*1333OPINION.
Black :The problem presented in these proceedings is whether the respondent erred in including in gross income and disallowing as deductions therefrom the six amounts set out in our findings, totaling $91,048.86. The position of the petitioners is that they derived no gain or income from tile receipt of the several amounts in question, for the reason that, as petitioners contend, such amounts were the property of the particular corporation which advanced them, and were received by each petitioner merely as the agent for such corporation. On that ground petitioners contend they should never have reported the amounts in question as income or claimed them as deductions in their 1927 and 1928 income tax returns, and that whether such amounts constituted deductible expenditures of the corporation is not before the Board. The position of the respondent is that petitioners have failed to overcome the prima facie correctness of his determination that the amounts in question were income to petitioners and not deductible as claimed by them on their returns.
In view of the facts recited in considerable detail in our findings of fact, we must conclude that respondent was justified in including in petitioners’ gross incomes amounts which they received during the taxable years from corporations by which they were employed and which were charged on the books of the corporations as commissions paid to petitioners. We do not think petitioners have offered sufficient evidence to justify us in taking these amounts out of gross income. The burden rests upon the petitioners to prove either that these amounts were not income to them or that they were entitled to take them as deductions from their gross incomes. This is true regardless of the fact that the Commissioner may have proceeded upon a wrong theory in arriving at his determination (Edgar M. Carnick, 21 B.T.A. 12, 24; Altschul Tobacco Co. v. Commissioner (C.C.A., 5th Cir.), 42 Fed. (2d) 609, 610; Reinecke v. Spalding, 280 U.S. 227), or that he used incorrect methods of computation or incorrect methods or hypotheses in arriving at his determination, Bishoff v. Commissioner (C.C.A., 3d Cir.), 27 Fed. (2d) 91; Helen Pitts Parker, 14 B.T.A. 1185, 1197; Jacob F. Brown, 18 B.T.A. 859, 867; Uncasville Mfg. Co., 19 B.T.A. 920, 927; Atlantic Casket Co. v. Rose (C.C.A., 5th Cir.), 22 Fed. (2d) 800; Anderson v. Farmers Loan & Trust Co. (C.C.A., 2d Cir.), 241 Fed. 322; Benedict Crowell v. Commissioner (C.C.A., 6th Cir.), 62 Fed. (2d) 51.
The testimony of petitioner Charles J. O’Laughlin is to the effect that the resolutions set out in our findings were passed by the several boards of directors on the dates indicated; that the amounts of $19,438.76 and $48,165.41 were furnished him by the Central Lime & Cement Co. “ to promote new business and to maintain good will ”; *1334that he paid out all of those sums for that purpose; that he did not retain any of this money for himself; that some of the money was spent for or donated to Christmas basket funds, labor unions, prize fights, football games, banquets, and political organizations for campaign purposes; that he kept no record or list of any expenditure ; that he did not know to whom he made any of the payments, or the amounts or dates thereof; that “ it was all spent for the benefit of the Central Lime and Cement Company ”; that he made such expenditures merely as the agent for the Central Lime & Cement Co.; and that he “ never paid anything over $1,500 or more in any one year to any one man.” The testimony of petitioner John J. O’Laughlin was substantially the same as that of petitioner Charles J. O’Laughlin, except that it dealt with the amounts received by him from the other two corporations. We quote a part of the testimony of John J. O’Laughlin, as follows:
Q. Tell the Court as much as you can remember of the various classes and types of payments made by you and the method of making those payments.
A. The sales of this company were made within a radius of 150 miles from Chicago. The major portion of them was in the northern tier of counties of Indiana known as the Calumet industrial district. For the most part, expenses in connection with promotion of those sales were confined to politics, political contributions, entertainment of customers, directly and indirectly, and service in the way of expediting shipments. In this area there is a great number of political subdivisions, cities, towns, villages, counties and townships, and the officials are changed very rapidly, every two years in most cases. A considerable portion of this promotion money went for the election of those officials. Entertainments, such as road conventions, contractors’ conventions, and entertaining at various world series baseball games and football games and prize fights, and occasionally theatres and dinners. A small part was probably paid for services, but as I have mentioned — service in the way of special movement of cars and trains. I believe that covers about as much in a general way as I can recall.
* # * * * jfc *
Q. Are you able to state what portion of those amounts was paid for political campaign contributions and what proportion for Christmas presents, to expedite shipments, baseball tickets, or any other purpose?
A. No, I cannot. I would say that the political contributions was the greater amount. Further than that I could not say.
Q. You would not attempt to segregate those from the amounts paid for entertainment or expediting shipments?
A. No. I could not establish the ratio there.
Q. Were any of those amounts paid for commissions?
A. No, I think not.
On this showing petitioners ask us to hold in their favor. Of course if petitioners had made a proper showing that, after receiving certain commissions due others, they in turn paid them out to other individuals as commissions for sales which such other individuals had actually made for the companies, there would have been no *1335justification for including the amounts in petitioners’ income. Under such circumstances they would have been merely the conduit through which such payments passed. Dubiske v. Commissioner, 58 Fed. (2d) 51; Herbert Choynski, 14 B.T.A. 9. But they made no satisfactory showing of that kind. It is clear that the money was not disbursed by them as commissions to others.
Petitioners at the hearing and in their briefs laid a great deal of stress on the fact that the reason they made out their income tax returns the way they did, reporting the amounts received as commissions paid to them and taking equal amounts of deductions for commissions paid out by them, was because they were instructed by a representative of the collector of internal revenue to do it that way. No representative of the collector of internal revenue was present at the hearing and testified that he gave any such instructions, but, assuming that he did so, it seems clear that it was upon a representation made to him that these amounts were paid to petitioners as commissions, to be paid in turn by them to other individuals as commissions for sales made by them for the companies.
All the documentary evidence in these proceedings seems to make it clear that the corporations represented all along to the Government that these amounts were paid to petitioners as commissions and disbursed by them to others as commissions for sales made in behalf of the companies. In the first place the corporations charged the amounts on their books as commissions. The petitioners returned the amounts on their income tax returns as commissions received and then took deductions of equivalent amounts for commissions paid out to other individuals for sales made for the companies.
In a letter to the collector of internal revenue at Chicago, Illinois, shown in our findings of fact, one of the corporations, the Central Lime & Cement Co., represented that petitioner Charles J. O’Laugh-lin had used the money paid to him to pay “ to other individuals in amounts ranging from $10 to $500 for commissions on sales.” Was that true ? Evidently not, for Charles J. O’Laughlin testified at the hearing that the greater part of the amounts paid out by him was for very different purposes than commissions on sales.
When the Central Lime & Cement Co., of which petitioner Charles J. O’Laughlin was the secretary, wrote to the collector of internal revenue at Chicago, Illinois, as shown above, concerning these payments, it did not inform the collector that the money was disbursed by O’Laughlin for Christmas basket funds, labor unions, prize fights, foot ball games, political organizations, campaign expenses, and the like, as testified to at the hearing. What the letter did say was that the amounts were disbursed by O’Laughlin “for commissions on sales.”
*1336If it was not the desire to conceal something from the Government, why was not a frank disclosure made ?
Petitioner John J. O’Laughlin testified at the hearing, as we have already pointed out, that so far as he recalled none of the amounts paid him by the companies were paid out by him as commissions on sales.
In view of this testimony it is our conclusion that the evidence is not sufficient to overcome the prima facie correctness of the Commissioner’s determination.
Reviewed by the Board.
Decision .will be entered for the respondent.
Morris, AruNdell, and VAN FossaN dissent.