(dissenting).
I respectfully dissent. Taxpayer-corporations were engaged in the small loan business. Under Indiana law, these corporations were prohibited from acting as insurance agents. The business of credit insurance was admittedly not the busi.ness of the taxpayer-corporations. None of the insurance premiums, gross or net, were ever entered on the books of ac-' count of any taxpayer-corporation. No amount was paid to any of the taxpayer-corporations during the taxable years either as rent or as reimbursement for office expenses and services, with respect to the writing of insurance in their offices.
Title 26 U.S.C. § 162(a) provides for a deduction of “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business * * *.” But the credit insurance business is not conducted completely without expense. In my view, taxpayer-corporations cannot properly claim deductions for subsidizing the business of another. The finding of the Tax Court as to disallowable expenses is not clearly erroneous.
The Tax Court held that a portion of the general overhead expenses of each taxpayer-corporation was attributable to the handling of the insurance business and was therefore not attributable to the carrying on of the small loan business. This was certainly a correct conclusion.
As the taxpayers had not produced any accounting cost records from which a more accurate determination could be made, the Tax Court was forced to rely on the Cohan rule. Cohan v. Commissioner of Internal Revenue, 2 Cir., 39 F.2d 540, 544. That is, to “make as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making.”
In my view, the Tax Court adopted a very reasonable formula. It decided that 50% of the gross commissions of the insurance business should be deducted. In my view, this was reasonable. I would affirm the Tax Court.