- 22 -
price of his Diesel Power stock, which was in excess of the
amount held by CTC, and that he refused to pay amounts owed to
Diesel Power under a claim of right.
II. Transactions With Manufacturers--Commission Income
During the years at issue there were numerous business
relationships between various manufacturers and petitioner, CTC,
or Diesel Power, which involved essentially three types of
services performed for the manufacturers: (1) Distributorship,
whereby the appointed distributor took title to the manufactured
goods until sold to the end-use customer; (2) representation
arrangements, whereby the representative promoted the sale of
manufactured products; and (3) consultancies, whereby advice and
expertise were provided in selling products. The income that
arose out of these relationships is referred to by respondent in
the notices of deficiency as "commission" income. The vast
majority of adjustments in dispute involve commissions that were
paid to CTC but treated as Diesel Power commissions on the CTC
receipts journals. The activities leading up to the adjustments
at issue with respect to each company are set forth below.
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011