jarecki searle argued march decided june together polaroid corporation commissioner internal revenue certiorari appeals first circuit argued march development new products discovery within meaning internal revenue code amended income resulting manufacture sale certain patented drugs cameras camera equipment stereo products resulting inventions included within statutory definition abnormal income qualify korean war excess profits tax relief excess profits tax act pp income made eligible korean war excess profits tax relief concluding sentence paragraph provides classification income class described subparagraphs inclusive shall subject regulations prescribed secretary pp reversed affirmed wayne barnett argued cause petitioners respondent briefs former solicitor general rankin solicitor general cox assistant attorneys general rice oberdorfer acting assistant attorneys general sellers heffron harry marselli norman wolfe isaac barnett argued cause petitioner brief david saperstein walter cummings argued cause respondent brief edwin austin chief justice warren delivered opinion cases present problems interpretation internal revenue code section excess profits tax act stat act intended tax high rates unusually high profits earned korean war imposes tax profits excess amount deemed represent taxpayer normal profits recognizing however profits otherwise subject tax scheme might stem causes inflated wartime economy congress enacted section grants relief certain cases abnormal income defined allocating income years received purposes computing tax dispute cases whether income sales certain new products falls within statutory definition abnormal income taxpayers claim income sales products income resulting discovery claim therefore abnormal income within class defined income resulting exploration discovery prospecting combination foregoing extending period months taxpayer inventor producer polaroid land process camera film produce photograph seconds polaroid synthetic polarizer device incorporated viewers audiences watched three dimensional motion pictures vogue years ago inventions product months research novel according taxpayer patented polaroid land equipment subject patents end taxpayer characterizes invention revolutionary production new departure business taxpayer hitherto engaged primarily manufacturing selling optical products polarizing sunglasses visors camera filters returns taxpayer utilized provisions computing tax income sales photographic equipment polarizers commissioner determined applicable tax upheld determination deficiency appeals first circuit affirmed holding taxpayer inventions discoveries income sale abnormal income granted certiorari case resolve conflict decisions first seventh circuits present purposes accept first circuit taxpayers assertions novelty products also agree taxpayers inventions discoveries word used income sales new products may receive special treatment provided look first face statute discovery word usable many contexts various shades meaning however stand alone gathers meaning words around words strongly suggest precise narrow application intended three words conjunction exploration discovery prospecting describe activity oil gas mining industries difficult conceive industry apply certainly development manufacture drugs cameras industries maxim noscitur sociis word known company keeps inescapable rule often wisely applied word capable many meanings order avoid giving unintended breadth acts congress see neal clark application maxim leads conclusion discovery means discovery mineral resources examine construction compare subparagraphs becomes unmistakably clear discovery meant include development patentable products discovery wide scope need provision subparagraph income sale patents formulae processes income taxpayers reading discovery also income resulting discovery within subparagraph borrow homely metaphor judge aldrich first circuit big hole fence big cat need small hole small one statute admits reasonable construction gives effect provisions circumstances adopt strained reading renders one part mere redundancy see menasche taxpayers assert ordinary meaning discovery must govern find ample evidence face statute shall show legislative history technical usage intended even without evidence find difficult believe congress intended apply layman meaning discovery describe products research lead necessity drawing line things found things made ordinary usage things revealed discoveries new fabrications inventions appear senseless congress adopt usage provide relief income discoveries yet make provision income inventions perhaps patent law discovery uncommonly wide meaning taxpayers suggest fields patents taxation lores unto usage patent law means entirely taxpayers favor unpersuasive evidence effect congress intend introduce difficult distinction inventions discoveries excess profits tax law relevant legislative history fortifies conclusions words statute lead us word discovery used many years tax laws always used limited meaning finding mineral deposits revenue act enacting one earliest excess profits tax laws limit placed excess profits tax income bona fide sale mines oil gas wells interest therein principal value property demonstrated prospecting exploration discovery work done taxpayer revenue act stat identical limitation imposed income tax levied act usage discovery obtained allowance depletion deductions limitation income tax proceeds sale mineral deposits without significant change revenue acts remains income tax provisions internal revenue code carried forward code discovery linked exploration prospecting word restrictively applied extractive industries correspondingly narrow use discovery continued since depletion allowance sections appears code years preceding enactment section issue time discovery used successive taxing statutes word developed term art precise limited meaning excess profits tax act stat made specific mention types abnormal income qualifying relief earlier excess profits tax statutes indication worked transformation meaning discovery section stat amended stat classified six types abnormal income among following income resulting exploration discovery prospecting research development tangible property patents formulae processes combination foregoing extending period months relief provisions excess profits tax act construe modeled part world war ii act different significant respects classifications income new congress gave separate treatment income discovery minerals income invention provided relief subparagraph income resulting exploration discovery prospecting provided subparagraph income sale patents formulae processes emphasis added subparagraph encompass income inventions cover income sale products made new patent sort income issue taxpayers assert income inventions realistically speaking abnormal businesses discovery new mine business prospector income within spirit say held within letter subparagraph clear however congress may recognized abnormal nature sort income chose deliberately deny relief limit relief cases research development provided subparagraph relief provisions world war ii act intended provide