Opinion
November 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.
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.
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.
Certiorari has been granted in these cases by the United States Supreme Court.
Respondent admits that, if this court follows its decisions in the above-mentioned 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).
Reversed.