OPINION.
Kern, Judge:
Three questions are presented by the instant case for our decision. All are questions of first impression. Two of them involve an interpretation of section 130, I. R. C. 1939. This we set out in the margin hereof, together with the pertinent parts of respondent’s regulations dealing therewith.2
Issue 1,
The first issue arises by reason of respondent’s determination that petitioner’s “agricultural activities [i. e., the activities of petitioner carried on by the proprietorships described in our findings] constitute one trade or business, and the losses * * * claimed to have been sustained in that business * * * are allowable only to the extent of $50,000, as provided by Section 130 of the Internal Revenue Code of 1939, as amended.”
Both parties are in agreement that the crucial question under this issue is whether petitioner’s agricultural activities carried on by him under the name of Brownsville Plantations and those carried on under the name of Three Bays Farm constituted one business or two several businesses. If they constitute two several businesses then, under respondent’s own regulations, the deductions attributable to them “shall not be aggregated in determining whether the deductions * * * exceed the gross income derived from such trades or businesses by more than $50,000 in any taxable year.” Section 130 is only applicable to the instant case if the deductions of Brownsville Plantations and Three Bays Farm are aggregated.
Counsel for both petitioner and respondent have filed herein voluminous, thorough, and extremely well written briefs, and it would be impractical and perhaps unfair to the parties to rephrase in our own language and compress into a necessarily short summary a complete résumé of all the arguments advanced on this issue. Accordingly we quote directly from the briefs, summaries prepared by the parties themselves of their respective positions on this issue. Respondent states his position as follows:
Farming activities which are the same or substantially similar in nature constitute a single trade or business even where conducted at more than one location. The term “business”, as used in the Internal Revenue Code of 1939 and earlier Revenue Acts, means “line of business” and is somewhat interchangeable with the word “trade”. Petitioner’s farming activities, although variously located, were the same or substantially similar in nature. They consisted of diversified farming operations under similar climatic and soil conditions and involved many common farm products and other products which, though not produced at all locations, were interrelated with the common products because of tbe diversified nature of tbe operation. Because of tbis, it is immaterial wbetber tbe operations were separately conducted. In any event, petitioner’s farm activities were not separately conducted.
In a rebuttal memorandum lie restates Ms position as follows:
Our principal position is, of course, that tbe “nature test” is controlling, that substance rather than form should control. Our alternative position (in case tbe Court rejects tbe nature test or decides that petitioner’s various farms differ in their nature) is that two or more business ventures, though differing in nature, will still constitute a single trade or business, unless they are separately conducted for a tona fide business purpose. * * *
Petitioner’s contention is outlined by him as follows :
Each of tbe four enterprises involved was a separate trade or business, and they may not be treated as a single trade or business for tbe purposes of section 130.
1. Tbe statute and regulations show that tbe limitations on deductions prescribed by section 130 are to be applied separately to each trade or business conducted by a taxpayer.
2. Tbe enterprises in question were in fact separately and independently conducted and were not materially interrelated.
3. Under tbe authorities each of these four enterprises was a separate trade or business.
Upon the proposition that Three Bays Farm and Brownsville Plantations were separately conducted and not materially interrelated, petitioner further summarizes his position as follows:
by reason of their very great geographical separation, their completely independent management and personnel, their separate origins and endings, tbe differences in their products, labor sources, markets, sources of supplies, and financial and economic problems, and their separate, unrelated and independent books of account, bank accounts, purchasing, selling, borrowing and dealings with outsiders, Brownsville Plantations and Three Bays Farm were separate, independent and unrelated enterprises having no connection whatever with each other except that both were owned by the petitioner. * * *
The legislative history of section 180 (sometimes referred to as the “hobby amendment” and sometimes as the “Marshall Field amendment”) is not helpful in a consideration of the problem here presented. The ingenious attempts of the parties to draw pertinent analogies from other sections of the Revenue Code and from decided cases have only confirmed us in the view that this question is one of first impression.
