11 B.T.A. 390 | B.T.A. | 1928
Lead Opinion
In its returns for the years in question, petitioner took deductions as a repair expense, of replacing the units of its plant in the circumstances recited in the findings of fact. The Commissioner disallowed such deduction. Before the Board the petitioner claimed the deduction as a loss, measured by the cost of the old units to it, less depreciation in one of the years. Hence the amount of the deficiency in contest is less than the amount asserted by the Commissioner.
Clearly, we think the loss if deductible, is deductible as a loss, • and not as a repair expense. In this case the cost value of a plant such as the one in question here, new, has been satisfactorily shown. H. M. Wall qualified as a competent witness to testify as to such value, and so valued each item in the make-up of the plant. The proof is also satisfactory as to the actual cost of the secondhand
While it may be conceded that the method employed is not absolutely accurate when applied to each item separately, yet we believe it is fair, and arrives at a conclusion that any court of equity would accept. In the tabulated lists of parts burned out in the several years, as given in the findings of fact, the cost column of figures represents costs computed as above indicated.
The case was submitted on the theory involved in assignments of error Nos. 3 and 4, hence assignments Nos. 1 and 2 passed out and are not considered.
There was no evidence submitted relative to assignment of error No. 5, and counsel in his brief does not discuss the matter. -Hence, as to that item, we approve the action of the Commissioner.
The deficiency asserted for the year 1919 was not appealed from, hence the Board has no jurisdiction over that amount.
Petitioner suffered deductible losses as follows:
Total cost of items lost in 1920-$12, 517. 40
Less salvage value of scrap- 348. 60
Loss_ 12,168. 80
Total cost of items lost in 1921. 22,667.63
Less depreciation at 5 per cent. $1,133. 38
Salvage value of scrap-623.10
1, 756.48
Loss_ 20,911.15
Reviewed by the Board.
Judgment will be entered on 15 days’ notice, yonder Bule 50.