Bank of London, etc. v. Commissioner

*1265OPINION.

Muedock:

The respondent and the petitioner must both fail in their respective affirmative contentions in these cases, for the reason that each has failed to offer sufficient proof to show that the Commissioner erred in his final determinations. The respondent contends that if the petitioner sustained losses it sustained those losses when the frauds were committed, and, on the other hand, if a deduction is claimed for a debt ascertained to be worthless and charged off, the debts could not be ascertained to be worthless and charged off until later years when the account was finally wound up. So far as the evidence discloses, the $10,000 might have been either a loss sustained or a debt ascertained to be worthless and charged off in the fiscal year ending January 31, 1919, which fiscal year began on February 1,1918.

But as to the deduction of $25,000, we must sustain the Commissioner. Here the burden of proof is upon the petitioner and the evidence does not show that this was a loss sustained in the fiscal year. It woukl not be inconsistent with the evidence to hold that any loss which was sustained in connection with the frauds in question was sustained in years prior to the fiscal year ended January 31, 1920. Parker Wire Goods Co., 8 B. T. A. 448; Peterson Linotyping Co., 10 B. T. A. 542; Southern School-Book Depository, Inc., 10 B. T. A. 930. The deduction is not proper as a debt ascertained to be worthless and charged off in this year, since the evidence does not show that it was ascertained to be worthless and charged off within the year and furthermore, if a debt at all, it appears to be only part of a debt, and the Bevenue Act of 1918 did not permit a debt recoverable only in part to be charged off in part. Davidson Grocery Co., 9 B. T. A. 390. The deficiency for each year as determined by the Commisisoner is approved.

Judgment will he entered in accordance with the foregoing opinion, under Rule 50.