dissenting: The “ gains or profits ” of the petitioner in question here were “ permitted to accumulate beyond the reasonable needs of the business; and hence we have prima facie evidence of a purpose to escape the surtax.” Sec. 220 (b), supra. No evidence has been presented which is adequate to overcome the prima facie evidence or the defense thereby established for the respondent. Obviously, a prima facie showing of this character cannot be overcome by the very same evidence which, under the very same subsection of the statute, establishes it. Furthermore, in addition to this prima facie evidence, there likewise appears from the majority report other evidence which supports the position of the respondent in this respect. To illustrate: Harry 0. Fisher, who at all times in question here owned at least 98 percent of the petitioner’s stock, at the outset did not consider the formation of petitioner necessary, and after its incorporation he did not consider the accumulation of the surplus in question necessary; the corporation conducted its business successfully during the years in question without the stockholders ever paying in any cash to the corporation for its stock; at the end of 1927 Harry C. Fisher owed the petitioner $73,627.27 and his account was, in reality, also heavily overdrawn in 1926; none of the surplus was ever actually used for any of the alleged purposes for which it was accumulated; and it was actually used, promptly after 1927, for wholly different purposes and primarily, if not exclusively, to the personal advantage of Harry C. Fisher.
All of the foregoing applies to the accumulations of surplus by petitioner (1) in the unsuccessful attempt to curb the extravagant expenditures of Harry C. Fisher, (2) in the unsuccessful attempt to make a capital investment in a minority interest in the New York World, and (3) in the attempt at preparation to meet imaginary contingencies, which might have arisen if the Bell Syndicate, Inc., had breached its contract or if Wheeler, its president, had severed his connection with it. There is no showing of a breach of contract on the part of the Bell Syndicate, Inc., or that such breach was ever imminent. The only showing made in this respect is to the contrary. The same is true of Wheeler’s severance of his connection with the Bell Syndicate, Inc. There is no adequate showing that the accumulation of surplus in question would have been nec*221essary or adequate if contingencies had arisen because of a breach of contract by the Bell Syndicate, Inc., or Wheeler’s severance of his connection with it. There is some showing that they would not have been necessary or adequate if either or both events had occurred to create contingencies.
In connection with what is said herein, see the dissent in Cecil B. DeMille, 31 B. T. A. 1161. See also William C. DeMille Productions, Inc., 30 B. T. A. 826.
It is well settled that a corporation is an entity, distinct, separate, and apart from its stockholders and each of them, even where it is almost wholly owned and completely controlled by a single stockholder, as petitioner was by Harry C. Fisher. Edward Securities Corporation, 30 B. T. A. 918, and cases cited therein. Hence the personal affairs and business of Harry C. Fisher were not those of the corporation. To the extent that the corporation participated in his personal affairs and business it stepped out of its own business. Its business, as actually carried on, at all the times material here, was that of furnishing to the Bell Syndicate, Inc., exclusively, drawings for the Mutt and Jeff cartoons for sale and distribution, by the latter, to newspapers. While Harry C. Fisher was the originator of these cartoons, he did not even make any of the drawings for them in the years before us. To the extent that the petitioner corporation participated in an unsuccessful attempt to curb Harry 0. Fisher’s extravagant personal expenditures by accumulating its surplus, and this is the underlying, controlling reason why “ the gains or profits ” were “ permitted to accumulate ”, it was concerned with his personal affairs and business and was not confined to its own business; and hence what it did in this respect was “ beyond the reasonable needs of the business ” and “ is prima facie evidence of a purpose to escape the surtax ”, under applicable provisions of the statute. It is unnecessary to pass upon the question as to whether what petitioner did in these respects was ultra vires. That it was “ beyond the reasonable needs of the business ” is sufficient to establish a prima facie case for the respondent, without other grounds; but, as heretofore indicated, there are other grounds.
I also find it unnecessary to pass on the question as to whether the petitioner was “ formed ” for the purpose denounced by the statute. To sustain respondent’s position in these respects it is sufficient that it was “ availed of ” for that purpose; and the inescapable conclusion is that it was thus “ availed of.” Sec. 220 (a), supra.
Since this prima facie case for respondent has not been overcome, as heretofore stated, I can not agree with the majority in so far as they hold that any of the “ additional ” taxes in question herein,' as specified in section 220 (b), supra, are not to be imposed.