*1302 Before MARQUETTE, MORRIS, GREEN, and LOVE.
This is an appeal from the determination of a deficiency in income tax for the calendar year 1920, in the amount of $3,649.57. The taxpayer alleges error on the part of the Commissioner in disallowing certain expenditures as ordinary and necessary business expenses.
FINDINGS OF FACT.
The taxpayer is a Pennsylvania corporation and engaged in the business of operating coal mines. Affiliated with the taxpayer for *1303 the purpose of a consolidated tax return were the Emmons Coal Mining Co. of West Virginia, the Marion Center Coal Mining Co., and the Fallen Timber Coal Co.
During the year 1920, the taxpayer and the affiliated corporations expended the following amounts for storage-battery locomotives, mine cars, and a cutting machine:
| Emmons Coal Mining Co. of West Virginia, storage battery locomotive | $5,412.00 |
| Fallen Timber Coal Co., cutting machine | 3,500.00 |
| Marion Center Coal Mining Co.: | |
| Storage-battery locomotive | 4,398.11 |
| Storage-battery locomotive | 4,000.00 |
| Mine cars | 2,125.00 |
*2432 A statement of the tonnage produced for the years 1918, 1919, and 1920, by the said companies, as shown upon their books, is as follows:
| Mines. | 1918. | 1919. | 1920. |
| Tons. | Tons. | Tons. | |
| Emmons Coal Mining Co. of West Virginia | 120,907 | 117,737 | 122,267 |
| Marion Center Coal Mining Co | 57,599 | 55,273 | 58,473 |
| Fallen Timber Coal Co | 74,467 | 58,463 | 59,399 |
The Commissioner refused to allow said expenditures as ordinary and necessary business expenses.
OPINION.
LOVE: The above expenditures were proper charges to capital account and not deductible as ordinary and necessary expenses. ; ; .
The deficiency is $3,649.57 for the calendar year 1920. Order will be entered accordingly.