The Cleveland Trencher Company - Page 6

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               The record contains a credit memo on petitioner's letterhead           
          to AA&H dated October 25, 1989, bearing an order date of                    
          October 24, 1989, and referring to a "commission credit for                 
          Turkey 25 contract" in the amount of $1,176,691.86.  The record             
          contains a series of documents beginning with an advice dated               
          July 14, 1988, from Chase Manhattan Bank in the United States to            
          Chase Manhattan Bank, Istanbul, Turkey, to pay the bid bond under           
          the second agreement for the sale of 25 trenching machines,                 
          shipping and insurance documents indicating that at least 23 of             
          the 25 trenching machines under the second sales agreement had              
          been shipped during the fiscal year ended September 30, 1989,               
          culminating in petitioner's invoice to the Turkish Government               
          that, as of February 27, 1990, the balance due petitioner on the            
          sale of 25 trenching machines amounted to $1,327,980.84, and                
          that, as of March 9, 1990, petitioner had not yet been paid this            
               On petitioner's Form 1120, U.S. Corporation Income Tax                 
          Return, for its fiscal year ending September 30, 1989, petitioner           
          accrued a deduction of $1,176,692 for commissions.  Respondent              
          disallowed $168,099 of the claimed deduction on the ground that             
          petitioner had not established that this amount had been paid or            
          incurred for the purpose designated or that it qualified as a               

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