Daily Tel. Co. v. Commissioner

TURNER,

dissenting: The petitioner rests its claim of reorganization on the allegation that substantially all of its assets were acquired by the Press-Telegram Publishing Co. within the meaning of clause (A) of section 203 (h) (1) of the Revenue Act of 1924. In my opinion, however, it has failed to prove that substantially all of its assets were so acquired. The essential facts, if known at all, are necessarily within the knowledge of petitioner, its officers, and stockholders, but the proof on this point is limited entirely to the statement of S. S. Conklin that the property retained consisted of “a few thousand dollars in real estate properties and some worthless bonds.” It is said that Conklin was one of the two owners of petitioner and was also a party to the agreement. From this it is inferred that it was competent for him to express an opinion as to value. While that may be true, it is also to be remembered that Conklin, being one of the parties in interest, is seeking to invoke one of the exempting clauses of the income tax statute to his own benefit. If he was sufficiently informed to determine the value of the real estate and bonds, it would have been a simple matter to have supplied the facts from which we could have formed an opinion as to whether the properties were substantial or negligible.

*108It is stated in the majority opinion that the “term ‘substantially all’ is a relative term, dependent on the facts of any given situation” and that “what might in one case, with a certain total of property involved, constitute substantially all of such property, might be a small part of the total property involved in another case.” With this statement I am heartily in accord. It gives the strongest support to the view here expressed, that the petitioner has not given us “facts” in this “given situation” which will show on which side of the equation this case falls. If the petitioner is to receive the benefit sought, which is the nonrecognition of the gain from the exchange of property, it has the burden and duty to give us sufficient facts to show that the transaction in question meets the test of the statute. “A few thousand dollars in real estate” is indefinite and that expression used by one individual and in connection with one transaction rather than another might well indicate a very substantial amount. We have no way of knowing what the situation would be in this case if we had the facts before us which the petitioner had the burden of presenting if it expected to prevail in its contention that substantially all of its properties were acquired by the Press-Telegram Publishing Co.

In my opinion, any finding in this case that substantially all of petitioner’s assets were acquired by the Press-Telegram Publishing Co. must be based entirely upon an assumption as toi what was in the mind of the witness rather than upon facts presented and from which a conclusion might be drawn.

McMaiioN and Leech; agree with this dissent.