
    R. A. Rowan & Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 14815.
    Promulgated October 12, 1928.
    
      ■Ralph W. Smith, Esq., for the petitioner.
    
      Shelby S. Faulkner, Esq., for the respondent.
   OPINION.

Milliken :

This cause was submitted on the protest which petitioner filed with the respondent at a time prior to the issuance of the 60-day letter setting forth the deficiency here in question. From that protest the parties stipulated we might find the facts. This we have done.

We have not been supplied with copies of any of the deeds or pleadings in the suit instituted by Mrs. Donovan and are accordingly unable to determine the nature of the cause of action instituted by her particularly against the petitioner. From the facts as we have found, we see no necessary connection between the profit derived from the sale of the real estate and the compromise settlement, so that one could be offset against the other, and the profit derived by the corporation on the sale of the building in question excluded from income for the year 1920. We do not know the basis of the settlement made in 1921 with Mrs. Donovan or whether any sum was paid her specifically by reason of the investment which petitioner induced her to make. We do not know whether the petitioner admitted any liability in the year 1919 or 1920 to Mrs. Donovan by reason of the suit which she had instituted. The petitioner might have litigated with Mrs. Donovan and defeated her or settled with her on a basis having no relation to the particular property sold and which forms the basis for the deficiency asserted by the respondent.

Upon the meager, facts before us we are of the opinion that petitioner derived income from the sale in the year 1920, in the amount determined by the respondent.

Judgment will be entered for respondent.  