flexible rules application often uncertain affair administering commissioner often faced difficult task separating income product research development resulting merely improved management sales efforts difficulty distinction led tax hold distinction must made exercising common sense judgment entirely possible allocation made one person never match made another ramsey accessories mfg commissioner congress recognized delay uncertainty caused element administrative discretion sections set drafting excess profits tax law principle subjective judgments avoided new law sess principle expressly followed drafting senate committee reported follows equivalent provision world war ii law sec also permitted adjustments reference certain types income particularly resulting sale tangible property arising research development extended period months provision old law potential loophole major dimensions appeared means restricting adjustment truly meritorious cases introduction large degree administrative discretion type required general relief clause world war ii law sec need reallocation income seemed materially less classes income described bill omits item list abnormal types income reallocation made sess taxpayers recognize must congress intended change language limit kinds income eligible relief say however income research development excluded comes inventions merely patentable also sufficiently revolutionary called genuine discoveries still within protection find impossible believe amendment designed eliminate uncertainly administrative discretion introduce law without congressional word warning explanation distinction vague dependent upon nuances scientific opinion unprecedented urged taxpayers ii taxpayers another argument first circuit rejected seventh circuit reach paragraph defines abnormal income income class described paragraph meets certain requirements paragraph lists four classes income provides concluding sentence classification income class described subparagraphs inclusive shall subject regulations prescribed secretary need decide precise effect sentence relied light clear purpose congress enacting cut amount administrative discretion prevailed predecessor section also scope available relief power secretary extend relief far beyond four corners statute may doubted sufficient note unlike predecessor made relief available abnormal income whether specified particular class applies classes specified section apply terms abnormal income contains indication secretary create administrative classifications embracing income even sentence relied gives secretary power expand classes abnormal income somewhat beyond four enumerated statute clearly done regulations specifically provide income sale tangible property arising research development extended period months included list abnormal types income section applicable income may constitute class income purposes section specific exclusion clearly furtherance purpose congress deleting research development income classification abnormal income commissioner effecting congress barred relief type income issue last sentence regulation taxpayers also rely aid provides merely research development income eligible relief properly includible class income otherwise applies held however taxpayers income fall within class therefore judgment appeals seventh circuit must reversed judgment appeals first circuit affirmed ordered footnotes section provides part definitions purposes section abnormal income term abnormal income means income class described paragraph includible gross income taxpayer taxable year subchapter abnormal taxpayer derive income class taxpayer normally derives income class amount income class includible gross income taxable year excess per centum average amount gross income class four previous taxable years taxpayer existence four previous taxable years taxable years taxpayer existence separate classes income following subparagraphs shall held describe separate class income income arising claim award judgment decree interest foregoing income resulting exploration discovery prospecting combination foregoing extending period months income sale patents formulae processes combination foregoing developed period months income includible gross income taxable year rather different taxable year reason change taxpayer method accounting income classifiable one subparagraphs shall classified one taxpayer irrevocably elects classification income class described subparagraphs inclusive shall subject regulations prescribed secretary lay terms polaroid photographic equipment searle drugs probably better called inventions discoveries webster new international dictionary unabridged ed makes distinction one discovers existed remained unknown one invents forming combinations either entirely new attain end means unknown columbus discovered america newton discovered law gravitation edison invented phonograph constitution art cl gives congress power secure inventors exclusive right discoveries terms discover discovery used throughout patent statutes seem generally appear invent invention terms separate meanings see whoever invents discovers new useful process machine manufacture composition matter may obtain patent therefor see dolbear american bell telephone telephone cases section revenue act stat revenue act stat revenue act stat providing case mines oil gas wells discovered taxpayer fair market value property materially disproportionate cost depletion allowance shall based upon fair market value property date discovery revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat revenue act stat section revenue act stat gave commissioner power grant relief case tax owing abnormal conditions affecting capital income corporation work upon corporation exceptional hardship section world war ii law classified specific types abnormal income purposes computing tax provided relief abnormal income whatever class considered general relief section expressly provided world war ii excess profits tax statute stat words used statute meaning used income tax chapter code sess general relief section world war ii act stat amended stat stat stat stat provided adjustments computation base period income taxpayer established among things fair amount representing normal earnings base period fact committee reports state adjustments limited income arising four classes specified subparagraphs sess sess excess profits tax act stat amended stat section defines abnormal income income class includible gross income taxpayer treas reg amended cum bull income within class described subparagraphs section section applicable may grouped taxpayer subject approval commissioner examination taxpayer return classes similar specified subparagraphs section reasonable business type taxpayer conducts appropriate light taxpayer business experience accounting practice income sale tangible property arising research development extended period months included list abnormal types income section applicable income may constitute class income purposes section however section applicable income income otherwise properly includible within class income section applicable example class described section