July 16, 1935
COMMISSIONER OF INTERNAL REVENUE
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
The question involved in this tax case is, Did the respondent taxpayer have an income from sources outside the United States so as to entitle it to a credit under section 131 of the Revenue Act of 1928 (26 USCA § 2131) against its United States income taxes on account of income taxes paid thereon to the Italian government?
The facts, which are somewhat complicated, are fully stated and discussed in the opinion of the tax board and reference thereto saves needless repetition. As above recited, the case turns on whether the sales of skins and the profits arising therein arose in India, where income tax thereon was paid to the Indian government. We agree with this conclusion. The skins in question were bought in India by the taxpayer's agent. To get the money to pay for them, such agent drew against letters of credit furnished by the American purchaser. While the skins were consigned to the taxpayer corporation, it was simply the conduit or means adopted so the skins might reach the buyer who furnished the money to pay for them. Under these facts, it cannot be held the sale was made in the United States and on the profits made on the sales income taxes were paid by the taxpayer's agent to the Indian government. So regarding, the holding of the tax board is affirmed.
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