
    Gaylord Mercantile Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 13077.
    Promulgated October 1, 1928.
    
      George E. Wallace, Esq., and Charles H. Preston, C. P. A., for the petitioner.
    
      L. A. Luce, Esq., for the respondent.
   OPINION.

Lansdon:

This is a case wherein the issues are purely questions of fact, yet we are confronted by a failure of the record to afford any definite basis upon which to determine that the respondent has erred.

In the first and second issues the petitioner seeks to revise the amounts of the inventories at the beginning and the end of the year 1919 which it reported in its returns and which values have been accepted by the respondent. It is in evidence that the inventories actually taken were of the goods on hand on January 31 of each year, although the returns were filed on a calendar year basis. Furthermore, it appears that the values of the inventories reported in the returns differ from the actual inventories according to the books. No attempt has been made to reconcile these differences. From the facts before us we can not state to what extent, if any, the-cost of goods sold has been erroneously reported, in either of the taxable years.

The remaining issue relates to the amount of the deductions allowable for exhaustion, wear and tear. Certain book values are used by both parties in their computations, but they differ as to the annual percentage rates to be allowed in the computations. There is no satisfactory evidence that the book values were the acceptable remaining cost after deducting depreciation actually sustained or that the remaining lives of the assets may be expected to differ materially from the estimates of the respondent.

Judgment will be entered for the respondent.  