
    R. H. Comey Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 25125.
    Promulgated June 10, 1929.
    
      Isaac Siegel, Esg., and Jacob H. Corn, Esq., for the petitioner.
    
      II. LeRoy Jones, Esq., for the respondent.
   OPINION.

Smith:

The petitioner contends that it is entitled to deduct as a bad debt loss the amount of $45,860.52 representing a partial cancellation of the indebtedness of its subsidiary company, the St. Louis Comey Co., for monies loaned and advanced to it.

• We have heretofore held in numerous cases that intercompany transactions of this character between affiliated corporations filing a consolidated tax return do not result in a deductible loss to one of such corporations. See Gould Coupler Co., 5 B. T. A. 499; Hatzel & Buehler, Inc., 10 B. T. A. 993; and others. See, also, Utica Knitting Co. v. United States, Court of Claims, decided May 6, 1929, and cases therein cited.

The theory upon which such losses are denied to one of an affiliated group of corporations is that the result of all intercompany transactions must necessarily be reflected in the consolidated return on which the affiliated companies are entitled to report their income. There is no evidence before us that the respondent in his audit of the consolidated return filed by the petitioner and the St. Louis Comey Co. for the taxable year involved in this proceeding did not make proper allowance for all losses sustained during the taxable year by the affiliated group.

Judgment of dismissal for 19M and judgment for the respondent for 19M will he entered.  