Prudential Overall Supply - Page 23




                                       - 23 -                                         
               Petitioner was not required to determine with absolute                 
          certainty the useful life of the garments and dust control items;           
          rather, petitioner was permitted to make reasonable                         
          approximations of the useful life of the items based on a                   
          reasonable relationship to petitioner’s business practices.                 
               Respondent’s arguments do not overcome petitioner’s evidence           
          that supported the reasonableness of its methodology.                       
          Petitioner’s garment tracking system was used to track the                  
          processing of garments, but it did not provide information on the           
          service life of each garment.  Petitioner’s witness testified               
          that the tracking of millions of garments and dust control items            
          in service would not have been administratively or economically             
          feasible.  Any laboratory test, whether or not conducted, would             
          have produced results that documented the durability of a fabric            
          or garment, and, thus, the test results would reflect the                   
          physical life of the garment, rather than the useful life.                  
          Petitioner’s representations that certain clean room garments               
          could have a service life of up to 4 years were made subsequent             
          to the years in issue, see Banc One Corp. v. Commissioner, 84               
          T.C. at 499-500, and do not take into account the nonphysical               
          events that caused a garment to be withdrawn from service.                  
               As to petitioner’s use of the 65-percent polyester and                 
          35-percent cotton garments, petitioner’s industry expert                    
          explained that the industry did not use the 65-percent polyester            






Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  Next

Last modified: May 25, 2011