*2540 1. Certain contributions made by the taxpayer are not deductible as ordinary and necessary business expenses.
2. On the evidence presented, the taxpayer is not entitled to additional depreciation over that allowed by the Commissioner.
*134 Before MARQUETTE and MORRIS.
This appeal is from a determination of a deficiency in income and profits taxes for the years 1918 and 1920 of $4,304.51 and $3,941.35, respectively, reduced by an overassessment of $142.78 for 1919. From the pleadings and depositions the Board makes the following
FINDINGS OF FACT.
The taxpayer is a corporation organized under the laws of the State of Tennessee, with its principal office and place of business in *135 Memphis. Its business is that of manufacturers of candy, grocers' sundries, roasters and blenders of coffee, and wholesale grocers. The building owned and occupied by the taxpayer was erected in 1904 of brick, with heavy wood columns and beams with a small portion of steel, at a cost of $186,162.40. It is located on the Illinois Central Railroad*2541 and the St. Louis and San Francisco Railroad. A number of freight and passenger trains pass by there daily.
The following deductions were taken by the taxpayer as ordinary and necessary expenses and disallowed by the Commissioner:
| 1919 | |
| Brotherhood of Railway Engineers | $35.00 |
| Railway Men's Magazine | 10.00 |
| Switchmen's Union | 10.00 |
| Yardmasters' convention | 5.00 |
| 19th Century Club - Girl's Welfare | 50.00 |
| Plymouth Community House | 10.00 |
| Farm Development Bureau | 100.00 |
| Park Aviation Field - Millington | 200.00 |
| War Department Vice Control | 15.00 |
| Total | 435.00 |
| 1919 | |
| Telegraph Messengers | $5.50 |
| Plymouth Community House | 5.00 |
| Police Relief | 5.00 |
| Total | 15.50 |
| $1920 | |
| Western Union Messengers' Christmas Dinner | $5.00 |
| Postal Messengers' Christmas Dinner | 5.00 |
| Railway Trainmen's Benefit | 2.00 |
| Total | 12.00 |
The Commissioner allowed a depreciation rate of 2 1/2 per cent based on the book value of "building assets" at the beginning of 1918 of $186,162.40, with subsequent additions. These assets, as shown on the books at 1918, were as follows:
| Building | $152,376.10 |
| Automatic sprinklers | 19,653.30 |
| Piping, fittings, and heating | 4,940.30 |
| Electric lighting | 3,059.94 |
| Plumbing | 1,955.56 |
| Elevators and gates | 4,177.20 |
| Total | 186,162.40 |
*2542 The taxpayer took a depreciation rate of 10 per cent on grocery shipping room, office, vault and engine room equipment, including *136 desks, tables, chairs, dressing rooms, electric fixtures and typewriters, billing, stenciling, adding and addressing machines, filing cabinets, safes, platform trucks, wheel barrows, grain scoops, scales, and packing tools, which the Commissioner reduced to 5 per cent.
Depreciation of autos and trucks was allowed at 25 per cent, while the taxpayer is claiming 33 1/3 per cent thereon.
DECISION.
The determination of the Commissioner is approved.
OPINION.
MORRIS: The contributions claimed by the taxpayer as deductible are not ordinary and necessary expenses paid in carrying on the business, within the meaning of section 234(a)(1) of the Revenue Act of 1918. ; .
The taxpayer admits that 2 1/2 per cent is a reasonable depreciation rate on the building, but claims a composite rate of 3 per cent on "building assets" on a March 1, 1913, value of $267,701.92. No competent evidence was introduced to sustain that*2543 value or to show their useful life. As the evidence was also insufficient as to the value and useful life of the other assets upon which additional depreciation is claimed, the values and depreciation rates used by the Commissioner must be approved.