Providence Coal Mining Co. v. Commissioner

*1180OPINION.

The answer admits that an incorrect depletion rate was used in calculating the deficiencies for the years in question and *1181that the correct rate is 2.54 cents per ton. We have found the tonnage mined and it only requires a mathematical calculation to arrive at the proper depletion deduction for each of the two years.

The respondent denied that the coal underlying the cemetery was mined in 1920. It was then incumbent upon the petitioner to prove this point as the first step to entitle it to the deduction of $4,500. Only one witness was called — the president of the petitioner. On direct examination he said that the coal was mined in 1920, but on cross examination, as to the year, he used such phrases as “ I am not positive about it”; “We are not absolutely positive about that”; and, finally, “ I am pretty sure that it was.” Such doubtful statements do not convince us that the coal was mined in 1920.

We, therefore, must approve the determination of the Commissioner on this point over any contention which the petitioner might advance. If we were satisfied, and we are not, that the entire amount, or a definite part of it, represented cost of goods sold, it would not be a question of deduction, but rather a question of reducing the income reported for the year in which the coal was mined by an amount which never should have been included in that income. But we can not do this in the present case, if for no other reason than that we do not know the year in which the coal was mined.

The amount is not deductible under section 234(a)(1), since we know that for income-tax purposes the petitioner neither paid nor incurred the amount in the year 1920, for in that year it did not know it had mined another’s coal. Neither is it deductible as a loss in 1920, under section 234(a). Appeal of New Process Cork Co., 3 B. T. A. 1339; Appeal of Bump Confectionery Co., 4 B. T. A. 50; Appeal of Hamler Coal Co., 4 B. T. A. 947. See also Malleable Iron Range Co. v. United States, 62 Ct. Cls. 425.

Judgment will be entered in accordance with the foregoing opinion on notice of 15 days, under Rule 50.