Zephyr Mills, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent, 279 F.2d 494 (3d Cir. 1960)

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US Court of Appeals for the Third Circuit - 279 F.2d 494 (3d Cir. 1960) Argued May 4, 1960
Decided May 13, 1960

Joseph J. Brown, Philadelphia, Pa., for petitioner.

Harry Marselli, Washington, D. C. (Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Harry Baum, Harold M. Seidel, Attys. Dept. of Justice, Washington, D. C., on the brief), for respondent.

Before KALODNER, HASTIE and FORMAN, Circuit Judges.


The Tax Court found that advances made to the petitioner corporation represented contributions to its equity capital rather than bona fide loans and that consequently they did not qualify as interest expense under Section 23(b) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 23(b).

Upon review of the record we are unable to say that the Tax Court's finding was clearly erroneous.

The decision of the Tax Court will be affirmed.