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8/31/92, petitioner claimed a deduction for rent that was $91,681
higher than the deduction it had claimed for TYE 8/31/91. If the
increase in rental payments was attributable to the MIC lease,
then petitioner paid MIC an amount corresponding to slightly less
than 11-1/2 months rent. The lease might therefore have taken
effect within the first few weeks of TYE 8/31/92.
Corroboration of this inference can be found in the fact
that after a delay of 1-1/2 years due largely to its inability to
comply with the county parking requirements, petitioner commenced
remodeling work in October 1991, the second month of TYE 8/31/92.
To have proceeded with its remodeling plans before securing
additional parking space in defiance of the Building and Safety
Department would have been self-defeating and utterly
inconsistent with the deferential and responsible attitude that
petitioner’s management had hitherto displayed in its dealings
with the department. If petitioner began leasing the property
just after the start of TYE 8/31/92, there is a high probability
that by the end of TYE 8/31/91 either there was an agreement in
principle with MIC or the county had rendered its decision
denying approval to petitioner’s plan to purchase the property.
In either case the abandoned purchase plan could not justify any
part of the accumulations at the end of TYE 8/31/91. Having
failed to fix the chronology of these events more precisely in
relation to the close of TYE 8/31/91, petitioner has not
satisfied its burden of proof.
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