- 6 - Once again, we are required to distill truth from falsehood. See Diaz v. Commissioner, 58 T.C. 560, 564 (1972). Having observed Mr. Norton while he was testifying, we find his testimony as to the source of the $86,155 deposit credible. We are satisfied that there was a true debtor-creditor relationship and that this relationship created an unconditional and enforceable obligation to repay the moneys advanced. Consequently, we conclude that Northridge’s gross receipts for 1993 were not underreported as respondent maintains. B. Cost of Goods Sold The parties stipulated that Northridge’s cost of goods sold for 1993 was $945,143, rather than $945,732, as reported on the Nortons’ original and amended Schedules C. In arriving at this amount, the auditing agent reviewed substantiating documentation. At trial, the Nortons sought an additional $4,650 for cost of goods sold, claiming that this amount was paid to David & Sons for cabinets and other items. In support of this claim, the Nortons introduced an undated invoice, as well as a copy of their check ledger. The check ledger for February 12, 1993, indicated that a check was made payable to “David & Sons” in the amount of $4,450. No canceled check to show that the $4,650 invoice was paid was introduced. We do not believe that, in general, a party to a stipulation should be allowed unilaterally to disregard the stipulation. EvenPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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