Goodell-Pratt Co. v. Commissioner

*1237OPINION.

Steenhagen :

The petitioner introduced in evidence a copy of the findings of fact made by the Board in its earlier decision in Goodell-Pratt Co., 3 B. T. A. 30, and also asked at the hearing that the Board take judicial notice of its earlier decision. Judicial notice was taken of the fact that such decision had been made, and the copy thereof was received as evidence of the facts therein found, objections thereto being overruled. By oral testimony such facts were then proven to have been no less applicable to 1920 than to the earlier years. No countervailing evidence was introduced.

The respondent argues that since the petitioner chose in earlier years to charge off as expense the cost of the assets in question, it is deprived of the advantages of having them now considered as surplus and so within invested capital. The same argument was'considered and held ineffective in Goodell-Pratt Co., supra, and we adhere to that view.

Respondent attacks the sufficiency of petitioner’s evidence upon the theory that it would be erroneous to take judicial notice of the facts found in the prior case, and that such findings are not frima fade evidence in this case. By thus eliminating from the present record the facts previously found, there would be nothing upon which petitioner could stand. The prior report was actually offered i and received in evidence, and it is therefore unnecessary to consider! the question of the effect or extent of judicial notice. To notice a fact judicially is a substitute for evidence of the fact, Wigmore on Evidence, 2d ed., vol. 5, ch. XC, and as the findings were introduced, we are not called upon to determine whether it would have been sufficient or proper to give judicial notice to the published facts.

It is said by respondent that under the statute, section 906 (f), the findings are frima facie evidence of the facts stated only in a proceeding in court. We are of opinion, however, that there is nothing *1238in the statute, and we are cited to no decision of the equity courts of the District of Columbia, which prohibits the Board from giving it such force. In Union Metal Mfg. Co., 4 B. T. A. 287, the Board decided whether under the Revenue Act of 1924 a decision with its findings of fact as to liability for one year was res adjudicata as to the same facts involved in the question of liability for a later year. The doctrine of res adjudieata was not applied, but as to the effect of earlier findings of fact, the Board said:

When the taxpayer put in the findings of fact formerly made by the Board, the facts so found were prima, facie correct and served as evidence. Without more the petitioner had established its casé, for, irrespective of the doctrine of res adjudicata, the Board’s findings are entitled to the weight of the presumption of correctness. The Commissioner had the burden then of going forward and establishing the preponderance.

This is what the petitioner did in the present case, and added the supplementing evidence to project the premises into 1920 and the concession that for 1920 the computation should be adjusted by reason of the prior years’ taxes.

It seems to us sufficient to make a case. To hold with respondent that it is not sufficient would be tantamount to a requirement that the facts previously found must be established de novo — a mere duplication of the evidence already introduced and fully considered in the prior proceeding. If the prior findings are in truth not correct, their prima faeie effect may still be overcome by either party through the introduction of evidence. This course was open to respondent in the present case but no evidence was introduced in his behalf and no error of fact has been suggested. No substantial reason is advanced for a conclusion at variance with the earlier decision, and in view of the facts already found and the additional evidence, we hold that the invested capital for 1920 should include the amount of $280,513.26 with proper adjustments.

. Judgment will be entered on 15 days’ notice, vmder Bule 50.