When the 1939 Code was superseded by the Internal Revenue Code of 1954, the provisions referred to in the preceding sentence were incorporated without substantial change in Sections 901 and 903 of the 1954 Code ( 68A Stat. 285, 287). In the case of Prudential Insurance Company of America v. United States, 319 F.2d 161, 162 Ct.Cl. 55 (1963), this court found that under the pertinent Canadian statutes, Prudential in 1949 was excused from paying the respective income taxes imposed by the Dominion of Canada, and by Ontario and Quebec on the net income or net revenue of corporations, but that Prudential was required to pay, and did pay to each of these jurisdictions a tax measured by a fixed percentage of total life insurance premiums received therein. The court concluded that the taxes on insurance premiums which Prudential paid to the three Canadian jurisdictions came within the meaning of the phrase, "a tax paid in lieu of a tax upon income," as used in Section 131(h) of the 1939 Code, as amended, and that plaintiff was entitled to utilize the premiums taxes paid in Canada as a credit against its 1949 United States income tax.

"§ 901. Taxes of foreign countries and of possessions of United States. Both parties agree that this question has been thoroughly and exhaustively considered and dealt with by this court with respect to mutual life insurance companies doing business in Canada in the following cases: Prudential Ins. Co. of America v. United States, 319 F.2d 161, 162 Ct.Cl. 55 (1963); Prudential Ins. Co. of America v. United States, 337 F.2d 651, 167 Ct.Cl. 598 (1964), cert. denied, 386 U.S. 1018, 87 S.Ct. 1375, 18 L.Ed.2d 457 (1967); Equitable Life Assurance Soc'y of the United States v. United States, 366 F.2d 967, 177 Ct.Cl. 55 (1966), cert. denied, 386 U.S. 1021, 87 S.Ct. 1375, 18 L.Ed.2d 457 (1967); Metropolitan Life Ins. Co. v. United States, 375 F.2d 835, 179 Ct.Cl. 606 (1967). In each of these cases, the Canadian premiums taxes were allowed as a credit on income taxes due the United States by mutual life insurance companies.

A review of section 131(h) cases before this court reveals the court's substantial agreement with the design of the requirements set forth by the above Treas. Reg. 111, § 29.131-2 (1939). In Prudential Ins. Co. of America v. United States, 319 F.2d 161, 162 Ct.Cl. 55 (1963), the taxpayer insurance company paid a 2-percent tax imposed by the Dominion of Canada and two provinces on the insurance premiums collected during the year from Canadian policyholders. The court succinctly stated its reason for holding that the premium tax was a tax in lieu of an income tax: "* * * plaintiff was excused from paying the Ontario tax calculated on the net income of corporations because it was an insurance company paying a premiums tax under another section of the same statute."

UNPAID LOSSES The scope of the term "unpaid losses" has been previously considered in Prudential Ins. Co. of America v. United States, 319 F.2d 161, 165-166, 162 Ct.Cl. 55, 65 (1963). There, the Court of Claims specifically held that the term "unpaid losses" as used in section 806 includes accrued but unpaid liabilities, in addition to similar unaccrued claims.

Defendant would have us delete or ignore the clear language of the statute. We must adhere to the rule stated in Prudential Ins. Co. of America v. United States, 162 Ct.Cl. 55, 319 F.2d 161 (1963): "It is fundamental that an unambiguous statute should be given effect according to its plain and obvious meaning". 162 Ct.Cl. at 65, 319 F.2d at 166.

