*2186 The petitioner kept its books on a fiscal year basis, closing its books as of November 30, 1923, but filed its return for the calendar year 1923. Held, the petitioner should have filed its return for the fiscal year ended November 30, 1923, and the Commissioner committed no error in so determining a deficiency in tax.
*169 The Commissioner determined a deficiency in income tax for the Fiscal year ended November 30, 1923, in the amount of $685.69.
The petitioner insists that its return was properly prepared and filed for the calendar year 1923. If so determined, there is no deficiency.
The case is submitted on admissions in the answer, testimony at the hearing and exhibits.
FINDINGS OF FACT.
The petitioner is a corporation (retired from active business), with its office care of C. W. Endel, formerly president thereof, 152 West 42nd Street, New York, N.Y.
The books of the corporation were kept on a fiscal year basis and were closed as of November 30, 1923, at which time they showed a net profit of $7,485.51.
The corporation*2187 filed a return for the calendar year 1923, showing a loss of $4,799.53
*170 No inventory was actually taken as of December 31, 1923, but an inventory was then estimated. The books were not closed as of that date.
For 1924 the corporation filed its tax return on a fiscal year basis, beginning December 1, 1923, and ending November 30, 1924. It filed its tax return on the same fiscal year basis for 1925. No permission to change from a calendar year to a fiscal year basis for filing tax returns was sought of or granted by the Commissioner of Internal Revenue.
OPINION.
SEAWELL: The law applicable in this case is section 212(b) of the Revenue Act of 1921, which provides in part as follows:
The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; * * *
The evidence indicates that petitioner's books were actually closed as of November 30, 1923, and there is no evidence of the closing of the books at any other date during the 1923 calendar year, though an estimated inventory was*2188 taken at the close of such calendar year. The evidence also shows that the tax returns were made on the fiscal year basis for 1924 and 1925 - the fiscal year running from December 1 to November 30.
In our opinion, petitioner had no right to make its 1923 return on a calendar year basis while keeping its books on a fiscal year basis, as the evidence shows it did. ; .
The fact that petitioner in its next return (1924) reported on the same fiscal year basis, December 1, 1923, to November 30, 1924, is rather an indication that it recognized that it was really operating on a fiscal year basis. It is shown by the evidence that no permission to make any change in its method of keeping its books and making its return was asked of the Commissioner.
The case of the , cited and relied on by petitioner, is not similar in its facts to the instant case. In that case the taxpayer not only rendered its returns on a calendar year basis, but also kept its books on that basis.
We find no error in the instant case in the determination of*2189 the Commissioner.
Judgment will be entered for the respondent.