Adam, Meldrum & Anderson Co. v. Commissioner

Smith,

dissenting: The applicable taxing statute permits a corporation to deduct from gross income “ all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” The petitioner, operating a department store in Buffalo, New York, made certain payments in 1928 to certain charitable institutions which it charged on its books of account as advertising expenses and deducted from gross income in its tax return as ordinary and necessary expenses. The evidence shows that the payees were customers of the petitioner and that the pay*426ments were…