Court Opinion

ID: 4616682
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:34:59.490757+00
Date Added: 2024-06-11T07:55:09.999612
License: Public Domain

TIFTON COTTON MILLS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Tifton Cotton Mills v. CommissionerDocket No. 24247.United States Board of Tax Appeals11 B.T.A. 913; 1928 BTA LEXIS 3686; May 1, 1928, Promulgated *3686  The rate of depreciation of buildings and machinery determined.  H. Thomas Amason, C.P.A., for the petitioner.  A. S. Lisenby, Esq., for the respondent.  TRAMMELL*913  This is a proceeding for the redetermination of a deficiency in income and profits taxes for the calendar year 1922 in the amount of $880.79.  The petitioner had a net loss for the calendar year 1921, which is to be applied against 1922 under the provisions of section 204 of the Revenue Act of 1921, and the tax liability for 1921 is involved for the purpose of determining whether there is a greater net loss which is deductible in 1922, as well as the question as to the income of 1922.  The only question involved for both of the years is whether the respondent correctly determined the amount of depreciation deductions.  FINDINGS OF FACT.  The petitioner is a Georgia corporation organized in 1900, having its principal office at Tifton.  It was engaged in the business of manufacturing yarn from raw cotton.  During 1921 and 1922, it owned buildings known as the mill village, which were constructed in 1902 and subsequent years.  These buildings were of frame construction.  The*3687  respondent determined a depreciation rate with respect thereto of 2 1/2 per cent for each of the years.  The petitioner also had machinery and equipment which it acquired at various dates.  The respondent determined and allowed a deduction on account of the exhaustion, wear and tear thereof at a rate of 3 1/2 per cent, or $3,884.71 for 1921, and $5,792.70 for 1922.  A reasonable allowance for the exhaustion of the property known as the mill village was 2 1/2 per cent and a reasonable deduction on account of the exhaustion, wear and tear of machinery and equipment was 3 1/2 per cent for the years involved.  OPINION.  TRAMMELL: There is no controversy here with respect to the basis upon which the deduction on account of exhaustion, wear and tear should be allowed, the only controversy being the rate thereof.  In determining the rate, the respondent adopted the figures of an appraisal company, which company had been employed by the petitioner to make an appraisal of its plant and properties.  *914  The testimony introduced by the petitioner for the purpose of showing that it was entitled to a higher rate of depreciation was indefinite and uncertain, and was not sufficient*3688  in our opinion to overcome the presumption of the correctness of the respondent's determination.  The respondent allowed a greater deduction on account of depreciation than the petitioner had claimed in its original return.  Judgment will be entered for the respondent.