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In the instant case, the PPM states that the EMS was
purchased by Dard from CEF, an unrelated party, for $337,000 in
1980. That same year, Nisona purchased the EMS from Dard for
$9,342,000, and Sav-Fuel purchased the EMS from Nisona for
$10,350,000. The price paid by Sav-Fuel for the EMS in 1980 was
over 3,000 percent greater than the price paid by Dard for the
same property in the same year.9 There is no evidence in the
record and petitioner has offered no explanation as to the
massive difference in the purchase price of the EMS. Indeed,
petitioner concedes on brief that the price Sav-Fuel paid for the
EMS was “excessive” and contends that a more plausible value for
the EMS was $5 million. Petitioner testified at trial that he
performed his own valuation analysis of the EMS after respondent
disallowed the deductions. In making this argument as to the
appropriate value of the EMS, petitioner relies on evidence that
was not admitted into the record.10
It is clear that both Sav-Fuel and Nisona grossly overpaid
for the EMS and that these gross overpayments were intentionally
910,350,000 � 337,000 = 30.71, or 3,071 percent.
10Petitioner attached to his posttrial brief an affidavit
from a certified public accountant as to the value of the EMS.
However, this affidavit was not previously stipulated or offered
and admitted into evidence at trial. Accordingly, petitioner is
not entitled to rely on the affidavit as support for his
argument. Other than this affidavit, petitioner presented no
other documents supporting his valuation of the EMS.
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