U.S. Supreme Court BUS & TRANSPORT SECURITIES CORPORATION v. HELVERING, 296 U.S. 391 (1935)

[Page 296 U.S. 391, 392]

Mr. Albert E. James, of Washington, D.C., for petitioner.

The Attorney General and Mr. J. Louis Monarch, of Washington, D.C., for respondent.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Petitioner, Bus & Transport Securities Corporation, challenges a deficiency income tax assessment for 1929, and says that the transaction from which the alleged taxable gain arose was reorganization within section 112, Revenue Act, 1928, 45 Stat. 816, 26 U.S.C.A. 112 and note. Paragraphs (b)(4), (i)(1), and (i)(2), are specially relied upon. [Footnote 1]

[Page 296 U.S. 391, 393]

Co-ordinated and Transport Company became owner of all shares of A and B corporations. Through these manipulations, the projector obtained indirect control of corporations A and B and the lines which they operate.

The Commissioner, the Board of Tax Appeals, and the Circuit Court of Appeals all rightly concluded that petitioner was not party to a reorganization within the statute. Certain corporate shares owned by it were exchanged for shares which another corporation owned. Neither party to the exchange acquired any definite immediate interest in t e other. Nothing here, we think, even remotely resembles either merger or reorganization, as commonly understood. Pinellas Ice Co. v. Commissioner, 287 U.S. 462, 53 S.Ct. 257.

The challenged judgment must be affirmed. Footnotes

Footnote 1 Margin of opinion in Helvering v. Minnesota Tea Co., 296 U.S. 378, 56 S.Ct. 269.