*381OPINION.
Arundell :This proceeding was submitted for decision without oral argument or briefs. Respondent seems to have included the item of $19,158.88 in petitioner’s gross income on the theory that it represented interest constructively received in the taxable year or else that the bonds received in payment constituted income in that amount. On either theory we think petitioner should prevail.
In November, 1924, when bonds of a par value of $335,000 were issued and delivered to petitioner .covering his subscription, the corporation was without funds to pay him the amount of interest *382which may have been due and requested that he accept its second mortgage bonds in settlement of such indebtedness. Notwithstanding the fact that the bonds lacked value, he agreed to accept them. We find in this situation no basis for saying that petitioner has received taxable income.
The respondent has imposed a negligence penalty in the amount of $102.57. The petitioner has offered evidence as to only the item entering into the determination of the deficiency found against him and no direct evidence covering the matter of the penalty. Under the circumstances we have no cause but to affirm the respondent on this issue.
Decision will be entered, under Bule 50.