
    Ewa Plantation Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket Nos. 19221, 23610.
    Promulgated September 27, 1928.
    
      A. A. Ballantine, Esq., S. Milton Simpson, Esq., and Bernard Knollenberg, Esq., for the petitioner.
    
      M. N. Fisher, Esq., and L. G. Mitchell, Esq., for the respondent.
   OPINION.

Phillips:

The decision of the first of the issues involved in this proceeding is governed by our decision in Kahuku Plantation Co., 12 B. T. A. 977. The record in the two cases is substantially the same. On the authority of the decision in that case it is held that the Commissioner erred in including in 1920 income the payments received on account of the net losses to the 1921 and 1922 crops except to the extent that such losses were based upon acreage neither seeded nor planted. It also appears that the Commissioner overstated the total amount received and this should be corrected in' the recomputation.

The valuation of petitioner’s leasehold interests as of March 1, 1913, involves the same general considerations discussed in our opinion in Oahu Sugar Co., Limited, 13 B. T. A. 404. Much of the evidence is common to both proceedings. The evidence as to petitioner’s assets, earnings, costs, location, etc., are, of course, different. The leased premises which we are called upon to value were low lands near the coast. The plantation appears to have been fertile, producing an average crop of over eight tons an acre and the cost of irrigation was comparatively small. The cost of production was consequently less than' on many other plantations. This not only increased its attractiveness as an investment, but served to place the plantation in a better position than others to withstand the competition which would result from any reduction or elimination of the tariff. Here, as in the case of Oahu, there is much room for differences of opinion as to the value of the petitioner’s leasehold. Consideration of the detailed record which has been submitted leads us to the conclusion that on March 1,1913, it had a fair market value of $1,425,000, exclusive of the value of the improvements thereon.

Decision will be entered under Rule 50.  