
    Pilot Knob Ore Co., Formerly Big Mundy Coal & Iron Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 13377.
    Promulgated October 11, 1928.
    
      L. D. Slattery, Esq., for the petitioner.
    
      James A. O'Callaghan, Esq., for the respondent.
   Siefkin:

This is a proceeding for the redetermination of a deficiency in income and profits taxes for the calendar year 1920 in the amount of $94,951.46. The only question in controversy is the value of good will, if any, on March 1, 1913. The petitioner contends for a value of $250,000 while the respondent denies that there was any good will on that date.

The petitioner was organized in 1892, being a reorganization of an earlier company. It issued $750,000 par value stock and $500,000 bonds and acquired coal properties in Illinois and ore properties in Missouri. The value at the time of incorporation was about equally divided between the coal properties and the ore properties. Improvements to both properties were charged to expense. The sum of $350,-000 was set up on the books as of March 1, 1913, as the value of the petitioner’s good will on that date. The average of net tangibles employed in the petitioner’s business for the five-year period prior to 1913 was $1,705,095.48, and the average of annual earnings for the same period was $116,825.47.

The five-year period prior to 1913 was a very bad one for the coal business. The coal deposits of the petitioner were of a high grade.

The above facts are all the facts that we can properly find from the record. There is no evidence which will enable us to say with any conviction that the petitioner had any good will on March 1, 1913. The contrary would appear from the evidence before us. Nor has the petitioner proved the circumstances of its sale in 1920 so that we may say that good will was sold. We must approve the deficiency asserted by the respondent.

Judgment will be entered for the respondent.  