Novelty Mfg. Co. v. Commissioner

*677OPINION.

Love :

Section 240 (b) of the Revenue Act of 1918 reads as follows:

Sec. 240. (b) For the purpose of this section two or more domestic corporations shall be deemed to be affiliated (1) if one corporation owns directly or controls through closely affiliated interests or by a nominee or nominees substantially all the stock of the other or others, or (2) if substantially all the stock of two or more corporations is owned or controlled by the same interests.

The petitioners herein have failed to prove that they were affiliated during the years 1919 and 1920.

The record is silent as to the stock ownership of the Novelty Company. Likewise it is silent concerning the ownership of the stock of the Climax Company, other than the 200 shares held by E. K. Hood and later by his widow, during the years in question. Nowhere is it shown that one of the corporations owned or controlled substantially all of the stock of the other; nowhere is it shown that substantially all of the stock in both corporations was owned or controlled by the same interests.

The burden being on the petitioners to prove by competent evidence that they were during the years in question affiliated under the terms of the statute, and having failed to meet that burden, we can only approve the respondent’s determination.

Judgment will be entered on 15 days’ notice, v/ndev Rule 50.

Considered by Teusbell and Littleton.