Racquet Garage Corporation v. Commissioner of Internal Revenue

This is an appeal from a decision of the Tax Court which concerns payments made, pursuant to an alleged oral modification of a written lease, by taxpayer to a corporation controlled by taxpayer’s sole shareholder’s brother which the Tax Court held to be gratuitous and excessive and therefore not deductible as an ordinary and necessary business expense. We are firmly convinced that the ultimate facts found by the Tax Court reasonably flow from the basic facts which are persuasive of the ultimate facts so found. In the circumstances, this court will not disturb the findings of the trial court. Pennroad Corporation v. Commissioner, 261 F.2d 325, 328 (3 Cir.1956), cert. den. sub nom. Madison Fund, Inc. v. Commissioner, 359 U.S. 958, 79 S.Ct. 797, 3 L.Ed. 2d 766 (1959); Around the World Shoppers Club v. United States, 309 F.2d 324 (3 Cir.1962); Simon v. Commissioner, 285 F.2d 422 (3 Cir.1960) ; Heebner v. Commissioner, 280 F.2d 228 (3 Cir.1960); August v. Commissioner, 267 F.2d 829 (3 Cir.1959).

The decision of the Tax Court will be affirmed.