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constitute "carrying on a trade or business" within the meaning
of section 162. The Court added:
The meaning of the phrases "engaged in business,"
"carrying on business," and "doing business" were
defined by the Circuit Court of Appeals for the Third
Circuit in Lewellyn v. Pittsburgh, B. & L.E.R. Co., 222
Fed. 177. It was stated therein that, "The three
expressions, either separately, or connectedly, convey
the idea of progression, continuity, or sustained
activity. 'Engaged in business' means occupied in
business; employed in business. 'Carrying on business'
does not mean the performance of a single disconnected
business act. It means conducting, prosecuting, and
continuing business by performing progressively all the
acts normally incident thereto, and likewise the
expression 'doing business', when employed as
descriptive of an occupation, conveys the idea of
business being done, not from time to time, but all the
time. * * *". [Id. at 133.]
In Scottish Am. Inv. Co., Ltd. v. Commissioner, 12 T.C. 49
(1949), the Court addressed whether the taxpayers, foreign
investment trusts, were, by virtue of maintaining a U.S. office,
"engaged in trade or business within the United States" within
the meaning of section 231(b) of the 1939 Code, as amended. The
Court examined "the real business of * * * [the taxpayers], the
doing of what they were principally organized to do in order to
realize profit". Id. at 59 and n.14 (citing Edwards v. Chile
Copper Co., 270 U.S. 452, 455 (1926)). In Scottish American, the
Court decided that the taxpayers’ real business was "the
cooperative management in Scotland of British capital" and that
"the business activities of the American office were merely
helpfully adjunct." Id. at 59. Additionally, the Court stated
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