LEWIS, Circuit Judge.
Petitioners seek review of a decision of the Tax Court, 42 T.C. 850, holding that certain expenditures made by each of the taxpayers during a particular year must be capitalized
Fall River Gas Company is a seller and distributor of natural gas and holds an exclusive franchise to distribute gas at retail in the Fall River, Massachusetts area. Fall River Gas Appliance Company was incorporated in 1955 as a wholly owned subsidiary. The subject expenditures were made by taxpayers in the years 1957 through 1959
The determination of whether a business expenditure is a capital expense is generally difficult and there is no set formula that will govern all cases. See Welch v. Helvering, 290 U.S. 111, 54 S.Ct. 8, 78 L.Ed. 212. It has been held that a capital expenditure is one that secures an advantage to the taxpayer which has a life of more than one year, United States v. Akin, 10 Cir., 248 F.2d 742, 744,
Against this legal premise petitioners argue that the nature of the installations and their lack of permanency dictate the existence of ordinary business expense; customers could cease using gas at virtually any time, rendering the installation worthless to the petitioners and therefore not a capital asset. Although value of the installation lies in the increased amounts of gas that will be purchased, petitioners point out that they have no assured benefits because a customer may switch from gas to electricity or oil at any time. They attempt to distinguish the cases relied upon by the Tax Court and the Commissioner, holding the taxpayer need not have title to the improvement resulting from the expenditure, on the ground that in each case the taxpayer had the right to benefit from the improvement for a long period of time.
But the impact of these authorities cannot be so narrowed for in each instance the taxpayer took a considered risk in the installation of a facility upon the premises of another in anticipation of an economic benefit flowing from the existence of the facility over an indeterminable length of time. Taxpayer had no right to actual use for a period certain or at all and the rationale of the holdings is premised upon the particular advantage accorded the taxpayer. In the case at bar petitioners made many small expenditures rather than a single large one. Some installations would be, and were, poor investments; others would be, and were, very profitable. But the totality of expenditure was made in anticipation of a continuing economic benefit over a period of years and such is indicative of a capital expense. The record of gas sales and leased installations, although certainly not compelling in such regard, lends some strength to the conclusion that anticipation has become fact.
Petitioners also assert that the finding of the Tax Court that the useful life of their installations was twelve years is arbitrary and not supported by record fact. Such a finding, by nature, is seldom capable of precise support and usually amounts to but a considered estimate. Here, the Tax Court reduced the Commissioner's determination from 20 to 12 years stating that "The materials in the record do not enable us to arrive at any scientifically accurate conclusion in this respect, but doing the best we can with the evidence before us we have found as a fact that the installations in question had a useful life of 12 years in conjunction with the leased appliances." We do not consider the Tax Court's determination of 12 years to be unreasonable upon its face nor not in harmony with the record evidence and consequently we will not disturb its finding.
Petitioners make several other arguments, none of which convinces us that the decision of the Tax Court was clearly erroneous. As this court in Russell