New Albany Hotel Co. v. Commissioner

*1103OPINION.

Petitioner seeks the computation of its excess-profits taxes under section 328 of the 1918 and 1921 Revenue Acts, relying upon section 327 (d) of said Acts for the relief sought. It is incumbent upon petitioner to establish that abnormal conditions affecting its capital or income existed before it is entitled to the benefit of these sections.

Upon this record we are unable to find that there existed abnormal conditions affecting petitioner’s capital or income during the taxable years. So far as is disclosed by the evidence the invested capital was normal, officers’ salaries were reasonable, and the net income, while substantial, was not an unusual or abnormal return on the investment. While the exclusion from invested capital of intangible assets, such as leaseholds and good will, might result in abnormalities, it must appear that, such assets have a recognized and ascertained value, which does not appear from the evidence in this case. There is no evidence before us as to what are normal capital, normal income (gross or net), or normal executive salaries for a business of the character engaged in by petitioner.

*1104We must hold, therefore, that petitioner has failed to establish any abnormalities affecting its capital or income that entitle it to the benefit of sections 327 (d) and 328 of the Revenue Acts of 1918 and 1921.

Judgment will be entered for the respondent.