OPINION.
James :
The taxpayer appeals from the action of the Commissioner in rejecting as a part of claimed invested capital the sum of $1,250,000 representing the common stock of the taxpayer issued as a part of the $2,500,000 of capital stock, as above set forth in the findings of fact, and from the determination of the Commissioner rejecting as deductions from income for the years 1918 and 1919 the sums of $24,960.73 in each of the said years, and $23,882.29 in the year 1920.
The taxpayer has introduced the record of the original transaction between itself and the Syndicate Trust Co., apparently relying upon that record alone as establishing, first, its right to include in invested capital the sum of $1,250,000, and, second, its right to the deductions from income above mentioned. The record so introduced shows that the capital stock of the taxpayer was issued to the owner of the property transferred in the sums mentioned. No testimony was introduced to show the value of that property at the time it was transferred to the taxpayer and none was introduced to show the value of the property on March 1, 1913.
Section 326 of the Revenue Act of 1918 provides as to invested capital that there is included among other things " actual cash value of tangible property other than cash bona fide paid in for stock or shares at the time of such payment " and " intangible property bona fide paid in for stock or shares prior to March 3, 1917, in an amount not exceeding (a) the actual cash value of such property at the time paid in, (b) the par value of the stock or shares issued therefor, or (c) in the aggregate 25 per centum of the par value of the total stock or shares of the corporation outstanding on March 3, 1917, whichever is lowest."
It does not clearly appear from the record whether the $1,250,000 of stock in question was issued in payment or part payment for the leasehold or for the tangible property thereon. It does not appear from the evidence introduced what was the actual cash value of the property paid in, whether leasehold or building, and it does not appear from the evidence what was the total outstanding capital stock of the taxpayer on March 3, 1917. On this branch of the case it is obvious that there is no evidence before the Board having any material bearing upon the issue between the taxpayer and the Commissioner.
With respect to the deductions claimed on account of exhaustion of the leasehold, it has been held in the Appeal of Hotel de France Company, 1 B. T. A. 28, and Appeal of Grosvenor Atterbury, 1 B. T. A. 169, that the deduction from gross income of " a reasonable allowance for the exhaustion, ivear, and tear of property used in the trade or business" is applicable to leaseholds but must be based upon its cost or its value on March 1, 1913. The taxpayer having introduced no testimony as to the value on either the date it acquired the property, or March 1, 1913, there is nothing in the record before us upon Avhich we could find that the Commissioner has erred in his determination with respect to the deduction claimed or with respect to the resultant deficiencies in tax. For these reasons the determination as asserted by the Commissioner must be affirmed.