et against post-merger gains only to the extent that business which was previously operating a loss is now operating at profit. Garfinckel & Co. v. Commissioner of Internal Revenue, 335 F.2d 744 (2nd Cir.1964); Foremost Dairies, Inc. v. Tomlinson, 238 F. Supp. 258 (D.C. 1963); Bookwalter v. Hutchens, supra; 63-2 U.S. Tax Case 89568.
We conclude that New Cascade having sustained pre-merger losses may not carry them over to post-merger gains attributable to a different business unit.
Reversed.
HOWARD, J., and RUSKIN LINES, Superior Court Judge, concur.
NOTE: Judge HERBERT F. KRUCKER having requested that he be relieved from consideration of this matter, Judge RUSKIN LINES was called to sit in his stead and participate in the determination of this decision.
NOTES
[1]  Section 122 of I.R.C. of 1939 provides in pertinent part:

"If for any taxable year beginning after December 31, 1947, and before January 1, 1950, the taxpayer has a net operating loss, such net operating loss shall be a net operating loss carry-over for each of the three succeeding taxable years. * * *" (Emphasis supplied) § 122 (b)(2)(C), 64 Stat. 937, 938, 65 Stat. 505, 26 U.S.C. § 122(b)(2)(C), 26 U.S.C.A. § 122(b)(2)(C).
[2]  § 122(b) (2) (C) of the 1939 Code authorized a net operating loss carry over for three years "if for any taxable year beginning after December 31, 1947 and before January 1, 1950 the taxpayer has a net operating loss."
[3]  In this article the author, when referring to the above quote from Libson stated:

"It is submitted, however, that the Supreme Court did not and does not need to reply upon the apparently erroneous argument that the failure to file consolidated returns by the management company and the sales corporation thereby precludes the surviving corporation from having available at a loss carry-over net operating losses incurred by three of the sales corporations. The decision of the Supreme Court is only weakened by this statement, and its elimination would in no way undermine the primary reasoning of the Court 