Appeal of Philip Kobbe Co.

*664OPINION.

GRben

: The parties agree that a. loss was sustained in 1919 and agree upon the amount. The issue is whether such a loss, arising as above set out, may be included in the computation of the statutory net loss for the taxable year. The Commissioner’s contention is that the loss is not within the provisions of section 204(a) (1) of the Revenue Act of 1918, which section reads, in part, as follows:

Sec. 204(a) That as used in this section the term “net loss” refers only to net losses resulting from either (1) the operation of any business regularly carried on by the taxpayer, * * *.

To us it appears that the business regularly carried on by the taxpayer was that of advertising, and that in furtherance of such business it purchased the stock of the Chase-0 Manufacturing Co. The evidence shows that scant, if any, consideration was given to the value of the stock and that it was purchased only for the purpose of procuring valuable advertising contracts. We are of the opinion that the loss is within the provisions of section 204(a) and that the Commissioner erroneously excluded it in his computation of the statutory net loss.

Judgment for the petitioner..