OPINION.
Smith:
The Commissioner has determined that the Monroe Furniture Co. and the Southern Furniture Co. are affiliated for the year 1919, and has determined a deficiency in tax upon the ground that the American Furniture Co. and the Kaplan Furniture Co. are not affiliated with the first two-named companies. The reason for excluding the American Furniture Co. from the affiliated group is not apparent. It would seem to be affiliated with the Monroe Furniture Co. if the Southern Furniture Co. is. Apparently the reason for excluding the Kaplan Furniture Co. from the consolidation is the difference in the percentages of stock owned by the four principal stockholders in the first three companies and in the last company; whereas Mrs, L. L. Kaplan's interest in the Monroe Furniture Co. was only 4 per cent of the total, it was 40 per cent of the total of the Kaplan Furniture Co. We do not think, however, that this discrepancy in stock ownership alone is enough to exclude the Kaplan Furniture Co. from the consolidation. The evidence shows that the four companies were operated as a business unit and that there was the utmost harmony among the stockholders. Samuel Kaplan managed the entire group of companies and by virtue of his agreement with Mrs. L. L. Kaplan controlled the shares held by her. Her interest was not adverse to that of Samuel Kaplan. We think that substantially all of the stock of the four companies was owned or controlled by the same interests. We, therefore, are of the opinion that the taxpayer is legally entitled for the year 1919 to file a consolidated return with the Southern Furniture Co., the American Furniture Co., and the Kaplan Furniture Co.
ARTjndell not participating.