Court Opinion

ID: 4490483
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:02:23.693428+00
Date Added: 2024-06-11T15:02:26.220283
License: Public Domain

*1088OPINION.
James:
The taxpayer claims an additional allowance for exhaustion, wear and tear of automobile trucks used in his business, and we have found as a fact that the reasonable life of such trucks is from two to four years. The deficiency should therefore be recomputed on the basis of 33% per cent depreciation in the case of automobiles.
As respects the withdrawals of the taxpayer, there is a sharp conflict of evidence. The revenue agent’s report and computations by accountants employed by the taxpayer are in evidence. From both it appears that the profit and loss account from the taxpayer’s business showed a net income between $21,363.69 and $23,195.81 for the year 1920, and it is admitted by both parties that some amounts of withdrawals were made by the taxpayer and entered on his business books. The conflict is whether those withdrawals are included in the deductions from profit and loss account on those books. A like situation exists as respects 1919, except for the difference in the amounts. The issue is whether the net income of the business as so computed was used by the taxpayer in his return, or whether he excluded his withdrawals in computing his business net income. It appears in the year 1920 that the taxpayer returned $21,363.69 as business income, the amount of the profit and loss account on his books, to which the Commissioner made additions not here in issue other than depreciation, being a total amount of $3,043.47. It seems proper, therefore, for the Commissioner to have included as income of the taxpayer as salaries and compensation the amount of withdrawals, since we are convinced by the entire evidence that the withdrawals were treated as deductions in the computation of business income,- both by the Commissioner and the taxpayer.
The testimony of the accountants, Furbee and Holden, is to the general effect as a conclusion that the withdrawals of the taxpayer *1089were not charged as expenses, but this is negatived by the revenue agent’s report of the profit and loss statement, which, except for other adjustments, agrees with the profit and loss statement submitted by the accountants, and the deductions therein, it is unequivocally stated by the agent, included the withdrawals by the taxpayer. Upon the entire record we are of the opinion that the taxpayer has not established his contention that the items of withdrawals should not he added to his book net income to determine his true net income from the business.