Since it is a question of first impression, it is important that we confine our decision to the facts before us and not attempt in this Opinion to consider all of the hypothetical questions that might come to mind in a consideration of the problem of what constitutes a separate business.
Respondent recognizes, as Ms regulations require, that an individual may have several separate businesses. This necessarily implies that the common ownership of these businesses and the exercise with regard thereto of the rights of ownership do not ipso facto convert them into one business. Respondent also recognizes, although reluctantly, that not all agricultural activities necessarily constitute a single business. We would assume that under ordinary circumstances of separate management and operation a man who raises potatoes in Maine, cotton in Albania, cattle in Texas, and timber in Oregon would be carrying on four different businesses, even though they would all be classified generically as agricultural activities. Respondent would contend, however, that a man raising potatoes on a farm in Maine and also raising potatoes on a farm in Idaho would be carrying on only one business regardless of the fact that the operations on each farm were conducted separately, and also that a man raising cotton on a farm in Alabama and cattle on a ranch in Texas was carrying on one business if there was a common management of the two farms.
Petitioner recognizes that the mere fact that two farms or agricultural activities are physically separated does not necessarily result in their operations constituting two businesses. He would concede that if one farm owned by a taxpayer were used for the running and pasture of hogs and another farm also owned by him were used for the production of feed for these hogs, the operation of both farms might be considered as one business even though they were physically separated and each farm had its own resident manager. In the supposed case there would be sufficient economic interrelation between the operation of the two farms to justify the conclusion that as a practical matter there was one business unit. Petitioner does contend, however, that under the facts of the instant case the geographical separation of the two agricultural activities is an important factor in considering whether as a practical matter they constituted one business unit.
In arguing that the petitioner’s agricultural activities at Three Bays Farm and at Brownsville Plantations were substantially similar in nature, respondent contends that “[t]he climatic and soil conditions under which each was conducted were generally similar,” both being “subtropical areas, with dry and rainy seasons,” and that “[t]he general picture presented is that of two diversified farming operations” with inconsequential differences arising because in each of the two farming operations petitioner “put some emphasis on products which would sell in local markets.”
Respondent bases his contention that the soil and climate of Three Bays Farm and Brownsville Plantations were substantially similar largely upon the fact that the nature of the crops raised on Three Bays Farm and Brownsville Plantations was substantially similar, pointing out that on both there were citrus trees and that tomatoes, potatoes, and corn were grown on each. He recognizes that on Three Bays Farm petitioner raised bananas, avocados, and pineapples which were not grown on Brownsville Plantations, and on the latter he grew beans, broccoli, peas, and cabbage which were not grown on the former; and he further recognizes that cotton was raised only on Brownsville Plantations and livestock only on Three Bays Farm. However, respondent contends that the cotton crop at Brownsville, although representing 58 per cent of the sales of that agricultural activity, and the raising of livestock at Three Bays Farm, although supported by over one-third of the acreage used in that operation, were not so important as to prevent both enterprises from being classified as diversified farming operations generally similar in nature. We are not shown by the record the season of the year when the various row crops were planted and harvested by each of the two proprietorships.
While the climate (with regard to average temperature) may be generally similar at the locations of both proprietorships, we are unable to conclude that the soil and climate (including the amount and incidence of precipitation) of both were so substantially similar as to constitute an important factor persuasive of a finding that the two agricultural activities themselves were substantially similar.
Contrary to the views of the respondent, we are more impressed by the differences between the two agricultural enterprises here in question than by their points of similarity. It is true that both were on approximately the same degree of latitude, that upon both some citrus trees were planted, and that upon both tomatoes, potatoes, and com were grown. However, there were more differences than similarities with regard to the so-called row crops raised on each, and, furthermore, there was an important difference with regard to the primary activity in each enterprise. At the Brownsville Plantations the primary activity was the raising of cotton. This was not raised as a part of a program for rotation of crops characteristic of a diversified farming operation, but constituted the principal crop throughout the taxable period. At Three Bays Farm we are persuaded by the record that the initial emphasis was placed upon a program calling for the raising of livestock and the development there of adequate pasturage and production of fodder. It appears from the employment there of agronomists who were specialists in tropical agriculture (a circumstance not existing in connection with the Brownsville Plantations) , and from a decrease in the number of livestock and in acres devoted to pasture and the raising of fodder that the emphasis shifted from livestock to the experimental development of tropical fruits and vegetables. In our opinion the two proprietorships did not constitute substantially similar diversified farming activities.
