Case Name: WALSH et al. v. COMMISSIONER OF INTERNAL REVENUE
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1943-05-17
Citations: 135 F.2d 701
Docket Number: No. 10527
Parties: WALSH et al. v. COMMISSIONER OF INTERNAL REVENUE.
Judges: Before SIBLEY, McCORD, and WALLER, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 135
Pages: 701–701

Head Matter:
WALSH et al. v. COMMISSIONER OF INTERNAL REVENUE.
No. 10527.
Circuit Court of Appeals, Fifth Circuit.
May 17, 1943.
Rehearing Denied July 14, 1943.
Harry C. Weeks, of Fort Worth, Tex., for petitioners.
Helen R. Carloss, Sewall Key, and L. W. Post, Sp. Assts. to Atty. Gen., Samuel O. Clark, Jr., Asst. Atty. Gen., and J. P. Wenchel, Chief Counsel, Bureau of Internal Revenue, and John M. Morawski, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.
Before SIBLEY, McCORD, and WALLER, Circuit Judges.

Opinion:
McCORD, Circuit Judge.
The parties are different, but the issue here involved is identical with that presented and decided as to the Richter "B" Lease transaction in the recent case of Hardesty v. Commissioner, 5 Cir., 127 F.2d 843. The wells were drilled as consideration for the transfer of an interest in the lease, and the intangible drilling and development costs constitute a capital expenditure and may not be deducted as ordinary and necessary business expenses. See Commissioner v. Rowan Drilling Co., 5 Cir., 130 F.2d 62; United States v. Sentinel Oil Company, 109 F.2d 854, certiorari denied 310 U.S. 645, 60 S.Ct. 1095, 84 L.Ed. 1412.
On the authority of Hardesty v. Commissioner, supra, the decision of the Board is affirmed.