S. E. & M. E. Bernheimer Co. v. Commissioner

Leech,

dissenting and concurring: On the first point I respectfully dissent. Taxes, like any other obligation, are accruable by a taxpayer on the accrual basis when they become “due and payable.” Any other conclusion would permit the double deduction of taxes by a grantor of real estate on the accrual basis and a grantee on the cash basis — an anomalous and impossible result. The contested taxes did not become “due and payable” until after September 30, 1935. See I. T. 2834 (C. B. XIII-2, p. 189, 1934). It follows that these taxes were not accruable and, therefore, not deductible for the period ending October 1,1935.

I concur with the result the majority reaches on the second point, on the ground that the amounts in controversy, if not deductible as taxes accrued, were so, at least, as ordinary and necessary expenses of the taxpayer.

Black and Offer agree with this dissent.