The opinion
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT., PETITIONER, v.
Lyon Bros. Millinery Co. v. Commissioner
Docket No. 18123.
United States Board of Tax Appeals
17 B.T.A. 1244 ; 1929 BTA LEXIS 2154 ;
November 6, 1929 , Promulgated
*2154 Action of the Commissioner in rejecting closing inventories approved.
Fred J. Wolfson, Esq., for the petitioner.
Arthur H. Murray, Esq., for the respondent.
LANSDON
*1245 This appeal seeks a redetermination of a deficiency in income and profits tax in the sum of $2,637.98, asserted by the respondent against petitioner for the fiscal year ended November 30, 1920. Petitioner charges error on the part of respondent in rejecting valuations claimed in its closing inventories for the year.
FINDINGS OF FACTS.
The petitioner is a corporation engaged in the manufacture and sale of millinery goods at Mansas City, Mo. At the close of the taxable year the petitioner prepared a closing inventory of its stock of merchandise in which it attempted to arrive at its market value by arbitrarily discounting the cost price of each article, then in stock, 33 1/3 per cent. These values were claimed by petitioner in reporting its net income for the year and rejected by the Commissioner of Internal Revenue, which resulted in the increase of the taxable income, as reported, by $5,709.90. Upon being notified of the Commissioner's rejection of these valuations, *2155 the petitioner filed an amended return in which it revised its closing inventory. The values arrived at in this revised inventory were obtained by separately appraising each item of merchandise in respect to both its cost price and market value. In each case the lower value, cost or market, was adopted for inventory purposes. This invoice was likewise rejected by the Commissioner. Neither of these invoices was put in evidence, nor was there any testimony offered as to the market value of the property they covered.
OPINION.
LANSDON: The petitioner argues that the methods employed, in making inventories, are immaterial, so long as they reflect the true value of the property affected; that one or the other of these invoices should be accepted, and, that in view of the fact that, in either case, the result is "substantially" the same its appeal should be sustained. It is true that we are interested in concrete values, rather than theories or methods, and either of these inventories might have been acceptable had the petitioner introduced proof as to the value of the merchandise they covered. No evidence, however, as to any values, or the income of the petitioner, is given, *2156 and there is nothing in the entire record upon which we can base the determination of any tax; much less a finding that the respondent erred in his determination. The petitioner has failed to sustain its allegations of error and judgment will be for the respondent.
Reviewed by the Board.
Decision will be entered for the respondent.