Lake Erie & P. R. Co. v. Commissioner

Disney, /., dissenting: The majority opinion seems to me to be necessarily and essentially based upon the statement made in the opinion that “The stockholders of the New York Central are not the ‘same interests’ as the stockholders of Pennsylvania.” I do not find a finding of fact to that effect. Since section 45 of the Internal Revenue Code authorizes the Commissioner to allocate income or deductions between corporations “owned or controlled directly oc indirectly by the same interests,” in the absence of a finding negativing such ownership or control, by the same interests, of petitioner corporation and the other corporations herein involved, we do not seem to me to be justified in concluding that the Commissioner erred in making the allocation. So far as the record shows — and certainly we can not take judicial notice in this respect — the two corporations which own the petitioner may be owned or controlled by the same interests. I would sustain the Commissioner for lack of evidence. I therefore dissent.