A Connecticut district judge ruled against the Internal Revenue Service and ordered the agency to refund more than $62 million to a General Electric subsidiary stemming from a transaction that the IRS said was a sham.

TIFD III-E Inc., a wholly owned subsidiary of the General Electric Capital Corp., won its lawsuit to recover some $62 million that it had deposited with the IRS to satisfy an alleged tax liability that arose from an IRS determination that the company had incorrectly calculated and reported the amount of income that it earned from 1993 to 1998 as a partner in Castle Harbour-I LLC, a commercial aircraft-leasing partnership created by GE to reduce GECC's risk in the aircraft leasing business.

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