PUBLIC LAWS-CH. 619-OCT. 21, 1942 the future taxable year, the portion of net abnormal income attributable to the future taxable year shall not be included in the gross income for such future taxable year to the extent that the inclusion of such portion of net abnormal income in the gross income for such future taxable year did not result in an increase in tax for such future taxable year by reason of the provisions of paragraph (1). "(e) APPLICATION OF SECTION. -T h is section shall be applied only for the purpose of computing the tax under this subchapter as pro- vided in subsections (c) and (d), and shall have no effect upon the computation of base period net income. For the purposes of sub- sections (c) and (d)- "(1) Net abnormal income means the aggregate of the net abnormal income of all classes for one taxable year. "(2) Under regulations prescribed by the Commissioner with the approval of the Secretary, the tax under this subchapter for previous taxable years shall be computed as if the portions of net abnormal income for each previous taxable year for which the tax was computed under this section were included in the gross income for the other previous taxable years to which such portions were attributable. "(3) If both subsections (c) and (d) are applicable to any current taxable year, subsection (d) shall be applied without regard to subsection (c), and subsection (c) shall be applied as if the tax under this subchapter, except for subsection (c), was the tax computed under subsection (d) and as if the gross income and the other amounts necessary to determine the adjusted excess profits net income were those amounts which would result in the tax computed under subsection (d). "(f) ABNORMAL INCOME FROM EXPLORATION, ETC.- If by reason of taking into account, in determining constructive average base h fra . period net income under section 722, exploration, discovery, prospect- ing, research, or development of tangible property, patents, formulae, or processes, or any combination of the foregoing, extending over a period of more than 12 months, such constructive average base period net income is higher than it would be without such taking into account, only such portion of the income in the taxable year resulting from such activity which is of a class described in subsection (a) (2) (C) as is attributable to another taxable year under this sub- chapter shall be deemed attributable to a year other than the taxable year." (b) TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.-The amendments made by this section shall be applicable with respect to taxable years beginning after December 31, 1939. SEC. 222 . RELIEF PROVISIONS. 54 Stat. 986. 26 U.S . Caupp. i, (a) GENERAL RELIEF. -Section 722 is amended to read as follows: S722, "SEC. 722. GENERAL RELIEF-CONSTRUCTIVE AVERAGE BASE PE- RIOD NET INCOME. "(a) GENERAL RuLE.- In any case in which the taxpayer establishes that the tax computed under this subchapter (without the benefit of this section) results in an excessive and discriminatory tax and estab- lishes what would be a fair and just amount representing normal earn- ings to be used as a constructive average base period net income for the purposes of an excess profits tax based upon a comparison of nor- mal earnings and earnings during an excess profits tax period, the tax shall be determined by using such constructive average base period net 914 [56 STAT.
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