Petition for Review of Decision of the United States Board of Tax Appeals.
Before SPARKS and ALSCHULER, Circuit Judges, and BRIGGLE, District Judge.
Petitioners and various other affiliated corporations filed through the parent corporation a consolidated tax return for the fiscal and taxable year ending April 30, 1930. The Commissioner determined a deficiency of $1,958.47, due to the disallowance by the Commissioner of certain losses of the Canadian subsidiaries of petitioners. The parent and some of the affiliated companies later became involved in bankruptcy and receivership proceedings, but those appealing are not so involved.
In their petition to the Board of Tax Appeals, petitioners alleged two errors of the Commissioner:
First. That the Commissioner erred in allowing insufficient rates of depreciation on certain properties of the taxpayers for the taxable year in question.
Second. That the Commissioner erred in failing to allow petitioners certain losses sustained by their Canadian subsidiaries.
On the first point the Board found in favor of the taxpayers and ordered that they be allowed increased depreciation at certain rates then determined. Responsive to the Board's decision the respondent redetermined the taxpayers' liability on account of this error and filed with the Board a statement showing an overassessment of $6,164.43, and that timely claim for such refund had been made. The Board failed to enter an order of overpayment as thus determined apparently for the reason that the parent corporation, the Booth Fisheries Company of Delaware, was not a petitioner before the Board.
No question is raised concerning the redetermination in regard to the overassessment except that petitioners assert that the Board should have directed return theeeof to the Booth Fisheries Company of Ohio in pursuance of designation of the Ohio corporation as agent. This designation was executed by the parent corporation by its trustee in bankruptcy and by all other subsidiaries*fn1
Paragraph (a) of Article 16, Regulations 75 of the Treasury Department provides that the parent corporation shall, for all purposes in respect of the tax for the taxable year for which a consolidated return is made, act for the subsidiaries including claims for refunds. It recites that "refunds will be made directly to and in the name of the parent and will discharge any liability of the Government in respect thereof to any such corporation. * * *"
Paragraph (c) of this same Article is as follows:
"In the event that the parent corporation is contemplating dissolution, or is about to be dissolved, or if for any other reason its existence is about to terminate, it shall be its duty forthwith to notify the Commissioner of such fact and to designate another agent to act as agent in its place, to the same extent and subject to the same conditions and limitations as are applicable to the parent corporation."
It was pursuant to these provisions that the parent company filed the original claims for refund with the Commissioner on behalf of all the subsidiaries, and later upon the contemplated termination of the existence of the ...