
    Theodore A. MEYERS and Wife, Alice V. Meyers v. The UNITED STATES.
    No. 581-52.
    United States Court of Claims.
    July 12, 1956.
    Ellsworth T, Simpson, Washington, D. C., for plaintiffs.
    Thomas Hogan, Washington, D. C., with whom was Charles K. Rice, Asst Atty. Gen., Andrew D. Sharpe and H. S... Fessenden, Washington, D. C., on the brief, for defendant.
    Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges.
   LITTLETON, Judge.

The plaintiffs sue to recover $29,439.-33, representing income tax deficiency, negligence penalty and interest thereon, for the calendar year 1948, and $269.16, with interest thereon, which sum represents a conceded overpayment for the calendar year 1950. The law governing the case and the basic facts are set forth in the decision rendered by the court on October 4, 1955, Ct.CL, 134 F.Supp. 520. The court held in that decision that there was no evidence supporting defendant’s beginning cash on hand in its net worth statement and- that plaintiff’s evidence failed' to furnish a basis for entering judgment in its behalf. The case was remanded to a commissioner of this court, for the purpose of taking the testimony of agent Kennedy relative to the cash on hand as of December 31, 1942, and as of December 31, 1947, and to have his, net worth- statement put in evidence for the purpose of determining the cash on hand on January 1, 1948, and for a re-, port thereon.

The testimony of Agent Kennedy was-taken and the net worth statement used by him in examining plaintiffs’ returns for the years 1942 through 1947 was put in evidence'. ' The evidence shows that the net worth statement used by agent Kennedy was prepared and given to him by plaintiffs’ attorney.' This statement furnished by plaintiffs shows $50,000 cash on hand on December 31, 1942, and $40,000 cash on hand on December 31, 1947. The net worth statement of Agent Thomas shows $50,000 cash on hand on December 31, 1942, and $19,211.39 cash on hand on December 31, 1947. The evidence shows that the difference between the $40;000 cash on hand as of December 31, 1947, as shown by Agent Kennedy’s'; net worth statement and the cash-on-hand figure of $19,211.39 as of January 1, 1948, as shown on the net worth statement by Agent Thomas, was the result of an error made by plaintiffs in the net worth statement furnished Agent Kennedy concerning loans made to one of plaintiffs’ businesses. When this error is corrected the net worth statements are not inconsistent.

The plaintiffs still contend that the defendant’s use of the net worth method was arbitrary and that its determination that plaintiffs had $50,000 cash on hand on December 31, 1942, and $19,211.39 cash on hand on January 1, 1948, are arbitrary and not supported by the record.

However, the commissioner of this court, who heard the evidence and observed the demeanor of the witnesses, is made the judge of questions of fact and his findings are presumed to be correct. The commissioner has found in finding 10 that:

“Defendant’s use of the figure of $50,000 cash on hand December 31, 1942, is supported by the evidence as reasonable under thé circumstances described. • The ¡ figure of '$40,000 cash on hand December 31, 1947, is not supported by the evidence. Defendant’s recomputation of the estimated cash on hand as of the latter date and use of the net worth method is supported by the evidence and is not arbitrary.”

After an examination of the record, we agree with and adopt his finding. The' element of closeness involved in this case; is primarily due to the failure of the plaintiffs to come forward with facts peculiarly within their knowledge to explain the discrepancies involved in thecáse. The plaintiffs’ other contentions have been considered and found to be without merit.

Plaintiffs are not entitled to recover for the year 1948.

Plaintiffs are entitled to recover the conceded overpayment for 1950 in the amount of $269.16. ■

Judgment will be entered for plaintiffs in the amount of $269.16, with interest as provided by law. ' ■ .

It is so ordered.

JONES, Chief Judge, and LARA-MORE, MADDEN, and WHITAKER, Judges, concur.  