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In 1930 P, at a cost of $36,000, acquired a bottling plant in Bloomington, Illinois- allocating $30,500 to buildings and $5,500 to land. In 1938, P decided to build a new plant. It decided it had no use for the old plant and wished to dispose of it. P entered into a contract with a contractor to construct a new plant. The new plant was completed in 1939. The contractor furnished the necessary material and labor and completed the building in accordance with the plans and specifications prepared by its architect for a total of $72,500. Of this sum, the contractor was paid $64,500 in cash and accepted taxpayer's old buildings and the land upon which the old plant was located at a valuation of $8,000, and the old building and land were transferred to the contractor. The Commissioner adjusted the average base period net income for the year 1939 as computed by the taxpayer by deducting the amount of $22,886.79 as a loss not coming within the scope of Sec. 112(b)(1) of the Internal Revenue Code. This resulted in a deficiency of $8,049.19 in 1943 and $8,492.13 in 1944. P contested this determination. The Tax Court, finding the facts in detail, sustained the Commissioner.

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