56 STAT.] 77TH CONG., 2D SESS.- CH. 619-OCT. 21, 1942 923 upon the return, or if no return was made by such taxpayer or such predecessor, then the amounts previously assessed (or collected with- out assessment) as deficiencies, but such amounts previously assessed, or collected without assessment, shall be decreased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax. There shall then be ascertained the increase or decrease in each such tax previously determined for each such year which results solely from the treatment of the item consistently with the treatment accorded such item in the determination of the tax liability under this subchapter. To the increase or decrease so ascertained for each such tax for each such year there shall be added interest thereon computed as if the increase or decrease constituted a deficiency or an overpayment, as the case may be, for such prior taxable year. Such interest shall be computed to the fifteenth day of the third month following the close of the excess profits tax taxable year with respect to which the determination is made. There shall be ascertained the difference between the aggregate of such increases, plus the interest attributable to each, and the aggregate of such decreases, plus the interest attributable to each, and the net increase or decrease so ascer- tained shall be the amount of the adjustment under this section with respect to the inconsistent treatment of such item. "(e) INTEREST IN CASE OF NET INCREASE OR DECREASE.- "(1) If an adjustment under this section results in a net decrease, or more than one adjustment results in an aggregate net decrease, the portion of such net decrease or aggregate net decrease, as the case may be, subtracted from the tax which repre- sents interest shall be included in gross income of the taxable year in which falls the date prescribed for the payment of the tax under this subchapter. "(2) If an adjustment under this section results in a net increase, or more than one adjustment results in an aggregate net increase, the portion of such net increase or aggregate net increase, as the case may be, which represents interest shall be allowed as a deduction in computing net income for the taxable year in which falls the date prescribed for the payment of the tax under this subchapter." (b) TAXABLE YEARS TO WHICH APPLICABLE.- The amendments made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1939. SEC. 228 . RULES FOR INCOME CREDIT IN CONNECTION WITH CER- TAIN EXCHANGES. (a) AMENDMENTS TO SECTION 740. -Section 740 is amended to read 4268 at . 1 40; as follows: Supp. I 1 740. "SEC. 740. DEFINITIONS. "For the purposes of this Supplement- "(a) ACQUIRING CoRPORALTION.- The term 'acquiring corporation' means- "(1) A corporation which has acquired- "(A) substantially all the properties of another corpora- tion and the whole or a part of the consideration for the transfer of such properties is the transfer to such other corpo- ration of all the stock of all classes (except qualifying shares) of the corporation which has acquired such properties, or "(B) substantially all the properties of another corpora- tion and the sole consideration for the transfer of such prop-
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