Walnut Creek Milling Co. v. Commissioner

*559OPINION.

The questions presented by this appeal are indicated in the preliminary statement. The taxpayer has furnished little information for the determination of the amount of depreciation sustained during the years prior to 1917, or for the determination of the depreciation sustained during the year 1919. The evidence is to the effect that, prior to 1917, no reserve was set up for depreciation. The cost of repairs was charged to expense, but it is impossible to state the amount spent for repairs or to state whether depreciation was sustained ln‘excess of the amount spent. In its original tax return for 191*9, the taxpayer claimed the deduction from gross income of $14,417.39 for wear and tear of property, and in its brief claims a deduction of $18,431.49. The Commissioner has determined deductible depreciation of $11,155.20. The taxpayer has furnished no information as to when its assets, other than its mill building proper at Great Bend, were acquired. From the meager *560evidence of record, we can not determine whether the rates used by the Commissioner are more reasonable than those now claimed by the taxpayer. In the absence of material evidence, the appeal of the taxpayer for the deduction of a greater amount for depreciation than that which has been allowed by the Commissioner must be denied.

Little evidence has been furnished as to whether the taxpayer’s book surplus at January 1, 1919, more accurately reflects its true surplus than do the amounts found by the Commissioner. .At January 1, 1919, the taxpayer had been organized for a period of more than 40 years. Prior to 1917 it had never set up a reserve for depreciation. It had spent certain money for repairs and, presumably, for replacements, but the amount so spent is not in evidence. It is in evidence that major additions to the plant were properly capitalized. We have held, in Appeal of Cleveland Home Brewing Co., 1 B. T. A. 87, that depreciation is a question of fact. In any case where the amount of the depreciation determined by the Commissioner is challenged, evidence must be furnished to this Board which will enable it to determine the depreciation sustained. In the absence of competent evidence, the decision of the Commissioner must be sustained.