The opinion
PALATINE ANILINE AND CHEMICAL CORPORATION, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Palatine Aniline & Chemical Corp. v. Commissioner
Docket No. 8691.
United States Board of Tax Appeals
8 B.T.A. 1149 ; 1927 BTA LEXIS 2730 ;
October 31, 1927 , Promulgated
*2730 Commissioner's determination approved for lack of evidence.
Samuel Freedman, Esq., for the petitioner.
Bruce A. Low, Esq., for the respondent.
MURDOCK
*1149 MURDOCK: The petition alleges that the Commissioner in determining the deficiencies in controversy was in error (1) when he decreased the net worth of the corporation at January 1, 1920, by increasing the reserve for depreciation by $6,144.76; (2) when he disallowed depreciation on machinery for the year 1920 in the amount of $609.01 and for the year 1921 in the amount of $899.44, and (3) when he disallowed losses on assets discarded during the two years in the amounts of $550 for 1920, and $2,437.50 for 1921.
The answer denied all of the allegations of the petition, except those alleging that the deficiency letter was mailed September 21, 1925, that the taxes in controversy are income and profits taxes for the calendar years 1920 and 1921 in the total amount of $2,402.76, and that the petitioner is a New York corporation with its principal office at Poughkeepsie, N.Y.
The only evidence offered was the deposition of an internal revenue agent who made an examination of the petitioner's *2731 books and records for the years 1920 and 1921, on or about October 15, 1924. A copy of his report was offered in evidence. It gave certain data, schedules and computations to show that additional tax was due for these two years in the amount of $2,479.70, $538.47 being for 1920 and $1,941.23, the balance, being for 1921. The witness then stated that this report contained certain errors and he indicated what corrections should be made in the figures as shown by the report, but he *1150 gave no reason for these changes which increased the loss from obsolescence on machinery and changed the amount of accrued depreciation at December 31, 1918, as shown by his report.
It does not appear that the Commissioner based his determination on the report of this revenue agent. Until this is shown, it is immaterial that errors were made in the report. We, therefore, have not sufficient proof in this case to overcome the presumption of the correctness of the Commissioner's determination.
Judgment will be entered on notice of 15 days, under Rule 50.
Considered by TRAMMELL, MORRIS, and SIEFKIN.