factor, and its principal business is storing and selling of cotton for its customers, advancing them money upon cotton so stored with it, and charging said customers interest, insurance, storage, selling commissions, etc., for handling said cotton.

2. Under its contract of storage the taxpayer became liable to its customers as insurer of the cotton so stored. To protect itself against this liability, the taxpayer entered into contracts of insurance with certain insurance companies, under which contracts the insurance companies insured taxpayer against loss of this cotton by fire. This contract was evidenced by certain policies of insurance covering the cotton in question.

3. In addition to issuing to the taxpayer the policies of insurance above referred to, the insurance companies issued to the taxpayer socalled "Certificates of insurance." These were separate and distinct documents from the policies of insurance. These certificates of insurance were written instruments certifying to the fact that the makers thereof, the insurance companies, had insured certain designated cotton in the custody of the insured taxpayer, by and under specific policies of insurance the numbers of which were indicated in the certificates. The purpose of the issuance of these certificates of insurance was to enable the insured to retain in his possession the policies of insurance and at the same time hypothecate the certificates as security for money borrowed by the insured. This obviated the necessity of assigning the policies of insurance and was intended to serve the same purpose.

4. The taxpayer, some time prior to March 22, 1916, had borrowed money and as security for the loan had hypothecated certain bills of lading and warehouse receipts and similar evidences of taxpayer's legal title to the cotton they represented. In addition thereto the taxpayer had hypothecated certain of the certificates of insurance above mentioned representing the policies of insurance covering the cotton so pledged as security.

5. On the afternoon of March 22, 1916, the policies of insurance covering the cotton in question were surrendered by the taxpayer to the insurance companies issuing them, for cancellation. The certificates of insurance representing these policies were not surrendered for cancellation but remained in the hands of the pledgee with whom they had been hypothecated.

6. On the night of March 22, 1916, fire destroyed the taxpayer's warehouse and with it the cotton of taxpayer's customers, which had been covered by the insurance policies surrendered for cancellation on the afternoon before the fire occurred.

7. The insurance companies denied liability on the policies surrendered for cancellation on March 22, 1916, whereupon the parties with whom the insurance certificates were hypothecated instituted suit against the insurance companies to enforce liability on the certificates of insurance. After considerable litigation the issue was decided favorably to the insurance companies, on the ground that the certificates of insurance were of no effect independently of the policies of insurance and that, the latter having been surrendered for cancellation, there was no existing liability on the part of the insurance companies at the time of the fire.

The Board has no jurisdiction of an appeal based upon the denial by the Commissioner of a claim for credit of taxes paid prior to the passage of the Revenue Act of 1924, where there has been no determination that any assessment should be made.

The provisions of section 279 (b) of the Revenue Act of 1924, conferring upon the Board jurisdiction of appeals from decisions of the Commissioner upon claims for abatement filed under section 279 (a) of said Act, have no application to claims for abatement which do not involve jeopardy assessments as defined in section 274(d) of the Revenue Act of 1924.

Where a taxpayer files a return under the Revenue Act of 1921 in which he admits an amount of tax to be due, and a claim for credit against said tax of taxes paid in prior years is denied by the Commissioner, the Board has no jurisdiction of an appeal based upon the denial by the Commissioner of a claim for abatement of the tax thus admitted to be due, as there has been no determination by the Commissioner since the enactment of the Revenue Act of 1924 that any assessment should be made.

Submitted September 29, 1924; decided October 16, 1924.

Delos M. Cosgrove, Esq., for the taxpayer.

Robert A. Littleton, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

Before IVINS, KORNER, and MARQUETTE

MARQUETTE: The Commissioner has moved to dismiss the petition herein upon the ground that the Board is without jurisdiction to entertain the appeal.

It appears that the petitioner filed returns and paid a tax for the year 1920 of $3,782.26, and for the year 1921 of $953.50. On or about March 13, 1923, he filed a return for the year 1922 and reported a tax due of $2,447.31. At the time of filing his return for the year 1922, he filed amended returns for the years 1920 and 1921, and a claim for refund and credit of $3,826.36 of the taxes paid for the years 1920 and 1921. In his claims he requested that $2,447.31 of the amount claimed be credited against the tax due for the year 1922, and that the balance of $1,379.05 be refunded to him. The petition states that by letter mailed July 21, 1924, the Commissioner notified the petitioner of his decision, and he has appealed, setting up as error the denial of the claims for refund and for credit.

