Northwestern Indiana Telephone Company - Page 67

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            petitioners' part, rather than actual future needs that NITCO                              
            anticipated and planned to meet during 1987 through 1989.  It was                          
            not until late 1992 and 1993 that petitioners first advised                                
            respondent's counsel that these asserted needs were among NITCO's                          
            alleged reasonable business needs.  Moreover, these asserted                               
            future needs were too vague and uncertain to be considered                                 
            reasonably anticipated business needs of NITCO during 1987                                 
            through 1989.  Sec. 1.537-1(b)(1), Income Tax Regs.                                        
                  With respect to possible telephone company acquisition and                           
            cellular telephone diversification, the record is not clear                                
            whether Mr. Mussman intended to have NITCO or individual members                           
            of the Mussman family, undertake and benefit from such activities                          
            or ventures.  Although NITCO applied for a cellular telephone                              
            license with respect to the Indiana RSA #1 area in 1988, the                               
            record reflects that Mr. Mussman's plan and intention was to                               
            transfer the cellular telephone license rights that were obtained                          
            to Serv-U-Cellular, another corporation that he and one or more                            
            of his sons, individually, would own.  Petitioners have failed to                          
            establish that telephone company acquisition and cellular                                  
            telephone diversification were reasonable business needs of NITCO                          
            during 1987 through 1989.  Rule 142(a).                                                    
                  In conclusion, we find that NITCO's reasonable business                              
            needs, during 1987 through 1989, were as follows:                                          








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