Louis Brandeis

“ This Court, upon consideration of the facts stipulated by the parties and found by the Board, holds that respondent was taxable upon the full amount of the item of cash received but no upon the stock dividend. But, because the Commissioner took no appeal from the order of the Board, the Court declines to give any effect to its ruling that the cash is taxable income in 1931. If the Commissioner had sought only to increase the deficiency found by the Board, it may be conceded that the point would be well taken, but such is not his purpose. ”

“ The Board held that this stock dividend redeemed in 1931 at $100 per share was taxable in the year 1928 when received and was therefore not taxable under section 115 (g) ; that it had a basis for gain or loss of $100 per share; and that therefore there was no taxable income from the redemption. The Commissioner did not file a cross-appeal. By the provisions of section 115 (g) the proceeds of the redemption of the stock can be taxed only if it occurs at such time and in such manner as to make the redemption essentially equivalent to the distribution of a taxable dividend. ”

“ The circumstance that the Board, by the erroneous application of a rule of law to the facts before it arrived at a deficiency which is sustained by a correct application of a different rule, is not ground for setting aside its order. ”