Terrell Company, Petitioner, v. Commissioner of Internal Revenue, Respondent

Terrell Company, Petitioner, v. Commissioner of Internal Revenue, Respondent. Docket Nos. 9681, 10384, 11831. Promulgated January 10, 1928. V. 0. Biggers, Esq., for the petitioner. J. W. Fisher, Esq., for the respondent. [MAJORITY — Phillips :] OPINION. Phillips : This proceeding was presented upon a stipulation setting out certain agreed facts and documentary evidence in support thereof. Substantially the same question which is before us was presented to the Supreme Court in Heiner v. Colonial Trust Co., Executor, 274 U. S. 731, and decided (on November 21, 1927) adversely to the position taken by petitioner. The only fact brought to our attention which might distinguish the present proceeding from the situation upon which the Supreme Court ruled is that in the present case the lands of the petitioner are expressly exempted from taxation, while the lands of the Osage Tribe of Indians are not. It was a lease from this latter tribe which the Supreme Court considered in the Colonial Trust Co. case. The members of that tribe could claim exemption from the income tax only upon the ground that the taxing statute should not be interpreted to include them. The lands of the Creek Tribe of Indians, however, are expressly exempted from taxation. Upon authority of Pollock v. Loan & Trust Co., 157 U. S. 429; Peck v. Lowe, 247 U. S. 165, and other decisions, it is contended that if the source of the income is exempt, so are the income and revenues derived therefrom. The situation of the lessee in the instant proceeding, however, appears to be no different from that of the lessee in the case before the Supreme Court. We regard the opinion in that case as controlling the decision of the question raised in this proceeding. Reviewed by the Board. Decision will be entered for the respondent.