Court Opinion

ID: 4477314
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:28.319891+00
Date Added: 2024-06-11T15:03:29.858133
License: Public Domain

Raum, J., concurring: This case closely parallels Grenada Indus- tries, Inc., II T. C. 231. There, as here, the Commissioner sought to disregard certain partnership entities. We held in Grenada that the partnerships were real and could not be ignored. The holding of the Court of Appeals in the present case is to the same effect. We were then faced with the problem in Grenada whether the existence of common control between the partnerships and related corporations resulted in any distortion of income that could be corrected by section 45. That is the problem that is now before us in the present case. We held in Grenada that the common control required by section 45 was present because the control represented by the various interests involved was in fact exercised by the fathers and husbands who actually operated the enterprises. We pointed out, however, that the mere existence of common control was not sufficient to justify the application of section 45, that there must be, in addition, distortion of income, and that section 45 can be applied only to the extent of correcting the distortion; we thereupon disapproved some of the corrections proposed by the Commissioner and approved others. A comparable situation is present here. The requisite common control exists here in fact as it did in Grenada; the mere existence of the common control, however, is not sufficient to justify the application of section 45; and I concur in the result reached by the Court in approving and disapproving the various corrections proposed by the Commissioner under section 45. The result is fully consistent with the prior decision of the Court of Appeals herein, which had previously affirmed our decision in the Grenada case. 202 F. 2d 873 (C. A. 5).