Findings of Fact 141 C. Cls. The return was filed and the tax paid under a protest in writing. The reported income of $146,793.09 was itemized in an exhibit attached to the return as follows: Members dues-$60,434.44, Service Charges and Miscellaneous Income $83,201.14, Net Discounts Earned-$3,063.51, and sale of fully depreciated furniture $94. The deductions claimed on the return included $96,355.30 for salaries and wages, $6,900 for rent, $1,091.11 for Federal Old Age Benefits Tax, $239.84 for depreciation on office furniture and fixtures and $30,581.35 for expenses separately itemized as follows: Office expense-$3,736.11, Stationery and printing-$2,236.47, Postage $3,842.12, Telephone and telegraph-$2,655.42, Publicity-$2,337.94, Traveling expense$13,088.76, Research-$2,597.94, and Inventory of supplies written of $176.58. 12. On March 12, 1954, the plaintiff filed its Federal income tax return for the calendar year 1953 on form 1120 reporting a total gross income of $152,529.25 with deductions therefrom aggregating $142,167.08 and a net income of $10,362.17 with a total income tax of $3,108.65. Such return and payment of the tax shown thereon were delivered to the Director of Internal Revenue under a written protest. The reported income of $152,529.25 was itemized in an exhibit filed with the return as follows: Members dues-$60,036.39, Service charges and Miscellaneous Income-$89,401.66, Net discounts earned-$3,006.20, and Sale of fully depreciated furniture and fixtures-$85. The deductions claimed on the return included $99,517.57 for salaries and wages, $7,590 for rent, $1,127.43 for Federal Old Age Benefits Tax, $373.41 for depreciation on office furniture and fixtures, $2,040.61 for term life insurance and hospital and surgical contracts for the benefit of 25 employees who made no individual contributions, and $31,518.06 for expenses separately itemized as follows: Office expense-$4,084.86, Stationery and printing$3,114.94, Postage $3,085.35, Telephone and telegraph$2,848.17, Traveling expense-$14,056.52, Research$1,886.16, Publicity-$1,914.96, and Legal fees-$527.10. 13. Plaintiff's balance sheets at the beginning and at the end of the calendar years 1952 and 1953 appear below: 14. On October 16, 1953, the plaintiff timely filed a formal claim for refund of $3,487.65, with interest at 6 percent per annum, for the calendar year 1952. On May 28, 1954, the plaintiff timely filed a similar refund claim for the calendar year 1953 for an amount of $3,108.65, with interest at 6 percent per annum. No action had been taken by the Commissioner of Internal Revenue upon either of the two claims for refund on December 20, 1954, when the petition was filed in this cause. Since that date each refund claim has been disallowed in full, with registered notice to the plaintiff as provided in section 6532 (a) (1) of the Internal Revenue Code of 1954. Each claim for refund set forth as grounds and reasons for allowance an attached addendum reading: Claimant is entitled to exemption from income taxes pursuant to Section 101 (6) of the Internal Revenue Code. The Hospital Bureau of Standards and Supplies, Incorporated, is a membership corporation organized under the laws of the State of New York. All of its members are nonprofit charitable institutions, and its By-Laws provide that only such institutions are eligible for membership. The Hospital Bureau of Standards and Supplies, Incorporated, has no capital stock, and no stockholders. Conclusion of Law 141 C. Cls. It operates as a centralized agency for purchases of necessary hospital supplies by its members. All of its income in excess of actual operating expenditures is placed in a "Revolving Fund" from which such purchases are made. No compensation is paid to any individuals other than those actively engaged in the daily functions of the corporation. The claimant handles no goods, carries no stock, and, with two very small exceptions, makes no purchases for its own account. Its activities are an integral and inseparable part of the operations of its charitable members, whose present standards of efficiency and low cost of operation are made possible only by the securing to them of the advantages of group purchasing and centralized analysis of necessary items. The claimant is not a "feeder" corporation, and is not organized and operated for the primary purpose of carrying on a trade or business for profit. All of its functions are within the scope of the activity of its charitable members. No part of claimant's activities is carrying on propaganda or otherwise attempting to influence legislation. 15. In 1951 plaintiff was granted institutional membership in the American Hospital Association. 16. Plaintiff's activities have effected savings to the hospitals constituting its membership. 