OPINION.
Marquette :The only question here involved is whether petitioner, in making up his tax returns for the years in question, is to inventory his ewes at prices obtained in his county and thereabouts, or whether he must follow the values fixed by the Commissioner and taken from other States and somewhat distant localities.
We are of the opinion that the petitioner was right, and the Commissioner wrong, as to the basis of inventory prices.
Three witnesses testified in support of the petitioner. All were experienced in raising, buying and selling ewes in and near San Joaquin County. Their testimony showed that the fair market price for ewes, in that locality, was from $20 to $22 in December, 1917; $20 to $25 in 1918, and $10 to $14.25 in 1919. This testimony was not contradicted.
It is not clear from the record just what localities were meant in the Commissioner’s deficiency letter, in which it was stated that the values which he would apply were derived from “ inventory values of sheep, * * * in neighboring States of the northwest.” It *1100might perhaps be inferred, from some of the questions on cross-examination, that Montana and Idaho were the northwestern States referred to. But that is not material. Petitioner was located in, or near, central California. There he bought and sold his sheep. That locality was his market, and it is by the prices of that market, and not some distant one, that the value of his goods should be fixed. Those prices and values petitioner has fairly established by the testimony. On the basis of those prices his valuation, per head, of his ewes was correct, and the inventories in question should be computed by using the prices claimed by the petitioner as set out in the findings of fact.
Judgment will be entered on 15 days’ notice, wider Buie 50.
Considered by Phillips, Milliken, and Van Fossan.