O'Donnell

Upon auditing respondent’s income tax returns for 1925, 1926, 1927, 1928, and 1929, the Commissioner of Internal Revenue determined that there were deficiencies in the respective amounts of $505.59, $3,966.54, $7,003.28, $5,392.81, and $979.41, and so notified respondent-. Respondent petitioned the Board of Tax Appeals for redetermination of the alleged deficiencies. The Board decided that, instead of deficiencies, there were overpayments of respondent’s income tax for 1925, 1926, and 1927 in the respective amounts of $2,950.44, $800.35, and $3,003.28; that for 1928 there was a deficiency of $30 only; and that for 1929 there was neither a deficiency nor an overpayment. The Commissioner seeks reversal of the Board’s decision.

Facts found by the Board and not disputed by the Commissioner are as follows r

On and prior to January 9, 1918, respondent was thé owner and holder of one-third of all the issued and outstanding capital stock of the San Gabriel Petroleum Company, a corporation, hereafter called San Gabriel, by which certain oil properties were held under lease. Respondent on that date sold and transferred all his San Gabriel stock to the Petroleum Midway Company, Limited, a…