Court Opinion

ID: 4482111
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:19.11409+00
Date Added: 2024-06-11T15:03:38.248785
License: Public Domain

Sterrett, J., concurring: In permitting a deduction for a net operating loss carryover, Congress must have contemplated the existence of some income against which to offset the loss. This being so, surely Congress must have assumed that the new owners would make some changes in the operations to convert a losing operation into a profitable one. It would seem to follow then that the phrase “continued to carry on a trade or business substantially the same” (emphasis supplied) in section 382(a) (1) (C) must be interpreted in a manner to permit some modifications in the losing operation. It is clear to me that despite some changes in Asheville’s operations it remained in the hosiery business through the end of 1965. Although Asheville may have stopped manufacturing hosiery in 1965, it sold hosiery through the end of 1965 and into 1966. More importantly, some of the flat fabric manufactured on the full-fashioned machines and sold to Glen Eaven was eventually crimped, unraveled, and knit into hosiery by Glen Eaven. Accordingly, Asheville merely changed from a complete manufacturer of hosiery to a component maker in Glen Eaven’s integrated hosiery manufacturing operation. Through the end of 1965 Asheville continued to sell hosiery and to manufacture some cloth which was turned into hosiery. It would be hard to conclude that Asheville did not remain in substantially the same business within the intendment of 'Congress. TaNNENWald, Fat, and Goeee, agree with this concurring opinion.