612 FJSDRRAli S£F01iTE£. �United States v. Central National Bank. {District Court, 8. D. New York- February 3, 1882.) �1. Banks — State Tajcation— Retuens, what Deductions Allowed — " Pbofits" �Defiked. �In ascertaining the "amount of profits which have accrued or been earned and reoeived " hj a bank, for which it was required to make returns by section 121 of the act of June 30, 1864, (13 St. at Large, 284,) embezzlemonta during the period covered by the returns may be deducted. By "profits " is meant net profits after deducting expenses and losses from whatever sources con- nected with the business. �2. Retcthns dp Profits — Deduction of Lusses by Embbzzlembnt, �Where, for the years 1866, 1867, and 1868, the defendant, in making its returns, deducted the amounts paid by it forstate taxes upon the value of the shares of capital stock, and required by the state law to be paid " out of its funds," and suit being now brought for a duty of 5 per cent, on the amount so paid by the bank on account of the statc tax, on the ground that it was un- lawfully deducted from the returns made, and it appeared that the amount of losaea by embezzlement sufEered by the bank during each yearwas greater than the amount so paid for taxes and deducted from the returns, and that such losses had not been deducted, because not discovered by the bank till after the returns made and its duties paid thereon, hdd, that its returns being in fact fully equal to all the bank's proflt for those years, no further duty could be recovered. �3. JunaMENT ON DEMURnBB — GoiNG Back to Fikst FAtrliT. �Upon demurrer the whole record is presented, and judgment goes against the party in whose pleading there is found the tirst substantial fault. �4. PLEADlUa — iNStTFFICIENT ALLEGATIONS IN CoMPLAINT. �Where the coraplaint claimed duty for alleged insufBcient return.9 for the year 1870, under section 521 above referrcd to, but did not state that the defendant had " neglected to or omitted to make a return of dividends or addi- tions to its surplus or contingent funds as ofteu as once in six months," and, upon an answer claiming the right to deduct the state tax, as above stated, the plaintifE demurred to the defonce for insutBciency in law, held, without passing upon this defence, that the complaint was insuflfioient, and judgment should be ordered for the defendant unless plaintifE amended as allowed. �Demurrer to an Answer. �•S. L. Woodford, Dist. Atty., and E. B. Hill, Asst., for the United �States. �Martin e Smith, for defendant. �Brown, D. J. This action was commenced on july 22, 1881, to recover the sum of $12,456.94 principal, beaides interest, for arrears of income tax alleged to be due from the defendant for the years 1866, 1867, 1868, and 1870, under sections 120 and 121 of the rev- enue act passed June 30, 1864, (13 St. at Large, c. 173, p. 283.) ��� �
