
    Peoples Ice & Cold Storage Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 14365.
    Promulgated January 19, 1928.
    
      Oharles H. Garnett, Esq., and E. B. Willson, G. P. A., for the petitioner.
    
      Shelby S. Faulkner, Esq., for the respondent.
   OPINION.

Milliken :

The testimony in this proceeding relative to the useful life of the machinery was given by a witness who personally inspected the machinery, observed its working condition, as well as facility of operation, and had been engaged continuously in the business of petitioner since 1911. We are convinced, from a consideration of the evidence, that petitioner is entitled to depreciation for the year 1921, at the rate of 6% per cent. The portion of the original cost of the machinery attributable to the machinery discarded in 1920 and 1921, was $6,616. Deducting this sum from the purchase price of $20,100, leaves $13,484 as the portion of the purchase price attributable to the other machinery and petitioner is entitled to a deduction for depreciation during the year 1921, on the latter sum.

The second issue relates to the deduction claimed for ordinary and necessary repairs made to the plant and machinery during the year 1921. The sum of $777, expended in the year, was an expense item and should be allowed as a deduction.

The third error relates to a loss sustained through the abandonment of machinery. Petitioner is entitled to a deduction represented by the depreciated value of the absorber, which became obsolete in the year 1921, was replaced, and which had no salvage value. It is also entitled to a deduction of the cost of the rectifier, which was installed in the year 1921, removed in that year, and which had no salvage value.

Judgment will be entered on 15 days' notice, wnder Rule 50.  