*93OPINION.
Milltken:Section 234(a)(1) of the Revenue Act of 1918 provides that, in computing the net income of the corporation, there shall be allowed as deductions all of the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for services actually rendered. We were not informed whether the petitioner maintained its books of account upon the cash receipts and disbursements basis or upon the accrual basis. If upon the former, the additional salaries sought to be deducted from income, for the year 1918, must have been actually paid. The additional salaries were not paid during the year 1918. If the books of account were maintained upon the accrual basis for the year 1918, a liability must have been incurred in that year to pay the additional salaries in question, in order that the salaries could be claimed and allowed as a deduction in computing net income. The president of the petitioner testified that he was unable to state whether the agreement concerning the additional salaries for the year 1918 was entered into in the year 1918 or the year 1919, and consequently no liability to pay additional salaries having been *94proven for the year 1918, no deduction from income can be allowed therefor.
Petitioner avers that if the additional salary deductions are not allowed for the year 1918, the same certainly consitutes a deductible item from income for the year 1919 when the salaries were actually paid. It may be that such additional salaries paid in 1919, when added to the regular salaries paid in 1919, constitute a reasonable compensation for personal services actually rendered in that year, but we have no evidence before us concerning the salaries paid, services performed, or the volume or character of business done during the year 1919, and we are, accordingly, without the necessary facts to determine the issue for that year.
Judgment will be entered for the respondent on 15 days’ notice, under Rule 50.
Antradeul and Phillips dissent.