With regard to the acquisition of materials and supplies, the marketing of products, and matters connected with transportation, labor, and financing, the operations were strikingly different. On the entire record we conclude that the agricultural activities carried on by petitioner at Three Bays Farm, and those carried on by him at Brownsville Plantations were not substantially similar.
Respondent further argues that even if we conclude that the two agricultural enterprises differed in nature they must still be considered as a single trade or business since they were not separately conducted for a bona fide business purpose. Respondent points to the common supervision of petitioner over both, the appearance of the assets of both on the books of Arvida, and the fact that books kept by petitioner for Three Bays Farm do not completely reflect the operations of that enterprise but must be read in connection with the books of Arvida.
We have no doubt in our conclusion that the two agricultural enterprises were conducted by petitioner as separate businesses and for very good business reasons. Of course, petitioner, as the owner of both, exercised over both the supervision and control which a prudent owner would be expected to exercise, but respondent himself recognizes that common ownership does not preclude the existence of several separate businesses. While technically incomplete, separate books were kept for both Three Bays Farm and Brownsville Plantations, which adequately reflected their operational results. Each had separate operational management and, in the practical operation of each, there was no connection with the other. This separateness of operations was called for by the circumstances. The two enterprises were located far distant from each other, they were in different countries with different conditions relating to finances, currency controls, labor, and marketing, and the agricultural problems themselves differed as between the two enterprises. Under the existing circumstances it is difficult to see how they could have been conducted as a unit. Certainly the fact that they were not so conducted cannot be ascribed to any lack of bona fides on the part of petitioner.
On the assumption, arguendo, that the tests laid down by respondent are controlling, we nevertheless conclude that the agricultural activities carried on by petitioner under the names of Three Bays Farm and of Brownsville Plantations constituted two separate businesses, and that their losses cannot be aggregated under section 130 of the Internal Revenue Code of 1939.
If we apply to this problem the test suggested by petitioner, that is, whether there is a practical economic interrelation between the two agricultural enterprises, it is obvious that we should arrive at the same result. While this test appears to have much to commend it, it is unnecessary for us to decide whether it or the tests suggested by respondent should control onr decision herein, since even assuming the pertinence of those suggested by respondent the facts of the instant case require a conclusion on this issue in favor of petitioner.
Issue 2.
This issue involves the refund claims submitted by petitioner for the years 1944 and 1945. In October 1949 respondent accepted petitioner’s “OFFER OF WAIVER OF RESTRICTIONS ON ASSESSMENT AND COLLECTION of Deficiency in Tax” (Form 870-TS (Modified)), in which petitioner agreed to deficiencies of $18,805.80 and $2,164.27 in 1944 and 1945, respectively. The agreed-upon deficiencies were thereafter paid. In December 1950 and January 1951 petitioner timely filed claims for refund for the years 1944, 1945, 1948, and 1949 on the ground that the 90 per cent limitation contained in section 12 (g) (later section 12 (c)),3 had not been applied when the respective deficiencies for 1944 through 1949 had been calculated. In his deficiency notice respondent has taken this limitation into account in the recalculation of the deficiencies determined for 1948 and 1949, but has failed to do so in the recalculation of the deficiencies determined for 1944 and 1945. In his petition, petitioner has assigned as error this failure to apply the section 12 (g) limitation, and has asked this Court to determine overpayments of taxes for those years on account thereof.
