
    Savannah Ship Chandlery & Supply Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 14805.
    Promulgated October 12, 1928.
    
      T. J. O^Brien, Jr., Esq., for' the petitioner.
    
      T. M. Mather, Esq., for the respondent.
   OPINION.

Phillips :

The respondent takes the position that the profit made by one O’Brien, the president of the taxpayer, on the purchase and sale of certain boats was taxable income to the petitioner. The petitioner contends that these transactions were not made by it or for it and that it had no part in them. The position taken by the respondent appears to be based on the action of O’Brien in sharing these profits with those who were his associates in this corporation. This petitioner appears to have been only one of a number of corporations in which O’Brien and its other stockholders were interested. It was not engaged in the business of buying and selling ships, but in the business of trading in ships’ supplies. It took no part in the transactions which gave rise to the profit which the Commissioner seeks to tax as its income. The distribution made by O’Brien was sufficient to justify inquiry into the relationship which existed between O’Brien, the individuals who shared in the profits, and the various enterprises in which they were interested, for the purpose of learning whether O’Brien was acting for himself, as agent for these individuals, or as agent for one of the corporations. The record before us discloses, however, that whatever may have been the relationship between O’Brien and these individuals, this petitioner was not involved and the gain is not taxable to it.

Decision will be entered for the petitioner under Rule 50.  