Docket No. 8145. | B.T.A. | Jul 14, 1927
Lead Opinion
The Commissioner concedes that at the end of the year 1919 the taxpayer had on hand surplus castings amounting to 883,520 pounds and that these castings cost $134,716.03. It was contended by the Commissioner, however, that the surplus castings had only a scrap value at the end of the year 1919 and that this fact was known to petitioner. It was the practice of petitioner to overmake castings but these castings were never scrapped until an effort was first made to dispose of them and that practice was followed by it with reference to the surplus disclosed as a result of the inventory taken in the fall of 1919. It clearly appears from the evidence that the castings had been properly made and it was believed by the management of petitioner at the end of 1919 that at least a considerable portion of them might be disposed of as a result of a sales campaign. Under such circumstances we believe that petitioner was justified in leaving the castings in the inventory at their cost price until the result of the sales campaign could be determined. It was not until the following year of 1920 that it was definitely determined that there was no present market for most of these castings and during that year, and not before, the unsold castings were in fact scrapped. We are of the opinion that the inventory loss was properly taken in'the year 1920.
At the trial of the case the Commissioner moved that the petition be dismissed in so far as it related to the year 1919, for the reason that no deficiency was found for that year, but an overassessment in the amount of $23,947.92, which over assessment was not the result of action on a claim for abatement or otherwise represented such a determination as would give the Board jurisdiction. The motion of
Judgment will be entered on IB days’ notice, under Rule SO.