
    Hugo A. Lindenberg, Petitioner, v. Commissioner of Internal Revenue, Respondent. E. J. Fox, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket Nos. 6878, 6880.
    Promulgated March 15, 1927.
    Evidence held insufficient to establish market value of goods inventoried at cost.
    
      G. Clive Clark, Esq., for the petitioners.
    
      J. S. Halstead, Esq., for the respondent..
    
      The above-entitled proceedings were consolidated at the hearing. The Commissioner determined deficiencies for each of the above petitioners for the years 1919, 1920, and 1921, as set forth below:
    
      Hugo A. Linderiberg
    
    Year. - Amount.
    1919 Additional tax due-$14.42
    1920 Additional tax due_ 702. 59
    - $777.01
    1921 Over-assessment_ 128. 92
    Net deficiency- 648. 09
    
      E. J. Fox
    
    1919 Additional tax due_$193. 55
    1920 Additional tax due_ 767. 04
    - $960. 59
    1921 Over-assessment_ 143. 57
    Net deficiency_ 817.02
    The petitioners acquiesce in the changes made by the Commissioner, but now allege error in that they have overstated their partnership inventories for the fiscal years ended April 30, 1920, and April 30, 1921, by taking them at cost instead of at market.
    FINDINGS OF FACT.
    The petitioners, during the taxable years 1919, 1920, and 1921, were wholesale jewelers, doing business in Cincinnati, Ohio, as a partnership under the firm name of Lindenberg & Fox. A large part of their business consisted of the sale of diamonds and watches.
    Inventories of the partnership stock as' of April 30, 1920, and as of April 30,1921, were taken on the basis of cost. Some of the goods included in these two inventories were later sold at less than cost.
   OPINION.

MuRdock:

The petitioners have attempted to prove that the market value of their goods was lower than cost. They introduced in evidence the original sheets of adding machine figures used in taking their inventories with the totals set out. The only indication of what goods these figures represent is that on each sheet there is a general statement of what is represented on that page, such as “ Safe #3— Jewelry,” “ Diamonds,” “ Cabinet between saves,” and Wrist-Gents watches.” On some of the pages there is a gross total from which certain percentages are deducted to arrive at a net figure which also appears. In addition three sheets were introduced in evidence showing a description of certain articles, the stock number, the April 30, 1920, inventory value, the date sold, the sale price, and the loss in respect to each. These articles represented only a small portion of the goods inventoried. The sales took place in 1920, 1921, 1922, and 1923.

From these exhibits and from the testimony offered we are not able to determine the market value of any goods as of the dates of the inventories, nor are we able to determine how cost compared with market value.

Judgment will be entered after 15 days' notice, under Bule 50.  