*409OPINION.
Ivins:The Commissioner contended that section 331 of the Revenue Act of 1918 applied to this taxpayer. It is unnecessary to determine this question. The other question raised relates to the value of intangibles acquired upon the organization of the taxpayer. Upon that issue the evidence made available for presentation by the taxpayer’s representatives was very meagre. The taxpayer was dissolved in 1921 and all of its books and records were removed to Europe. No data whatever were presented to us affording information as to the method by which the organization of the taxpayer was effected in 1919, no balance sheets or accounting records relating to the predecessor business (with the exception of the tax returns of one *410company), nothing as to the accounts of the taxpayer, and no information as to any of the companies that might assist in a determination of the valuation of tangible property, much less the value of intangibles.
The taxpayer alleged in its petition a valuation for intangible assets acquired on organization by the issuance of stock therefor as follows:
Formulae_$365, 000. 00
Good will_ 113, 685. 51
Trade-marks_ 1, 6S0. 00
Mailing lists_ 6, 000. 00
The Commissioner denied the allegations by his answer. The only attempt made at the hearing to prove such value was through the introduction, as evidence, of the tax returns of Dae Health Laboratories, showing therein the net income of that company as reported for the several years.
Calling the average net income of Dae Health Laboratories about $250,000, the taxpayer then attempted to prove the valuation of intangibles in the following way:
It deducted the alleged value of intangibles ($486,365.51) from the par value of the taxpayer’s capital stock ($1,963,000) and called the balance the value of the tangible assets. It then figured that 10 per cent would be a fair and proper return upon tangible property, and so deducted 10 per cent of $1,476,634.49 (the difference between the par of capital stock issued, $1,963,000 and $486,365.51, the alleged value of intangibles) from the alleged average income of the Dae Health Laboratories and, getting a resultant of some $105,000, proceeded to capitalize that amount at 15 per cent, thereby arriving at a claimed value for intangibles of some $705,000, by which it justified its valuation of $486,365.51.
The very foundation of any formula or method of determining the valuation of intangible property is knowledge, exact as possible, of the cost of tangible property, associated with the intangible, in the production of income. Its very foundation is knowledge, exact as possible, of the cost value of tangible property. That necessary element is lacking in the present appeal. The deduction of the alleged value of intangibles from the par value of stock constitutes •the use of an assumption to prove its own verity as a fact, instead of proving that fact by the use of other facts. The attempt involves a circuitous process of reasoning which is utterly lacking in logic. Its only defense is that it is the best that could be done under the circumstances. It is insufficient to convince us that the determination made by the Commissioner was incorrect. That determination must be sustained upon the authority of Appeal of *411W. E. Marshall & Company, 1 B. T. A. 175; Appeal of York Hotel Corporation, 1 B. T. A. 672; Appeal of John H. Wood Company, 1 B. T. A. 1098; Appeal of Rothenberg & Company, 1 B. T. A. 1197. See also, Appeal of Central Consumers Wine & Liquor Company, 1 B. T. A. 1190; and Appeal of Wright’s Automatic Tobacco Packing Machine Company, 1 B. T. A. 1260.
On reference to tbe Board, Arttndell took no part in the consideration.