George Sutherland

“ We think not. The statement of the court below that it was conceded by both parties that the expenditures were 'additional rentals' is challenged by the government and does not seem to have support in the record. The term 'rentals,' since there is nothing to indicate the contrary, must be taken in its usual and ordinary sense, that is, as implying a fixed sum, or property amounting to a fixed sum, to be paid at stated times for the use of property. ”

“ All losses actually sustained and charged off within the year and not compensated by insurance or otherwise, including a reasonable allowance for the exhaustion, wear and tear of property arising out of its use or employment in the business: * * * Provided, that no deduction shall be allowed for any amount paid out for new buildings, permanent improvements, or betterments made to increase the value of any property or estate, and no deduction shall be made for any amount of expense of restoring property or making good the exhaustion thereof for which an allowance is or has been made. ”

“ First, the amount must be prorated, under a regulation of the Treasury Department, over the life of the improvements or the life of the lease, whichever is the shorter. The federal district court gave judgment for respondent, which was affirmed by the Circuit Court of Appeals (289 F. 354) , and the case is here on certiorari (263 U.S. 693, 44 S.C.t. 34, 68 L. Ed. 510) .
Clearly the expenditures were not 'expenses paid within the year in the maintenance and operation of its [respondent's] business and properties' ”