Court Opinion

ID: 6802496
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:43:13.370015+00
Date Added: 2024-06-11T16:03:17.892834
License: Public Domain

*369opinion-.
Smith:
The question in issue in this appeal is whether the . original returns of the taxpayers or the amended returns made by a deputy collector and accepted by the Commissioner represent the correct net income. As indicated in the findings of fact, the deputy collector was unable to check the taxpayers’ returns from the taxpayers’ books of account and, upon the statement alleged to have been made to him by Walsdorf, determined the gross profits from the sale of merchandise by taking a certain percentage of the gross sales. The gross sales determined by the deputy collector were determined, not from the taxpayers’ books of account showing sales, but by excluding from the taxpayer’s bank deposits certain amounts which he determined were not income from his business. He determined that the total deposits for 1918 were $45,415.42, and that deposits from other than sales of merchandise amounted to $14,-479.43. The taxpayers have introduced evidence, however, that satisfies the Board that of the total of deposits $18,127.88 represented deposits of moneys which were not from sales of merchandise.
*370From the evidence of record the Board is satisfied that the books of account of the taxpayers accurately reflect sales of merchandise and gross profits from such sales. It is true that the inventory sheets are not of record at this time, but the taxpayers took physical inventories at the close of each year, and the Board is convinced that the amounts of the inventories shown upon the taxpayers’ returns represent the true inventories.
The taxpayers have introduced evidence which shows that bad debts in the amount claimed for the years 1919 and 1921 were actually charged off during those years. Other changes in the taxpayers’ returns are of a minor character, some favoring the taxpayer and some not. From a consideration of the- entire record the Board is of the opinion that the original returns reflect the true net income and that there is no deficiency in tax for any of the years involved.

Judgment for the petitioners.