The question for our decision under this issue is whether this Court has jurisdiction over the claims of overpayments made by petitioner for those years. Both parties agree that the period of limitation on assessment and collection of deficiencies in income tax, prescribed by section 275, has run for the years 1944 and 1945. Petitioner points out that subsections (b) and (c) of section 130 permit the determination of a deficiency which is otherwise barred by section 275. He argues that section 130 makes no provision for the jurisdiction of this Court over proceedings relating to determinations of deficiencies made thereunder, and necessarily assumes that such determinations shall be covered with regard to procedure and jurisdiction by sections 272 and 322, even though the statute of limitations contained in section 275 has run. Thus, petitioner argues that the determination of a deficiency involved in' a section 130 proceeding should be considered, for jurisdictional and procedural purposes, the same as any other timely determination of a deficiency, and, consequently, section 322, including subsection (d) which gives this Court jurisdiction to determine the amount of any overpayment, is applicable herein.
Respondent, on the other hand, contends that section 130 (b) and (c) gives this Court jurisdiction only over the proposed deficiencies arising out of section 130 (a). He argues that if the assessments of any deficiencies for the years in question are barred by the statute of limitations, the extension contained in section 130 (b) and (c) is limited to the section 130 (a) deficiency and the same limitation applies to claims of overpayment. In the alternative, respondent contends that the doctrine of equitable estoppel precludes our holding for petitioner on this issue. This alternative contention is discussed under Issue 3.
The parties have not called our attention to and we have been unable to discover any decided case dealing with this question. Nor do the committee reports shed any light on the subject. It is our opinion, however, that petitioner is correct.
Section 130 (b) and (c) provides that any deficiency determined to be due under section 130 (a) shall be assessed within 1 year after the expiration of the period for assessment of the fifth taxable year. The effect of section 130 (b) and (c) is to extend the statute of limitations on assessment of a deficiency computed under subsection (a). It does not provide for any special procedure. It does not purport of itself to grant jurisdiction to this Court or limit this Court’s jurisdiction. Neither does it authorize respondent to send a notice of a deficiency determined thereunder. To determine jurisdictional and procedural questions relating to determinations of deficiencies, we must turn to supplements L and O, subchapter C, of chapter 1,1. B. C. 1939. The procedures to be followed by the respondent in determining a deficiency and the procedures to be followed by petitioner in invoking the jurisdiction of this Court are carefully set forth in sections 272 and 322. The notice of deficiency, which is the basis of this action, must be considered as having been “mailed to the taxpayer * * * under section 272 (a).” No other section of the Code could authorize such mailing. The only jurisdictional requirement necessary to fall within these sections is filing a timely petition after the receipt of a timely notice of the determination of deficiency. If Congress thought section 130 warranted separate procedures for assessment and review, it could have made provision for such procedures as was done in section 732 with respect to the excess profits tax. This Court’s jurisdiction over refund claims and overpayments where a petition has been filed by the taxpayer is authorized by section 322. There is no exception stated for cases where the Court’s jurisdiction is invoked in connection with a determination of deficiency made pursuant to section 130. The only pertinent requirements contained in section 322 are a timely petition to this Court based on a timely notice of deficiency under section 272, and a claim for refund timely filed by petitioner within the period prescribed by section 322 (d). In the instant proceeding these requirements have been met. The notice of deficiency was made timely by the extension of the statute of limitations, contained in section 275, by section 130 (c). The petition was timely filed pursuant to section 272 (a) (1). The refund claim was filed within the period set forth in section 322 (d). Under these circumstances we believe petitioner is not barred from pursuing his refund claim. In view of the above statutory provisions, we hold that this Court has jurisdiction to determine the questions of overpayment herein raised.
Issue 3.
This issue deals with respondent’s alternative contention under Issue 2, i. e., that if this Court has jurisdiction to determine the merits of the refund claims for the years 1944 and 1945 then petitioner is estopped from recovering under these claims through the operation of the doctrine of equitable estoppel. Respondent points out that petitioner stated that he would not file any refund claims when he made an offer of waiver on Form 870-TS.4 Respondent argues that his acceptance of this offer of waiver was based at least partly on this statement and that he suffered a detriment by allowing the statute of limitations to run without assessing any further deficiency in reliance on the agreement contained in the Form 870-TS.
