Denholm & McKay Co. v. Commissioner , 15 B.T.A. 225 ( 1929 )

OPINION.

Littleton:

In Palmetto Coal Co., 11 B. T. A. 154, 160, the Board said:

The only provision in the Revenue Act of 1921 which would result in greater tax than that provided by the Revenue Act of 1918, in so far as petitioner was concerned, was the elimination of the $2,000 credit in respect to net incomes in excess of $25,000 as set forth in section 236 (b). The Commissioner’s position would appear to be that if he found that a taxpayer’s net income was in excess of $25,000 in the above circumstances, the statute of limitations would not run, regardless of when such discovery was made. On the other hand, had the tax been no greater under the Revenue Act of 1921 than under the Revenue Act of 1918, that is, had the net income been less than $25,000, the Board rulings cited would apply.

It does not appear to us that the running of the statute of limitations can be contingent upon whether the net income is above or below $25,000 when ascertained after the four-year period has expired. If such were true, the running of the statute in this case would depend upon the amount of depletion and depreciation allowable.

We are, therefore, of the opinion that since on the basis of the return no additional tax was apparently due under the Revenue Act of 1921 and since the Commissioner did not require an additional return for the fiscal period, and did not ascertain a deficiency until after four years had expired from the date the return was filed, the assessment and collection of any additional taxes for the fiscal year ending July 31, 1921, is barred by the statute of limitations.

The foregoing opinion of the Board in the Palmetto Coal Co. case is controlling here and the deficiency claimed by the Commissioner for the fiscal year 1921 is barred.

In view of our decision as to the fiscal year ending January 31, 1921, petitioner admits the correctness of the deficiency of $7,615.24 for the fiscal year ending January 31,1922.

Judgment will be entered holding the deficiency for 1921 barred, and finding a deficiency of $7,615.2fi for the fiscal year 1922.