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customer, even though under no obligation to do so, decided to
accept Consolidated's offer to purchase and delivered a customer
core to Consolidated and if that core satisfied Consolidated's
requirements for acceptance of a customer core, Consolidated
(1) purchased that core for a price which generally was equal to
the core amount (i.e., the core credit amount) and which was
shown on the customer core sales invoice under the column headed
"Cores--Price Each" and (2) paid for it by crediting that
customer's customer account receivable in an amount equal to that
price (viz, the core credit amount). The customer core purchase
offer amount and the core credit amount for each customer core
were set at an amount that the marketplace in which Consolidated
acquired customer cores demanded.
The facts that we have found on the record in this case and
the issue under section 471 that is presented to us distinguish
this case from Redwing Carriers, Inc. v. Tomlinson, 399 F.2d 652
(5th Cir. 1968), and Burrell v. Commissioner, 400 F.2d 682 (10th
Cir. 1968), affg. T.C. Memo. 1967-160, the principal cases on
which petitioner relies to support its position that Consolidated
acquired customer cores in exchange, and not purchase,
transactions. Consequently, we find petitioner's reliance on
those cases to be misplaced.
The Court of Appeals for the Fifth Circuit began its opinion
in Redwing Carriers, Inc. v. Tomlinson, supra, by framing the
issue presented to it as follows:
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