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the freezing of the canal was “not a condition which the taxpayer
desired to bring about”, and (3) “depreciation may be taken when
depreciable property is available for use 'should the occasion
arise,' even if the property is not in fact in use.” Id. at 198.
In arriving at this finding, the court noted that the taxpayer
was already in the business for which the depreciable asset had
been purchased.
Property, once used in business, remains in such use until
it is shown to have been withdrawn from business purposes. P.
Dougherty Co. v. Commissioner, supra. Petitioner's rigs were
available for drilling, though it was unable to obtain profitable
contracts. Petitioner did not withdraw the rigs from business
use. On this evidence, we hold that petitioner's use of the rigs
was such that depreciation deductions are allowable.
Petitioner has prevailed on the sections 382 and 383 issues;
therefore, the issue of whether petitioner is liable for
substantial understatement penalties is moot.
To reflect the foregoing,
An appropriate order
will be issued, and
decision will be entered
under Rule 155.
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