347 F2d 716 Ray Engineering Co v. Commissioner of Internal Revenue

347 F.2d 716

65-2 USTC P 9510

RAY ENGINEERING CO., Inc., Petitioner,

No. 15220.

United States Court of Appeals Third Circuit.

Argued June 17, 1965.
Decided June 25, 1965.

Robert M. Taylor, Philadelphia, Pa., for petitioner.

Solomon Leo Warhaftig, Dept. of Justice, Tax. Division, Washington, D.C., (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Harry Baum, Attys., Dept. of Justice, Washington, D.C., on the brief), for respondent.

Before McLAUGHLIN, KALODNER and STALEY, Circuit Judges.


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The sole question before us is whether petitioner corporation and Branch Coal Corporation were an affiliated group of corporations with the privilege of making a consolidated return with respect to their income taxes for the taxable year in lieu of separate returns. A careful, competent argument is made on behalf of petitioner. This is based on the facts that the corporations operated as a business unit with the same executive officer who owns all of the stock in both corporations. However, the dispositive factor is that Section 1504 of the 1954 Code which defines an 'affiliated group' leaves no room whatsoever for judicial construction as urged. The statute reads:


'As used in this chapter, the term 'affiliated group' means one or more chains of includible corporations connected through stock ownership with a common parent corporation which is an includible corporation if-- * * *.'


Under the facts petitioner and Branch Coal Corporation do not qualify as an 'affiliated group' within Section 1504. The decision of the Tax Court will be affirmed.