Comtek Expositions, Inc. - Page 6

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          otherwise reconcile the inconsistency between the percentages of            
          stock ownership, on the one hand, and the agreement for                     
          allocations of percentages of net profits from trade shows to the           
          stockholders, on the other.  The stockholders’ agreement also               
          contains no provision for payment of the net profits of the trade           
          shows allocated to the stockholders, whether by payments as                 
          dividend distributions with respect to stock, by payments of                
          compensation to stockholder-officers, or in some other fashion.             
          In any event, petitioner has never declared a dividend.  In                 
          addition, Schedule E, Compensation of Officers, for each of                 
          petitioner’s Forms 1120 in evidence for prior years, as well as             
          the taxable periods at issue, shows compensation paid to the                
          stockholder-officers as “None”.                                             
               From 1990 through July 31, 1996, petitioner conducted trade            
          shows and exhibitions primarily in the former Soviet Union5 with            
          Crocus, a Russian joint-stock company solely owned by Agalarov.             

               5The stipulation of facts states that foreign trade shows at           
          issue were conducted in former Soviet Bloc countries.  We may               
          disregard stipulations between parties where justice requires if            
          the evidence contrary to the stipulation is substantial or the              
          stipulation is clearly contrary to facts disclosed by the record.           
          See Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. 181, 195                 
          (1989); Jasionowski v. Commissioner, 66 T.C. 312, 318 (1976).               
          The record discloses that all trade shows at issue in this case             
          were conducted in the former Soviet Union.  Although trade shows            
          were also conducted in Romania, a former Soviet Bloc country that           
          was not part of the Soviet Union, the trade shows in Romania are            
          not at issue in this case.  We therefore disregard the parties’             
          stipulation and find that foreign trade shows at issue in this              
          case were conducted in the former Soviet Union.                             





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