249 F2d 432 English v. Commissioner of Internal Revenue

249 F.2d 432

57-2 USTC P 10,059

Charles ENGLISH et al.,* Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
*Lorraine English, Sam English, Mary English and Edward J. Flanagan.

United States Court of Appeals Seventh Circuit.

Nov. 29, 1957.

William J. Cawley, Chicago, Ill., for petitioner.

Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Joseph F. Goetten, Meyer Rothwacks, Attorneys, Department of Justice, Washington, D.C., for respondent.

Before LINDLEY, SCHNACKENBERG and HASTINGS, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

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1

In this appeal from the Tax Court of the United States, petitioners charge that respondent erred in his disallowance of salaries and rents paid by petitioners in their operation of a 'bookmaking establishment', in determining alleged income tax deficiencies of petitioners.

2

Both the Tax Court and petitioners state, and are not contradicted by respondent, that this case is indistinguishable on its facts and legal issues from the following cases decided by this court: Sullivan v. Commissioner (Ross v. Commissioner), 7 Cir., 241 F.2d 46, and Mesi v. Commissioner, 7 Cir., 242 F.2d 558.1

3

Respondent admits that, if this court follows its decisions in the abovementioned cases, the decision of the Tax Court is reversible. Unless and until our decisions in the Sullivan, Ross and Mesi cases are reversed by the Supreme Court, we adhere to them. Therefore, we reverse the decision of the Tax Court insofar as it failed to allow as deductions wages and rents paid by petitioners, as aforesaid. They are ordinary and necessary expenses of doing business, within the meaning of section 23(a)(1)(A) of the Internal Revenue Code of 1939, 26 U.S.C.A. 23(a)(1)(A).

4

Reversed.

1

Certiorari has been granted in these cases by the United States Supreme Court