W. M. Ritter Lumber Company, Petitioner, et al., v. Commissioner of Internal Revenue, Respondent

W. M. Ritter Lumber Company, Petitioner, et al., v. Commissioner of Internal Revenue, Respondent. Docket Nos. 42833-42836, 43604-43606, 48749, 57319-57322. Promulgated September 30, 1935. J. S. Seidmam, Esq., and Frank E. Seidhnan, G. P. A., for the petitioner. Philip- M. Olark, Esq., and Stanley B. Pierson, Esq., for the respondent. [MAJORITY — Leech :] supplemental opinion. Leech : On March 31, 1934, the Board promulgated its opinion in the above entitled proceedings, reported at 30 B. T. A. 231, decision thereunder to be entered pursuant to Rule 50. To date, neither party has submitted a proposed redetermination as provided for by Rule 50, and the Board has not entered its final decision. Issue No. 9 involved, inter alia, the question of the application of the net losses of the Red Jacket Jr. Coal Co. (referred to as the Jr. Co.) for 1924 and succeeding years. Upon authority of prior decisions, the Board held (first paragraph at top of page 269 of the published report) that the two fractional parts of the calendar year 1924, the period prior to and the period subsequent to affiliation, each constituted a “ taxable year ” within the meaning of section 206 (b) of the Revenue Acts of 1924 and 1926. Such holding is directly contrary to the recent decision of the Supreme Court in Helvering v. Morgan's, Inc., 293 U. S. 121. Upon authority of that decision, we hereby modify the above mentioned paragraph of the reported opinion to now hold, that, as to the Jr. Co., the two periods, January 1 to July 31, 1924, prior to affiliation, and August 1 to December 31, 1924, during affiliation, together constituted one taxable year, the calendar year 1924, in applying any of the Jr. Co.’s net losses to its own net income. In all other respects, the reported opinion stands as that of the Board.