A hearing was had on the motion to dismiss on September 15, 1924, at which both parties appeared by counsel, and at the conclusion thereof 15 days was granted within which to file briefs. The petitioner in his brief has alleged additional facts not relied upon in the petition to sustain the jurisdiction of the Board. He now states that on April 8, 1924, a bill for the tax as shown by the return for the year 1922 of $2,447.31, and $104.03 interest, was received by the petitioner upon Form 1-17A; that on April 15, 1924, a claim for abatement of said tax was filed; and that on July 21, 1924, the claim for abatement was denied by the Commissioner.

In view of the additional facts disclosed, it would appear that the appeal should have been taken from the denial of the claim for abatement rather than from the denial of the claims for refund and credit; but in the present state of the record we deem it advisable to consider the appeal as though it had been properly taken from the denial of the claims for refund, credit, and abatement, and the

The taxpayer conceded at the hearing that the certificates of insurance were not independent contracts of insurance and had no force or effect independent of the policies of insurance they represented. Since the status of a debt could not be predicated on the policies of insurance which had been surrendered for cancellation, the certificates of insurance were likewise impotent in this respect.

The taxpayer has not shown a debt to have existed from the insurance company to it. It must follow that it is not entitled to take as a deduction from gross income, in the nature of a bad debt, the item of $4,728.97 here in question.

The issue as to whether or not the taxpayer, under these circumstances, would have been entitled to a deduction from gross income by reason of a loss is not raised in this record. This matter was touched upon in the argument of this appeal, but it was conceded by counsel for taxpayer that if under these circumstances a loss was sustained by the taxpayer, such loss was sustained in the year 1916 when the fire occurred. Since the taxpayer is not contending for a deduction by reason of such loss, in this appeal, counsel for both parties expressly waived a decision on this point.

The deficiency as determined by the Commissioner is approved.

Appeal of ALFRED B. DAY.

Docket No. 17.

Appeal, being from claim for refund of tax paid before June 2, 1924, dismissed for lack of jurisdiction.

Submitted October 13, 1924; decided October 16, 1924.

No appearance for the taxpayer.

Arthur H. Deibert, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

Before IVINS, KORNER, and MARQUETTE.

FINDINGS OF FACT.

The amount of taxes alleged by the taxpayer to be in controversy is less than $10,000.

The Commissioner's letter of July 17, 1924, from which the appeal was taken, rejected a claim for refund of a tax paid prior to June 2, 1924, and did not determine that there was any deficiency in tax, nor that any assessment should be made.

DECISION.

The petition is dismissed on the authority of the Appeal of Everett Knitting Works, 1 B. T. A., 5.

Appeal of J. VICTOR BARON.

Docket No. 26.

The Board has no jurisdiction of an appeal based upon the denial by the Commissioner of a claim for refund of taxes paid prior to the passage of the Revenue Act of 1924.

The Board has no jurisdiction of an appeal based upon the denial by the Commissioner of a claim for credit of taxes paid prior to the passage of the Revenue Act of 1924, where there has been no determination that any assessment should be made.

The provisions of section 279 (b) of the Revenue Act of 1924, conferring upon the Board jurisdiction of appeals from decisions of the Commissioner upon claims for abatement filed under section 279 (a) of said Act, have no application to claims for abatement which do not involve jeopardy assessments as defined in section 274(d) of the Revenue Act of 1924.

Where a taxpayer files a return under the Revenue Act of 1921 in which he admits an amount of tax to be due, and a claim for credit against said tax of taxes paid in prior years is denied by the Commissioner, the Board has no jurisdiction of an appeal based upon the denial by the Commissioner of a claim for abatement of the tax thus admitted to be due, as there has been no determination by the Commissioner since the enactment of the Revenue Act of 1924 that any assessment should be made.

Submitted September 29, 1924; decided October 16, 1924.

Delos M. Cosgrove, Esq., for the taxpayer.

Robert A. Littleton, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

Before IVINS, KORNER, and MARQUETTE

MARQUETTE: The Commissioner has moved to dismiss the petition herein upon the ground that the Board is without jurisdiction to entertain the appeal.

