Calumet Co. v. Commissioner

OPINION.

When this appeal was called for hearing, the representative of the taxpayer failed to appear, but made a telephone request to the secretary of the Board for permission to file a brief. Upon an examination of the petition it appeared that the major portion of the allegations of fact were denied, and the representative of the *900taxpayer was given an opportunity to appear and be heard. Upon his appearance he was advised that it appeared from the petition and answer that his allegations as to the value of licenses held on March 1, 1913, were denied, and that that fact appeared to be a material question of fact in the appeal. In response to that statement, he replied that the March 1, 1913, value was a question of law, that he had no evidence to submit, would rest upon the pleadings, but desired to file a brief. This he was permitted to do.

The petition alleges that the taxpayer had on March 1, 1913, 58 licenses of a value of $116,000. The answer admits that the taxpayer, prior to March 1, 1913, had purchased 58 licenses, but denies their value. In the petition the taxpayer alleges the purchase of two licenses subsequent to March 1, 1913, which purchase and the amount thereof, the Commissioner admits.

It is apparent from the foregoing statement that the taxpayer and its representative have completely misconceived the nature of the issue before this Board. The only facts before the Board are that prior to March 1, 1913, the taxpayer acquired 58 licenses, neither-the cost nor value of which is proved, and that the taxpayer after March 1, 1913, paid $2,673 for two saloon licenses. It does not appear that these licenses continued in force up to and including prohibition legislation, nor, indeed, does it appear .that the 58 licenses which the taxpayer had on March 1, 1913, and which had cost the taxpayer something prior to that date, continued in effect until prohibition legislation. The taxpayer, claims, but the Commissioner does not admit, that the expenditures for licenses after March 1, 1913, and the value of licenses held as of that date, constituted a valuable asset which the taxpayer was entitled to recover by a deduction from income through' obsolescence upon the taking effect of prohibition legislation. It is apparent that even as to the item of two saloon licenses purchased after March 1, 1913, there are not sufficient facts before the Board to enable it to determine whether the expenditure then made was in the nature of a capital expenditure or an ordinary expense, as it was held to be by the Commissioner. Upon this state of the record, the determination of the Commissioner must be approved.