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XIV, (7) The Commissioner's interpretation of the rather com-
plicated provisions of Section 122, sustained by the
Court, is in accord with the decision of the Tax Court
in the case of Louisiana Delta Hardwood Lumber
Co. v. Commissioner of Internal Revenue, 7 T. C.
994, in which the facts were similar to those in the
instant case. Id.
Internal Revenue Emm 670.
XV. (8) The purpose of the statute, as revealed by its legisla-
mulated earnings and profits, and if such provision
was in effect prior to May 1, 1936. Id.
Internal Revenue Con 763.
XVIII. (11) Under tbe relevant Tennessee statute & corporation is
permitted to pay dividends if the net earnings of
the corporation for the current year were sufficient
to take care of them or if the surplus of the corpora-
tion's assets over its liabilities was sufficient to do
so (Section 3737, Williams Tennessee Code Anno-
tated, 1934). The statute permitted the payment
of dividends out of surplus, or if there was no sur-
plus, out of current earnings, or vice versa. Id.
Corporations on 152.
XIX. (12) In two suits for the recovery of income taxes and
interest paid for the year 1941 by and on behalf of
William E. Skeeles and his wife, Anne C. Skeeles,
where the taxpayers each claimed recovery of income
taxes and the interest paid on the deficiencies as-
serted against each for the year 1941, together with
interest thereon as provided by law; and where the
community income and losses were derived from
gambling operations engaged in by the husband as
his regular business; it is held that the amounts
claimed as deductions, being gambling losses in
excess of gambling gains, were properly disallowed
and plaintiff is not entitled to recover. Petitions in
both cases dismissed. Skeeles, 362.
Internal Revenue Cum 606.
XX. (13) Losses from wagering transactions in excess of the gains
from such transactions during the years 1940 and
1942 are not net operating losses for each of these
years within the meaning of the term in Section
122 (a) of the Internal Revenue Code (26 U. S. C.
122) which under subsection (b) can be carried over
and carried back to the year 1941 and allowed as
deductions in computing taxable income for the year
XXI. (14) Where plaintiff contended that since gambling was the
business of her husband and that losses sustained in
1940 and 1942 were business losses deductible under
Section 23 (e) (1) and as such could be offset against
118 C. Cls.
gambling gains in 1941 as a carry-over from 1940 and
as a carry-back from 1942; it is held that Section
23 (h), applying specifically to wagering losses, limits
the general provisions in Section 23 (e) (1). Id.
Internal Revenue Cm 606.
XXII. (15) Where taxpayer corporation, operating at a loss,
secured from trade creditors cancellations of a
portion of their claims pursuant to a plan of reorgan-
ization and installation of new management, the
cancellations were properly regarded as income by
the Commissioner of Internal Revenue, and plaintiff
is not entitled to recover. Helvering v. American
Dental Co., 318 U. S. 322, distinguished. Marshall
Drug Company, 532.
Internal Revenue Com 313.
See Report To Senate I, II; Suit For Salary XV.
See Contracts XIV.
TRADING WITH THE ENEMY ACT.
See Jurisdiction III.
TRANSPORTATION OF GOVERNMENT PROPERTY.
I. In two suits against the Government for $6,174.49,
one involving furnishing water and meals to Army
personnel on maneuvers and the other involving
freight charges for transportation of Government
property, where liability is admitted by the defend-
ant which claims a set-off of an equal amount on
account of destruction of the Government property
by fire of unknown origin while in the hands of the
plaintiff railroad; is held that on the evidence the
Government has made out an unrefuted case that
would have entitled it to judgment had it been the
plaintiff. The Government having established
its right to a set-off in the amount of the plaintiff's
claim, the plaintiff is not entitled to recover and the
petition is dismissed. Atchison, Topeka and Santa
Fe Railway Company, 194.
Carriers Com 134.
II. In the instant case the Government was not the
shipper, as shown by the bill of lading issued to the
Goodyear Aircraft Corporation as consignor, which
TRANSPORTATION OF GOVERNMENT PROPERTY-Con.
filed its own suit for damages covering only its own
losses, no claim being asserted for the equipment
belonging to the Government and destroyed by
fire. The Goodyear Corporation prevailed in that
suit, and its claim, for its own property was paid by
the railroad. The Government did not choose to
file its own suit but asserted its common right as &
creditor to apply unappropriated moneys of a
debtor, in its hands, in the extinguishment of the
debts due to it. The plaintiff sues to recover the
amount so withheld. Id.
Carriers Con 76.
III. The facts not being in dispute, it is held that the rail-
road stood in the relation of common carrier to the
Government so far as the transportation of Govern-
ment property was concerned, and is liable to the
Government as an insurer under the carrier's con-
tract to carry safely, notwithstanding the fact that
the carrier did not know it was transporting property
belonging to the Government. Id.
Carriers Com 110.
IV. The bill of lading accurately, although in general
terms, described the entire shipment as "airplane
parts.” There was no duty on the part of the Good-
year Corporation, as the shipper, to disclose the
Government ownership of any or all of the parts nor
is it important who owned them at the time of ship-
ment so long as the railroad was not deceived regard-
ing its cargo and suit is maintained by one having a
sufficient interest in the cause and so long as the
carrier is not subjected to double recovery for the
same loss, which is not asserted in the instant case.
See Overtime Pay IX.
UNITED STATES SENATE, AWARD BY.
See Indian Claims XVII, XVIII, XIX, XX, XXI, XXII.
See Suit for Salary XIII, XIV, XV, XVI, XVII.
WAGE BOARD EMPLOYEES.
See Overtime Pay VI.