The opinion
Sternhagen,
dissenting: It seems to me that the taxpayer, a commercial corporation, in the course of carrying on its business, and as one of the recognized features of its business, received compensation by way of consideration for a contract to perform its ordinary service. There was nothing altruistic in the motive which prompted these prospective customers to finance the extension. They needed service and they were willing to pay for it. If the facilities had been already constructed and available they would have paid a price embodied in the rate, and this would unquestionably have been within the company’s gross income. Since the facilities were not available the company could only be induced to give service by the receipt of something in addition to the rate, namely, contributions sufficient to enable it to construct and furnish both facilities and service. Whatever it received in this way seems to me to be within its gross income from carrying on its business.
I do not understand the Cuba Railroad decision to hold contrariwise. That was a subsidy contributed by the sovereign, and I can not believe that the court intended it to be inferred that a private contribution made in consideration for the performance of one of the corporation’s normal business functions was to be likewise free from tax. Furthermore, I had understood that the reasoning of this Board in the decision of the Appeal of S. E. Overton Co., 2 B. T. A. 1160, proceeded upon the view that such an amount contributed by a municipality for the construction of a taxpayer’s plant was income.