Strangman Mfg. Co. v. Commissioner

STRANGMAN MANUFACTURING CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Strangman Mfg. Co. v. Commissioner Docket No. 6964. United States Board of Tax Appeals 9 B.T.A. 670; 1927 BTA LEXIS 2541; December 19, 1927, Promulgated *2541 In the absence of evidence establishing that a loss contended for by the petitioner was sustained, the action of the respondent in disallowing the loss is approved. Walter O. Foss, for the petitioner. F. O. Graves, Esq., for the respondent. VAN FOSSAN *670 In this proceeding the petitioner appeals from the determination of a deficiency in income tax for the year 1920 in the amount of $547.19. It is alleged that the respondent erred in disallowing a deduction of $9,160.38, taken as a loss by fire to buildings and machinery, not compensated for by insurance or otherwise. FINDINGS OF FACT. The petitioner is a Maine corporation with principal offices at Newtonville, Mass. In June, 1920, petitioner's plant, consisting principally of buildings and machinery, was almost entirely destroyed by fire. Practically all of the assets destroyed were acquired prior to 1913. Petitioner's assets were insured to some extent against loss by fire. OPINION. VAN FOSSAN: We are unable to determine from the record either the cost or the March 1, 1913, value of the assets which were destroyed by fire in 1920. The facts submitted are meagre and the testimony*2542 of the treasurer of the petitioner corporation, the sole witness at the hearing, is confusing and conflicting. The petitioner in arriving at the alleged loss of $9,160.38, stated that it used as a basis one-half of the 1920 replacement value of the plant as representing a March 1, 1913, value and deducted *671 therefrom that portion of the insurance received applicable to the plant. This measure of value is purely an estimate or a crude approximation. It is not sufficient. The burden of proof is on the petitioner to submit such evidence as will enable us to decide that the determination of the respondent is incorrect. This the petitioner has wholly failed to do. Judgment will be entered for the respondent. Considered by MARQUETTE AND PHILLIPS.