The parties are agreed that the execution of a Form 870-TS is not equivalent to the execution of a closing agreement and is not of itself binding upon the parties. See Botany Worsted Mills v. United States, 278 U. S. 282. Obviously respondent could not contend to the contrary since he has himself disregarded his “acceptance” of the “OffeR OF WAIVER OF RESTRICTIONS ON ASSESSMENT AND COLLECTION OF DEFICIENCY in Tax” by determining the deficiencies for 1944 and 1945 here involved. Only by the application of the doctrine of estoppel may the petitioner be precluded from successfully contending here that overpayments be determined for these 2 years pursuant to his refund claims that the limitation provisions of section 12 (g) were improperly applied in arriving at the amounts of the agreed deficiencies for those years. The merits of this question were decided in Merrill v. United States, 105 F. Supp. 379, and respondent in effect concedes it as indicated by his computation of petitioner’s income tax liability for the years 1948 and 1949 in accordance with the method requested by petitioner in his refund claims for 1944 and 1945.
The allegations of respondent’s answer, which present this issue of estoppel, are simply to the effect that respondent’s agent directed a letter to petitioner stating that assessments of additional income taxes for 1944 and 1945 seemed warranted; that petitioner “indicated his disagreement with several of the proposed adjustments contained therein”; that at a conference between the parties it was tentatively agreed that if respondent “would eliminate certain adjustments” and petitioner would “abandon protestation of certain other adjustments” the case might be disposed of “on the basis of an agreed liability”; that thereafter an agreement was reached and Form 870-TS was executed; “[t]hat on June 30, 1950, the period expired within which the Commissioner could assess income taxes against the petitioner with respect to the taxable years 1944 and 1945”; and “[t]hat the petitioner should be held to be estopped to assert and prosecute the aforesaid claims for overpayment.”
Among the elements necessary to the establishment of estoppel is a misrepresentation of fact on the part of the person sought to be estopped, a justified reliance upon that misrepresentation by the person to whom it is made, and a detriment sustained by the latter. We doubt that petitioner’s undertaking in a document similar to Form 870-TS not to file or prosecute claims for refund, which was not legally binding on him and was known by respondent not to be an enforceable obligation, could be considered as a misrepresentation of fact upon which respondent could justifiably rely or did rely. We pass these elements, however, and address ourselves to the element of detriment on the part of respondent.
The detriment shown in this proceeding is merely the running of the statute of limitations with regard to possible additional deficiencies relating to the years 1944 and 1945. We are not informed as to what those deficiencies, if any, might have been. It is true that some concessions were made by respondent in arriving at the agreed deficiencies set forth in the Form 870-TS, but we may not assume that they were made improvidently or without full legal and factual justification. No indication is given that any recoupments with regard to the claims for overpayment are urged by respondent, although our decision on the second issue that we have jurisdiction over petitioner’s claims for overpayment for 1944 and 1945 would necessarily result in our having jurisdiction over claims of recoupment even though relating to matters barred, so far as a determination of deficiency is concerned, by the statute of limitations.
Respondent relies on Guggenheim v. United States, 77 F. Supp. 186, certiorari denied 335 U. S. 908, and also points to the following cases indicating a similar result: Baldwin v. Higgins, not officially reported (S. D. N. Y., 1937; 19 A. F. T. R. 1341, 37-2 U. S. T. C. par. 9434), affirmed on other grounds 100 F. 2d 405; Schneider v. Kelm, 137 F. Supp. 871, affirmed on other grounds 237 F. 2d 721; Girard v. Gill, 142 F. Supp. 770, affirmed per curiam 243 F. 2d 166; and Daugette v. Patterson, — F. Supp. — (N. D. Ala., 1956), affd. 250 F. 2d 753 (C. A. 5, 1957).
These cases appear to be contrary, at least in reasoning and language, to the following cases cited to us by petitioner: Joyce v. Gentsch, 141 F. 2d 891; Steiden Stores, Inc. v. Glenn, 94 F. Supp. 712; Cuba Railroad Company v. United States, 124 F. Supp. 182; and John v. United States, 138 F. Supp. 89.
