*278OPINION.
GREbn: Section 234(a) (7) of the Revenue Act of 1918 and the applicable portion of section 234(a) (7) of the Revenue Act of 1921 are identical and read as follows:
Sec. 234. (a) That in computing the net income of a corporation subject to the tax imposed by section 230 there shall be allowed as deductions:
(7) A reasonable allowance for exhaustion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence.
The basis for the computation of depreciation in the case of property acquired subsequent to March 1, 1913, is its cost. Where property is acquired by a corporation in exchange for its stock, the basis for the depreciation deduction is the value of the stock. Failure to establish this value leaves the taxpayer without a basis for the computation of depreciation.
We do not believe that the value of the stock of this corporation at the time it was exchanged for the assets is proven by proof of exchange of two small blocks of stock for notes. See Appeal of Automatic Transportation Co., 3 B. T. A. 505. Nor do we believe that, under the circumstances of this appeal, proof of the book entries made at the time of the acquisition of the machinery, etc., is sufficient to overcome the presumption of the correctness of the Commissioner’s findings as to the value of the assets. The answer makes these values a clean-cut, distinct issue. The proof shows that used machinery and equipment were exchanged for stock. No witness gave us his statement of the actual worth of the property.
The taxpayer argues that the issuance of stock at par in exchange for assets is, because of the requirements of the West Virginia statutes, conclusive proof of the value of the assets so acquired. While we are not inclined to disregard entirely proof of such a nature, it is, standing alone, wholly insufficient, and, .to make it of value, it must be supported by other evidence that is clear and convincing. See Appeal of Barnes Coal & Mining Co., 3 B. T. A. 891.
The Commissioner in this appeal contends that the value of assets for the purpose of computing the deduction for depreciation, .is limited by section 326 and section 331 of the Revenue Acts of 1918 and 1921. It seems to us that the basis for the computation must be determined in accordance with section 234(a) (7) of the Revenue Acts of 1918 and 1921, and that invested capital must be determined in accordance with the applicable statutes. It is quite possible, starting from the same fact foundation, by the application of the two different sections, to arrive at two entirely different values for the same piece of property. But these values are not .interchangeable. Our conclusion is that depreciation must be com*279puted in accordance with section 234(a) (7) of both Acts and that it is unaffected by sections 326 and 331 of such Acts. Appeal of Strong, Hewat & Co., 3 B. T. A. 1035.
The Commissioner’s determination of values was apparently made upon the assumption that sections 326 and 331 were controlling, and is erroneous to the extent that the values thus determined are below the true values. The taxpayer has not provided us with a fact basis for a new determination of values, and we are therefore constrained to affirm the Commissioner.
The deficiencies are $1,1¡.S2.1¡.8 for 1920 and $2,166.14- for 1921. Order will be entered accordingly.