The opinion
GoodRich,
dissenting: Respondent has allocated to petitioner as its income a profit derived by a foreign corporation upon a sale consummated outside the United States. That is too great a stretch even for the apparently limitless discretionary powers granted by section 45.
His action results in taxing income realized by a foreign corporation from sources without this country, which may not lawfully be done. See sections 231, 119 (c), Revenue Abt of 1928.
No part of the profit on the second sale was received by petitioner. Consequently, to allocate that profit to it does not, in fact, clearly reflect its income.
To hold this profit the income of petitioner is to say that one may not sell except at a profit, if profit be possible. That is not good law. Taplin v. Commissioner, 41 Fed. (2d) 454; Commissioner v. Van Vorst, 59 Fed. (2d) 677; Iowa Bridge Co. v. Commissioner, 39 Fed. (2d) 777; United States v. Isham, 17 Wall. 496 .
Moreover, I doubt whether section 45, at least so far as it serves as a basis for respondent’s action in this case, is constitutional, within the Fifth and Fourteenth Amendments. See Hoeper v. Tax Commission of Wisconsin, 284 U. S. 206 ; Heiner v. Donnan, 285 U. S. 312 .