
    Appeal of J. BACH CO.
    Docket No. 727.
    Submitted May 7, 1925;
    decided May 21, 1925.
    
      John McD. Fox, Fsq., for the taxpayer.
    
      John D. Foley, Esq., for the Commissioner.
    Before GRAupneií and Trammell.
    This appeal involves a deficiency in income and profits taxes for the fiscal years ended January 31, 1919, and January 31, 1920, in the aggregate of $3,034.19. It is the contention of the taxpayer that the deficiency should be disallowed because the inventories at the end of the respective fiscal years upon which the income for those years was reported in the original returns were not based upon cost or market value, whichever was lower, and that it should be permitted to amend its inventories in order to reflect the cost or market value, whichever is lower.
    BINDINGS OF FACT.
    The taxpayer is a Wisconsin corporation with its principal office at Milwaukee. It ivas engaged in the business of dealer in hides, pelts, furs, tallow, and wool.
    
      At the close of the fiscal years ended January 31, 1919, and January 31, 1920, inventories were taken upon what was then considered the market value of the goods. This value was determined by the principal stockholder and officer of the company, who had been engaged in the business for 35 years. One or more of the employees considered that the market value shown by the inventories was high and that the principal stockholder was optimistic as to business conditions in determining the valuations on the articles. Subsequent to 1923 and after the death of the principal stockholder, who made the valuations, the taxpayer corporation revised its closing inventories for the respective years involved and placed lower valuations upon certain of the articles included therein. It then offered to file amended returns based upon the changed inventories.
    The market for the goods dealt in by this taxpayer was unsettled and there was a difference of opinion among dealers and valuation experts as to what the market valuations were at the close of the respective years.
   DECISION.

The determination of the Commissioner is approved. There is no evidence as to the cost of the goods or that the revised inventories more accurately reflect the market value than the original inventories.  