Pierce Butler

“ The Circuit Court of Appeals states that there is no evidence of double deduction or any specific instance of such deduction. But that absence of proof does not support the judgment. Respondent had the affirmative of the issue, and the burden was on it to show that allowance of the deduction claimed would not amount to twice subtracting the same loss. That is an essential fact which cannot be assumed. Respondent may not rely on mere assertion or speculation. ”

“ From 1920 to 1923, inclusive, respondent, Thane & Co., and the Pacific Lumber Company of Illinois made separate income tax returns and also consolidated returns as affiliated corporations. Their income taxes were paid on the latter basis. In each year respondent had a large net income and Thane & Co. lost heavily; the Pacific Lumber Company of Illinois lost in the first and had relatively small net income in each of the other years. [1] Their separate returns for 1923 respectively showed net income of $1,379,494.78, net loss of $229,942.15, and net income of $8,809.83. ”

“ Treasury Regulations 62 provide: 'Consolidated returns are based upon the principle of levying the tax according to the true net income and invested capital of a single enterprise * * * (Art. 631.) Subject * * * to the elimination of intercompany transactions * * * the consolidated taxable net income shall be the combined net income of the several corporations consolidated.' Art. ”