We are not aware of any opinions of this Court directly concerned with the question here presented.
It may be pointed out that the cases relied upon by respondent differ factually from the instant case in that here the proceeding was precipitated by respondent’s determination of a deficiency in disregard of his acceptance of Form 870-TS; and petitioner’s claims of overpayment, although based on claims for refund filed before such determination, were asserted as part of a petition predicated on the notice of such determination. While this factual difference may be pertinent in a consideration of the general equities of the problem, we do not rest our conclusion upon it.
We also point out that actions brought in the Federal District Courts to recover taxes erroneously paid are equitable in function and governed by equitable principles. See Stone v. White, 301 U. S. 532. The jurisdiction of this tribunal is strictly statutory; it has no equitable jurisdiction. C. D. Little, 20 B. T. A. 1042.
We also point out that we do not consider Guggenheim v. United States, supra, distinguishable from Joyce v. Gentsch, supra, on account of the fact that the latter case was concerned with a waiver containing a clause expressly reserving the right to respondent to assess a further deficiency. Even without that clause, as in the instant case, the respondent would have such a right.
Upon the record here presented, we conclude that there is not a sufficient showing of detriment on the part of respondent as to justify a holding that the doctrine of equitable estoppel precludes petitioner from establishing his claims of overpayment relating to the years 1944 and 1945. It is clear that the respondent who has pleaded estoppel has the burden of demonstrating the existence of all the elements of estoppel, including detriment. Helvering v. Brooklyn City R. Co., 72 F. 2d 274. In our opinion the detriment shown must be real and substantial. See 31 C. J. S. 275. It is not enough to show that in reliance on petitioner’s statement of his unenforceable undertaking that he would not file or prosecute any claim for refund respondent permitted the period of limitations to run on possible hypothetical deficiencies characterized only in general language. He must show that as a result of his reliance upon petitioner’s “statement” the period of limitations was permitted to run on specific items of additional tax which he in good faith considers to have been possible to collect as of the time of the execution of Form 870-TS, the barring of which by the statute of limitations will result in a real loss to the Treasury. Furthermore, it must be demonstrated that the claims for additional taxes (with regard to which he is barred from determining deficiencies) are either not available as recoupments or setoffs to petitioner’s claims for overpayment or are in amounts larger than petitioner’s claims. See Joyce v. Gentsch, supra; Cuba Railroad Company v. United States, supra.
In the instant case the respondent, in spite of the execution of Form 870-TS, has determined deficiencies against petitioner for the years 1944 and 1945. The ground of the deficiencies, while not identical with, is in general subject matter similar to an adjustment considered and eliminated by him in connection with the execution of Form 870-TS, i. e., the application of section 130 to petitioner’s claimed business losses. Petitioner’s claims for refund and claims for overpayment herein relate to a matter never considered by the parties in connection with the negotiations leading to the execution of Form 870-TS, and are concededly correct. Petitioner does not here contest any adjustments made in his income tax liability for those years as a result of those negotiations. He stands by the adjustments he agreed to. Those adjustments have been made a part of the deficiency notice herein and are not put in issue by the petition, and are in no way connected with the claims for refund filed by petitioner.
Under these circumstances and in view of the lack of showing of any substantial detriment suffered by respondent, we are not inclined to stretch an equitable doctrine such as estoppel in such a way as to make a legally unenforceable document such as Form 870-TS so binding upon one party (the petitioner) as to preclude him from asserting a concededly correct claim of overpayment relating to a matter never considered in the negotiations leading to the execution of Form 870-TS in a proceeding precipitated by the issuance of a notice of deficiency by the other party (the respondent).
In view of our opinion upon the question of estoppel, it-is unnecessary for us to consider petitioner’s contention that the execution of Form 870-TS was not effective in that the matters presented by his claims for refund were the results of an “important mistake in mathematical calculations.”
Eeviewed by the Court.
Decision will he entered under Bule 50.