*4176 Under the evidence, held, the petitioner is not entitled to have its tax liability for the fiscal years ended June 30, 1919, and June 30, 1920, computed under the provisions of sections 327 and 328 of the Revenue Act of 1918.
*138 This proceeding is for the redetermination of deficiencies in income and profits taxes asserted by the respondent in the amounts of $1,507.26 for the fiscal year ended June 30, 1919, and $8,906.95 for the fiscal year ended June 30, 1920. The petitioner alleges that the respondent erred in refusing to grant it special assessment under the provisions of sections 327 and 328 of the Revenue Act of 1918.
FINDINGS OF FACT.
The petitioner is an Illinois corporation with its principal office and place of business at Chicago. The petitioner's profit and loss accounts for the fiscal years ended June 30, 1919, and June 30, 1920, and its balance sheets as of June 30, 1919, and June 30, 1920, are as follows:
| Profit and loss accounts | ||
| Year ended June 30, 1919 | Year ended June 30, 1920 | |
| Sales | $306,749.70 | $520,467.93 |
| Cost of sales | 252,598.05 | 427,949.48 |
| Gross profit | 54,151.65 | 92,518.45 |
| Selling and administrative expenses | 38,207.84 | 62,916.40 |
| 15,943.81 | 29,602.05 | |
| Other income | 4,725.81 | 9,837.63 |
| Net income before deducting Federal income taxes | 20,669.62 | 39,439.68 |
| Federal income taxes | 835.59 | 3,200.45 |
| Net Income | 19,834.03 | 36,239.23 |
*4177 *139
| Balance sheets | ||
| Year ended June 30, 1919 | Year ended June 30, 1920 | |
| ASSETS | ||
| Cash | $1,407.18 | $2,585.68 |
| Liberty bonds | 1,833.40 | 83.40 |
| Employees' Liberty bonds | 25.00 | |
| Accounts receivable | 21,576.14 | 39,399.77 |
| Bills receivable | 380.00 | |
| Merchandise inventory | 34,478.40 | 56,221.70 |
| Bonds | ||
| Machinery and equipment | 6,257.34 | 7,317.19 |
| Good will | ||
| 65,957.46 | 105,607.74 | |
| LIABILITIES | ||
| Accounts payable | 19,768.52 | 12,447.85 |
| Notes payable | 4,000.00 | 27,000.00 |
| Reserve for depreciation | 1,342.13 | 2,073.85 |
| Capital stock | 5,000.00 | 5,000.00 |
| Surplus | 35,846.81 | 59,086.04 |
| 65,957.46 | 105,607.74 |
OPINION.
MARQUETTE: The petitioner contends that during the fiscal years ended June 30, 1919, and June 30, 1920, there existed abnormalities affecting its income and invested capital which entitle it to relief under the provisions of sections 327 and 328 of the Revenue Act of 1918. All of the material allegations of the petition are denied by the respondent's answer and the only evidence presented in support of the petition consists of a comparative profit and loss statement for the years 1915 to 1927, inclusive, and a comparative balance sheet for*4178 the same period, parts of which pertinent here are set forth in the findings of fact. These exhibits fail to show that there existed during the years under consideration any abnormalities affecting either the petitioner's income or invested capital which would entitle it to the relief claimed.
Judgment will be entered for the respondent.