Hunter Coal Co. v. Commissioner

2 B.T.A. 828, 1925 BTA LEXIS 2245

• Court: United States Board of Tax Appeals
• Decided: October 12, 1925
• Docket: Docket No. 2503.
• Status: Published

Opinion

OPINION.

James:

The taxpayer in its petition alleged that there should be included in invested capital $6,000 paid in connection with the acquisition of the leasehold and $8,000 expended for the development thereof. The taxpayer also alleged a further expenditure on the part of the corporation after organization of $1,520.39, making a total invested capital on account of the leasehold and development and a total amount subject to depletion of $15,520.39. No evidence was submitted as to the item of $1,520.39, and the evidence reversed the two items of original cost and development. The taxpayer further alleges a recoverable tonnage of coal of 200,000, but no evidence was submitted upon this point. It is apparent that the taxpayer should be allowed invested capital as above set forth in the findings on account of $14,000 actually expended by the predecessor partnership in acquiring and developing the leasehold property. The Board is without any evidence as to the basis for depletion. The taxpayer offered the revenue agent’s report, to which the Commissioner objected and his objection must be sustained. Under these circumstances, the taxpayer should be allowed invested capital as above set forth, but the deficiency should be computed without any deduction on account of depletion, since no basis therefor is contained in the evidence.