Detroit Macoid Corp. v. Commissioner

OPINION.

In this case the parties agree that petitioner is entitled to relief under section 722 (b) (4) and to the application of the 2-year push-back rule. They disagree only as to the amount that should be allowed. Petitioner contends for the amount of $137,-811. Eespondent has allowed the sum of $29,204.23. On the basis of all the evidence of record and after careful consideration of the suggested computations and the arguments advanced on brief, we have come to the conclusion, and have found as a fact, that respondent’s computation is fair and reasonable and should be approved. But little more need be said. In such a situation, a realistic approach is required. All such computations involve assumptions of fact and are consequently subject to error. Although assumptions and estimates must be employed in making the computation, such assumptions and estimates must be based on the proven facts. Testing the suggested computations by such concepts, we have come to the conclusion announced above. In our judgment, the constructive average base period net income fixed by respondent is fair and reasonable in the premises and is well grounded in the basic facts.

For the fiscal year ended June 30, 1941, the respondent’s computation of $23,947.47, resulting by reason of a difference in the governing law, is likewise approved.

Keviewed by the Special Division.

Decision will be entered u/nder Bule 50.