P. H. Gill & Sons Forge & Machine Works v. Commissioner

OPINION.

Murdock :

Without knowing more facts we must affirm the respondent. The fact that the States Steamship Co. went into bankruptcy in 1920 is not sufficient to establish either that the petitioner had a loss in 1920 or that its debt was worthless in that year. That the petitioner later tried to enforce payment through a court proceeding is likewise insufficient to prove the right to the deduction claimed. We have not been informed as to what the court decided or as to why it so decided. Did it decide that for some reason the petitioner was not entitled to payment for the work, or did it decide that its pleadings were improper or that it had elected the wrong remedy? Could the petitioner have recovered in the bankruptcy proceedings? Did it have any other remedy?

There are too many possibilities left open under the proof which might change the result from a tax standpoint for us to hazard a guess or draw the inferences necessary to put the question of the deductibility of this amount squarely before us.

Judgment will he entered for the respondent.

Considered by Stern hagen and Aeundell.