Stearns Magnetic Mfg. Co. v. Commissioner of Internal Revenue. Commissioner of Internal Revenue v. Stearns (Two Cases)

LINDLEY, Circuit Judge.

We have heretofore directed that these three petitions to review decisions of the Tax Court, filed under Section 1141(a) of the Internal Revenue Code, 26 U.S.C.A. § 1141(a), be consolidated for hearing and decision. In the first, the corporate taxpayer, Stearns Magnetic Manufacturing Company, attacks a decision that certain royalties paid by it in the years 1943, 1944 and 1945 for the use of a patent owned by its two stockholders and leased to it were not allowable as deductions in determining its taxable income. In the other two, the Commissioner seeks review of…