It appears that the petitioner filed returns and paid a tax for the year 1920 of $3,782.26, and for the year 1921 of $953.50. On or about March 13, 1923, he filed a return for the year 1922 and reported a tax due of $2,447.31. At the time of filing his return for the year 1922, he filed amended returns for the years 1920 and 1921, and a claim for refund and credit of $3,826.36 of the taxes paid for the years 1920 and 1921. In his claims he requested that $2,447.31 of the amount claimed be credited against the tax due for the year 1922, and that the balance of $1,379.05 be refunded to him. The petition states that by letter mailed July 21, 1924, the Commissioner notified the petitioner of his decision, and he has appealed, setting up as error the denial of the claims for refund and for credit.

A hearing was had on the motion to dismiss on September 15, 1924, at which both parties appeared by counsel, and at the conclusion thereof 15 days was granted within which to file briefs. The petitioner in his brief has alleged additional facts not relied upon in the petition to sustain the jurisdiction of the Board. He now states that on April 8, 1924, a bill for the tax as shown by the return for the year 1922 of $2,447.31, and $104.03 interest, was received by the petitioner upon Form 1-17A; that on April 15, 1924, a claim for abatement of said tax was filed; and that on July 21, 1924, the claim for abatement was denied by the Commissioner.

In view of the additional facts disclosed, it would appear that the appeal should have been taken from the denial of the claim for abatement rather than from the denial of the claims for refund and credit; but in the present state of the record we deem it advisable to consider the appeal as though it had been properly taken from the denial of the claims for refund, credit, and abatement, and the

motion of the Commissioner to dismiss is broad enough to include the latter claim.

We have heretofore held, in Appeal of Everett Knitting Works, 1 B. T. A., 5, that the Board has no jurisdiction of an appeal involving only the refund to a taxpayer of a tax paid prior to the passage of the Revenue Act of 1924. The facts in this case, with respect to the claim for refund, bring it squarely within the rule there laid down, and on this point the motion to dismiss is

well taken.

The next question is whether the Board has jurisdiction of an appeal based upon the denial by the Commissioner of a claim for credit. Fundamentally, there is no difference between a claim for refund and a claim for credit; both are based upon the allegation that an amount of tax has been paid in excess of that legally due. The variation arises from the disposition or application of any excess payments found to have been made. In the one case they are returned to the taxpayer and in the other they are applied toward the payment of taxes admitted or found to be due. The reasons underlying the decision in Appeal of Everett Knitting Works, supra, are equally applicable here, and we think the Board is without jurisdiction to entertain an appeal based upon the denial by the Commissioner of a claim for credit of taxes paid prior to the passage of the Revenue Act of 1924 where there has been no determination after its enactment that any assessment should be made.

There remains the question whether the denial of the claim for abatement will sustain the jurisdiction of the Board. The petitioner in his brief relies upon section 279 (a) and (b) of the Revenue Act of 1924 as conferring such jurisdiction. The pertinent parts of the above section are as follows:

SEC. 279. (a) If a deficiency has been assessed under subdivision (d) of section 274, the taxpayer, within 10 days after notice and demand from the collector for the payment thereof, may file with the collector a claim for abatement of such deficiency, or any part thereof, or of any interest or additional amounts assessed in connection therewith, or of any part of any such interest or additional amounts.

*

(b) If a claim is filed as provided in subdivision (a) of this section the collector shall transmit the claim immediately to the Commissioner. who shall by registered mail notify the taxpayer of his decision on the claim. The taxpayer may within 60 days after such notice is mailed file an appeal with the Board of Tax Appeals.

Subdivision (d) of section 274, referred to in section 279 (a), pro

vides:

SEC. 274. (d) If the Commissioner believes that the assessment or collection of a deficiency will be jeopardized by delay such deficiency shall be assessed immediately and notice and demand shall be made by the collector for the payment thereof.

It is apparent from section 279 (b) that jurisdiction of appeals from the decisions of the Commissioner involving claims for abatement filed under section 279 (a) has been conferred upon the Board. It is likewise apparent that under the facts herein no case is presented involving a so-called jeopardy assessment within the meaning of the above-quoted provisions of the 1924 Act, and no question as to the jurisdiction of the Board under such circumstances is before us for decision. It is not necessary, therefore, to determine what the