*1114OPINION.
Geeen :The issues presented by this appeal for determination are: (1) What value, if any, should be attributed to the Arter lease for invested capital and depletion purposes; (2) what is the proper rate of depletion on the Gray and Baker properties; (3) whether or not the Commissioner erred in his adjustment of the depreciation rates on machinery and equipment.
Counsel for the petitioner contends that the value of the Arter lease at the time it was acquired by the petitioner was $33,000 and *1115that this amount should be used in computing the invested capital and depletion. This contention seems to be based on the fact that the lease was paid in to the taxpayer corporation for stock having a par value of $33,000. No evidence was submitted to show that the stock had any value or that the petitioner had any assets of value either before or after the issuing of the stock. Neither does the record show that the lease had any cost to Miller Brothers or to the taxpayer corporation. The consideration recited by the lease was the 25-cent royalty to be paid on each ton of coal mined and the one-cent royalty on the coal or other mineral transported across the Arter property. This alone is not sufficient to show that the lease had any value. Appeal of Bader Coal Co., 2 B. T. A. 239.
It was suggested that due to the development of the property by the petitioner’s assignors, the petitioner was entitled to "discovery value on the lease under the provisions of sections 214(a) (10) and 234(a)(9) of the Revenue Acts of 1918 and 1921. Without going into the question as to whether or not the property in question was located in a proven field, we are able to dispose of this question by calling attention to the fact that we have been unable to -find that the lease had any value, and as a result can not hold that it had value “ materially disproportionate to cost ” as is necessary for the application of sections 214(a) (10) and 234(a) (9) of the Acts mentioned. See Appeal of H. E. Sadler, 4 B. T. A. 1014.
In arriving at the rate of depletion for the Gray and Baker properties, the Commissioner has accepted the figures as to cost and recoverable tonnage submitted by the petitioner in its valuation schedule. Regarding the rates thus arrived at, the petitioner’s counsel has set forth in his brief certain statements to show that the recoverable tonnage set out in the valuation schedules was excessive and greatly overstated; that the coal vein, instead of being of an average thickness of 5 feet as set forth in the schedule, pinched down in places to a thickness of only 20 inches, averaging only abgut Sy2 feet; and that the recoverable tonnage was in fact only 400,000 tons. Whether this is true or not we have no way of knowing. Opportunity was offered the petitioner at the hearing to submit such material evidence as was deemed necessary to prove its case, but no effort was made to prove the statements set forth in the brief. We are bound in our decision by the evidence before us and can not go outside of the record in arriving at the deficiency.
There is an intimation, nothing more, in the record, that due to the expense of mining the remainder of the coal, the recoverable coal has been exhausted and that the depletion should be computed on the basis of the coal extracted at the time operations were discontinued in 1925. We can not, however, decide cases on intimation.
*1116With reference to the depreciation on machinery and equipment, we must also find in favor of the Commissioner. To substantiate the petitioner’s claim in this matter we have the opinion of T. W. Miller, treasurer and general manager of the taxpayer corporation, and his opinion on the items about which detailed information is given does not support the claims of the petitioner. The petitioner seeks to have steam shovels depreciated at the rate of 20 per cent, whereas the testimony offered indicates that such shovels have at least a life of seven or eight years or more. With reference to the horses used, the petitioner claims depreciation at the rate of 25 per cent and the Commissioner has allowed 20 per cent, but the petitioner’s witness testified that 15 per cent was proper. On such proof we do not feel justified in disturbing the rates used by the Commissioner.
Judgment will be entered for the Commissioner.