Commissioner v. Southwest Consol. Corp.

FOSTER, Circuit Judge.

Respondent, Southwest Consolidated Corporation, acquired all the assets of Southwest Gas Utilities Corporation, in June, 1934, through the medium of a bondholders’ committee in a reorganization to which *562both corporations were parties. In making returns for income and excess profit taxes for 1934 and 1935 respondent claimed losses for certain worthless assets charged off and took the cost of the assets to the old corporation as a basis for determining loss or gain. The Commissioner disallowed the deductions; held there had been no tax exempt reorganization; that the…