 U.S. Page 54]
MR. JUSTICE BLACK delivered the opinion of the Court.
Because of a previously existing deficit, petitioner corporation was prohibited by state law*fn1 from distributing as dividends its profits earned in 1936. Notwithstanding this state prohibition, the Commissioner held respondent liable under the 1936 Revenue Act*fn2 for surtax on undistributed profits. The Board of Tax Appeals sustained
[ 311 U.S. Page 55]
the Commissioner,*fn3 and the Circuit Court of Appeals affirmed.*fn4 On a similar state of facts the Court of Appeals for the Ninth Circuit held undistributed profits exempt from surtax.*fn5 We granted certiorari in both cases to resolve this conflict.*fn6 The legal questions here presented are in all respects the same as those presented in Helvering v. Northwest Steel Rolling Mills, ante, p. 46, and on the authority of that case the decision below is
105 F.2d 740, affirmed.