Wiley Blount Rutledge

“ Within these limitations the section provided that 'no income or profit, taxable under any law * * * shall * * * be deemed to have accrued to or to have been realized by * * *' the parties specified, and thus removed Chapter X transactions from incidence of the uncertainties characterizing the general 'reorganization' provisions. One who followed the procedure could be assured he would not thereby run into tax consequences which would be worse than the economic illness requiring that cure. ”

“ By them a corporation may realize income from the cancellation or reduction of indebtedness, depending upon the circumstances in which the transaction occurs. However, the line between income producing reductions and others is not precise or definite and great uncertainty prevailed concerning it, both in 1934 when Section 77B was enacted and in 1938 when Chapter X of the Chandler Act was adopted, 11 U.S.C.A. § 501 et seq. The uncertainty was greatest perhaps in relation to transactions occurring in the course of insolvent reorganizations. ”

“ The purpose rather, as in the other provisions of Section 276, was to look to the future and in doing so to make the necessary adjustment, so far as was possible, between the provisions of the Chandler Act and preexisting laws as to proceedings pending when the former took effect. Thus construed, Section 276, sub. c (3) becomes consistent, both in form and in the purpose and effects of applying the new tax provisions, with the other provisions of Section 276 and with the general policy of the Chandler Act as to applicability of its terms. ”

“ To this the Government might be entitled if the statutory mandate were clear. It cannot have that advantage by dubious construction which ignores so much of the statute's setting, purpose and history. ”

“ The matter is one of emphasis. But it is not permissible, in construing provisions designed to encourage reorganizations, by giving relief from taxes, to take them by such an emphasis as if they were framed exclusively for raising revenue.↑ That is, with Section 270 as operating independently of Section 268, to require reduction in basis even though no actual tax benefit has been derived under 268.↑ Cf. ”

“ No assessment was made in this case for 1934 because the petitioner corporation was not organized until 1935.↑ Cf. Part II of this opinion.↑ The section comprises the whole of Article XVI of Chapter X, entitled 'When Chapter Takes Effect.' It is as follows:↑ I.e., refusal of confirmation where the plan had not been approved (cf. § 269) and disallowance of the tax exemption, if the plan had been confirmed. For tax purposes these come to the same result, a fact also indicative that both exceptions were intended to operate within the general limitation of pending proceedings.↑ S. Rep. No. ”