17. During the calendar years 1952 and 1953 plaintiff was composed of charitable, tax-exempt member organizations. CONCLUSION OF LAW Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover, together with interest thereon as provided by law, and judgment will be entered to that effect. The amount of recovery will be determined pursuant to Rule 38 (c). In accordance with the opinion of the court and on a memorandum report of the commisisoner as to the amount due thereunder, it was ordered May 7, 1958, that judgment for the plaintiff be entered for $3,487.65 for 1952, and $3,108.65 for 1953, with interest on each sum as provided by law. Syllabus CLARENCE TIMOTHY LOWELL v. THE UNITED STATES [No. 361-56. Decided January 15, 1958] On Defendant's and Plaintiff's Motions for Summary Judgment Pay and allowances; retired Air Force disability pay.—Plaintiff, an Air Force officer with over 30 years of military service, was serving on active duty in the temporary grade of major at the time of his retirement, but held the rank of lieutenant colonel in the Officers' Reserve Corps having been promoted several years prior to his retirement. He claims that he is entitled to the retired pay of the higher rank rather than that of a major, which he has been receiving. It is held, under the authority of Tracy v. United States, 136 C. Cls. 211, that plaintiff is entitled to recover, with the amount of recovery to be determined pursuant to Rule 38 (c). Armed Services 13.5 (6) Same; Career Compensation Act.-The Career Compensation Act does not require that an officer be serving on active duty at the higher rank at which he is retired in order to receive the higher pay. The word rank is held to mean permanent rank unless specifically qualified in the statute and no such qualification is found. Armed Services 13.5 (1) Same; intent of Congress.-A commission in the Reserve requires that the officer discharge the duty of the office to which he is appointed by doing the things required thereby. He is not to enter on active duty until so ordered by superior authority. There is no indication that Congress intended to make serving on active duty a prerequisite in determining the retirement pay. Armed Services 13.5 (6) Same; consistent performance.—It is held that there is nothing inconsistent about an officer holding or serving in a permanent rank and at the same time performing active duty in a different temporary rank. Armed Services 13.5 (1) Same; Pay Readjustment Act of 1942.-Plaintiff, being a veteran of World War I, is entitled to have his retired pay computed in accordance with paragraph 4, section 15 of the Pay Readjustment Act of 1942. Defendant's contention that plaintiff is Opinion of the Court 141 C. Cls. ineligible to receive 75 percent of the regular pay of a lieutenant colonel is not sustained. Armed Services 13.5 (6) Mr. Clarence Timothy Lowell, pro se. Mrs. Sondra K. Slade, with whom was Mr. Assistant Attorney General George Cochran Doub, for the defendant. Mr. Harry E. Wood filed a brief for Charles C. Budd (Case No. 467-56) as amicus curiae. REED, Justice (Ret.), sitting by designation, delivered the opinion of the court: This is a suit by a Reserve officer retired for physical disability who seeks to recover the difference between disability retired pay based upon 75 percent of the basic pay of a major, which he is now receiving, and 75 percent of the basic pay of a lieutenant colonel to which he claims he is entitled. Both parties have moved the court for summary judgment on the ground that there is no genuine issue of any material fact and as a matter of law they are entitled to judgment. Plaintiff first entered the service as an enlisted man on December 1, 1917, and remained on active duty until January 21, 1918, when he was honorably discharged. On April 20, 1918, he re-entered the service as an enlisted man and continued in this status until commissioned a second lieutenant, Army of the United States, on October 22, 1918. On January 23, 1919, plaintiff was again discharged from active duty, and on March 31, 1919, accepted a commission as second lieutenant, Air Corps Reserve. He has been a member of the Reserve components of the Army and the Air Force continuously from the date of his original Reserve commission until the present time, receiving successive promotions to lieutenant colonel. On February 1, 1942, while a Reserve captain, plaintiff was called to active duty with the Army Air Corps in the temporary grade of captain, Army of the United States, and served in this grade until promoted to the temporary grade of major on June 17, 1942. He continued to serve in the temporary grade of major on active duty until August 31, 1950, when he was retired for physical disability pursuant to title IV of the Career Compensation Act of 1949, 63 Stat. 802, |