335 F2d 561 Midland-Ross Corporation v. United States

335 F.2d 561

64-2 USTC P 9667

UNITED STATES of America, Defendant-Appellant.

No. 15524.

United States Court of Appeals Sixth Circuit.

July 29, 1964, Certiorari Granted Dec. 14, 1964, See 85
S.Ct. 441.

Theodore M. Garver, Cleveland, Ohio (George H. Rudolph, Theodore R. Colborn, Cleveland, Ohio, on the brief; Jones, Day, Cockley & Reavis, Cleveland, Ohio, of counsel), for appellant.

Joseph Kovner, Atty., Dept. of Justice, Washington, D.C. (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Leonard M. Goldbert, Attys., Dept. of Justice, Washington, D.C., Merle M. McCurdy, U.S. Atty., Bernard J. Stuplinski, Asst. U.S. Atty., Cleveland, Ohio, on the brief), for appellee.

Before WEICK, Chief Judge, CECIL, Circuit Judge, and McALLISTER, Senior Circuit Judge.


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This cause is before the Court on appeal from a judgment of the United States District Court for the Northern District of Ohio granting judgment in favor of the appellee, a taxpayer, against the United States, the appellant. The sole question presented on the appeal is whether original discount income received upon the sale of notes prior to their maturity is entitled to be treated as capital gains under Section 117(f) of the Internal Revenue Code of 1939.


Judge Kalbfleisch of the District Court wrote a comprehensive opinion in the case in which he followed the ruling of this Court in Commissioner of Internal Revenue v. Caulkins, 6 Cir., 144 F.2d 482. While some courts1 have taken a contrary view on the issue presented we are of the opinion that the Caulkins case, controlling in our circuit, was correctly decided.


The pertinent facts are stated in the opinion of the District Court reported at Midland-Ross Corp. v. United States, 214 F.Supp. 631. We agree with the opinion of Judge Kalbfleisch and the judgment of the District Court is affirmed.


Dixon v. United States, 333 F.2d 1016, C.A.2; Pattiz v. United States, 311 F.2d 947, Ct.Cl.; United States v. Harrison, 304 F.2d 835, C.A.5, cert. den., 372 U.S. 934, 83 S.Ct. 881, 9 L.Ed.2d 765; Rosen v. United States, 288 F.2d 658, C.A.3; Commissioner of Internal Revenue v. Morgan, 272 F.2d 936, C.A.9