-78- instant case, the Court of Appeals for the Tenth Circuit in the Burrell case was not presented with the inventory accounting question under section 471 of the proper amounts at which the taxpayers were required to reflect the cores that they acquired in their inventories, and that Court did not decide that issue. The Court of Appeals in Burrell v. Commissioner, supra at 685, held that the item two charges should have been included in income at the time the rebuilt engines were sold by the taxpayers. In dictum, that court suggested that there might be some basis for the contention that the amount thereof [the item two charge] did not accrue until the expiration of 45 days from the date of the sale and unless the customer during such period failed to return the replacement core, and that the value of the core returned should be accrued on the date of its return within the 45-day period. [Id.] However, the Court of Appeals did not apply the foregoing dictum because "the taxpayers' books were so lacking in completeness, that it would have been impossible to determine the amount the taxpayers should have accrued on that basis." Id. Even assuming arguendo that we were to find the above-quoted dictum to be a correct statement of the tax law, we reject petitioner's contention that that dictum controls our resolution of the inventory accounting issue involving Consolidated's customer cores that is presented here. The facts involved in Burrell v. Commissioner, supra, although they might appear to be facially similar to the facts involved here, are different from the facts established by thePage: Previous 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 Next
Last modified: May 25, 2011