OPINION.
Littleton:In its petition taxpayer alleges error on the part of the Commissioner in failing to deduct either the net loss for the 11-month period ended October 31, 1919, or, as an alternative, that of the 12-month period ended November 30, 1919, from the net income of the fiscal year under consideration and with respect to which the Commissioner has determined a deficiency.
One of the alleged facts upon which taxpayer relies in support of its allegation of error is that, in the month of July, 1919, it requested *343permission from tbe Commissioner to change its accounting period from one ending on November 30 to another ending on October 31, and that such permission was granted. In his answer the Commissioner denies that permission was granted the taxpayer to change its fiscal closing from November 30 to October 31. No evidence was adduced by either party upon this point.
Under the provisions of section 212 (b) of the Revenue Act of 1918, where a taxpayer changes its annual accounting period from one fiscal year to another, the net income must, with the approval of the Commissioner, be computed on the basis of such new accounting period. We interpret that section as requiring the taxpayer to secure the approval of the Commissioner to a computation of its net income upon the basis of the new accounting period as a condition to the filing of a return for that period. Appeal of The Clendening Co., 1 B. T. A. 622.
In this appeal we have no evidence that the Commissioner approved the change in the accounting period. On the other hand, the Commissioner expressly denies that he extended such approval. We are forced, therefore, to conclude that the taxpayer did not, with the approval of the Commissioner, change its accounting period to enable it to make a return for the 11-month period ended October 31, 1919, and that the net loss for the taxable year 1919 must be computed upon the basis of the full 12-month period ended November 30, 1919, such period being the only fiscal year which the taxpayer'has established under the provisions of section 212(b).
The taxpayer sustained a net loss of $19,265.97 for the 12-month period ended November 30, 1919, which, under the provisions of section 204 of the Revenue Act of 1918, it is entitled to have deducted from the net income of the fiscal year ended November 30, 1918, and it is entitled to have its tax liability for the latter year redetermined accordingly.
In view of the foregoing we find it unnecessary to pass upon the contention of the Commissioner that the provisions of section 204 (a) of the Revenue Act of 1918 are inapplicable to a period of less than 12 months.