This is the fourth time in as many years that we are called upon to consider the application of the foreign tax credit (Sec. 131 of the Internal Revenue Code of 1939; Sections 901, 903 of the Internal Revenue Code of 1954) to the Canadian premiums taxes on mutual life insurance companies. See Prudential Ins. Co. of America v. United States, 319 F.2d 161, 162 Ct.Cl. 55 (1963); Prudential Ins. Co. of America v. United States, 337 F.2d 651, 167 Ct.Cl. 598 (1964), pending on petition for a writ of certiorari, 386 U.S. ___, 87 S.Ct. 1375, 18 L.Ed.2d 457 (filed March 30, 1967); Equitable Life Assurance Society v. United States, 366 F.2d 967, 177 Ct.Cl. ___, 386 U.S. ___, 87 S.Ct. 1375, 18 L.Ed.2d 457 (Oct. 1966), pending on petition for a writ of certiorari, (filed March 13, 1967). In that series of decisions we held that various of these premiums taxes imposed by the Dominion, Ontario, and Quebec for 1949 through 1956 were paid "in lieu of a tax upon income" and were therefore available for the foreign tax credit.

Section 131(h) of the 1939 Code, the precursor of section 903 of the 1954 Code, defined the term income taxes as used in section 131(a) as including a tax paid in lieu of a tax upon income imposed by such foreign country. It is plaintiff's contention in this case that premiums taxes paid by it to the Provinces of Ontario and Quebec and to the Dominion of Canada constituted a tax paid in lieu of an income tax, and therefore, that plaintiff should have been entitled to a credit on its United States income taxes. This court in Prudential Insurance Company of America v. United States, Ct.Cl., 319 F.2d 161, decided June 7, 1963, a case involving the same parties and identical issue, but pertaining to a different tax year (1949), held that such premiums payments were indeed taxes paid in lieu of income taxes. It remains for us now, in this case, to examine the applicable Canadian statutes from the years 1950 to 1956, and compare them to the statutes in effect in 1949, the year in issue in the previous Prudential case. If such a comparison shows the statutes to be identical or substantially the same, and if defendant has shown no changes in related factors or circumstances we must, under the well established rule of stare decisis, grant plaintiff's motion. If, on the other hand, the statutes are not the same, or if defendant has effectively shown the existence of certain related factors not known at the time of the previous case, then such nuances and/or new evidence must be evaluated before final disposition of these motions.

Here again we have no statutory declaration of intention, but it seems clear, for the reasons discussed with respect to the Quebec tax, that the Dominion of Canada premiums tax was imposed in lieu of the general income tax, from which the plaintiff was expressly exempt. In Prudential Insurance Company of America v. United States, 319 F.2d 161 (Ct.Cl. 1963) the court had before it almost the identical problem as it related to the year 1949 and concluded that taxes on insurance premiums paid to the Canadian jurisdictions came within the meaning of the phrase "tax paid in lieu of a tax upon income". Subsequently the same court in Prudential Insurance Company of America v. United States, 337 F.2d 651 (Ct.Cl. 1964) again considering the foreign tax credit issue (this time with respect to the years 1950 through 1956) came to the same conclusion.

Petitioner further argues that several of the foregoing decisions are not controlling in the present case because they address provisions of the 1939 Code, rather than long-term capital gain considerations under section 1232 and the last sentence of section 804(b). See General American Life Insurance Co. v. Commissioner, supra; see also Prudential Insurance Company of America v. United States, 162 Ct. Cl. 55, 319 F.2d 161 (1963). However, each of the foregoing decisions consistently holds that, with respect to the substance of the payments involved, prepayment penalties attributable to mortgage loans represent interest substitutes or additional mortgage loan fees and, consequently, constitute ordinary income.

Respondent counters by arguing that the language of section 83 ("determined without regard to any restriction") is clear and plain and, therefore, section 83 encompasses restrictions imposed by law as well as those imposed by contractual agreement. He relies upon the proposition set forth in Prudential Insurance Co. of America v. United States, 319 F.2d 161 (Ct.Cl. 1963), wherein the Court stated: It is fundamental that an unambiguous statute should be given effect according to its plain and obvious meaning, Bate Refrigerating Co. v. Sulzberger, 157 U.S. 1, 36-37, 15 S.Ct. 508, 39 L.Ed. 601 (1895); Christner v. Poudre Valley Cooperative Ass'n, 235 F.2d 946, 950 (10th Cir., 1956).