Court Opinion

ID: 9651321
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:13:46.88055+00
Date Added: 2024-06-11T18:12:31.909666
License: Public Domain

HUTCHESON, Circuit Judge
(concurring).
I agree with the result reached and with what it said in the majority opinion. I particularly agree with the view of the opinion that the fact that five members of the Tax Court, including the member who heard the evidence, disagree with the conclusions of the others should deprive the findings and opinion of the majority of the weight ordinarily attached on the theory of “expertise” to administrative findings. It is true that because of the majority, the Tax Court’s judgment must follow the majority opinion, but I think it equally true that when the determination comes here for review, the weight it carries depends more upon the reasons given for arriving at it than upon the fact that it was made.
In cases of this kind, the controlling fact is not, as the majority of the Tax Court seem to think, that a sale by stockholders instead of by the company will effect a reduction in taxes. Where the facts are in dispute as to who made the sale, the tax consequences may be looked to for its evidentiary bearing. In cases like this one, where there is no question as to who made the sale, the matter of tax consequences is wholly immaterial. The determining question here, where on its face the contract of sale is one between the stockholders and the purchaser, is “Was the agreement of the stockholders as sellers really their agreement, or was it the agreement of the corporation as seller acting through the stockholders as its agents?” When, as here, the record is devoid of any fact from which it could be inferred that the corporation was the seller, to hold that it was is not a finding of fact but mere fiating. The evidence conclusively establishes that the stockholders who made the contract were dealing for themselves and not for the corporation. Indeed, the record contains no fact from which, according to the rules of right reason, it could be inferred that the corporation was making the sale through the stockholders as its agents. The Tax Court is authorized to determine the facts as the record presents them and draw reasonable inferences from the facts so determined. It is without authority to make findings contrary to those which are disclosed by the record. It cannot draw inferences the contrary of those which the record compels.