[564]*564HUTCHESON, Circuit Judge.
The appeal in these consolidated cases from decisions of the Tax Court entered on July 30, 1958, involves deficiencies in income taxes aggregating about $78,000 and penalties aggregating about $12,000 for the years 1949-1953, both inclusive.
The principal question presented for determination is whether there is includable in W. H. Neil’s income all the income from the partnership interest standing in his name, or whether such income is taxable one-third to him and one-third to each of his two sisters. Subordinate questions, whose determination depends upon the answer to the first question are: whether petitioners are liable for penalties and the amount of such penalties for failing to file declarations of income tax; and whether the assessment against Neil of the deficiencies for 1949 are barred by limitation.
The Tax Court’s lengthy and argumentative statement of the case, labelled, “Findings of Fact”, is not published, and to endeavor to separate its findings of fact from its conclusions of law would be a difficult and unrewarding, if not impossible task. It will be necessary, therefore, for us to state from the record and set out in the margin the undisputed facts1 as taxpayer’s allegations, the doc[566]*566umentary evidence, and the brief but undisputed testimony of his three witnesses establish them to be.
On this record, which contains’not a single fact in contradiction of the testimony of petitioner and his witnesses or of the instrument signed by Neil and his sisters in 1949, petitioner contended below and contends here that in the tax years in question the one-half undivided interest in the Leonard partnership, which stood in W. H. Neil’s name, was beneficially owned ,in equal shares by him and his two sisters, and the income therefrom was taxable to' each of the three equally.
The Tax Court recognizing that the evidence was all one way and that there was no question of veracity in the case but only, of the sufficiency, the legal effect, of the facts testified to, foreshadowed and keynoted the conclusion at which it did arrive by stating:
“We do not doubt that there was some intent and understanding that the petitioner’s two sisters were to derive some benefit from this enterprise provided it turned out to be successful, but this is not to say that they became partners.” (Emphasis supplied.)
Turning, then, to a discussion of the; instrument under which all of the income in.question here was received and returned for taxes,2 the court, in the face of the language of the instrument and of conclusive testimony to the contrary as to its purpose and effect, stated that it did not think that the execution of that instrument was effective to make the sisters’ partners in the Leonard partnership or members of a sub-partnership with [567]*567their brother. Continuing the same wishful thinking in the same vein, in express contradiction of the fact that the instrument was drawn as a result of Neil’s discovery of the way the tax returns had been mishandled and for the purpose of assuring that this would not again occur, the Tax Court came up with this complete misinterpretation:
“As we read this instrument, it does not purport to make the sisters members of any partnership. It merely provides that ‘all net sums’ received by the petitioner shall be divided equally between the petitioner and his sisters. We incline to the belief that the language used was intended to mean that after Jan. 1, 1949, the sisters were to share in the petitioner’s distributive share of the income of the Leonard Partnership. But even if it be construed as broad enough to cover any distribution after Jan. 1, 1949, the use of the term ‘net’ must be given effect, and we think it means that the sum in which the sisters would share is the net sum, after deduction of any capital invested by the petitioner and after payment of any liability he had incurred as a partner. Accordingly, we do not construe this contract as vesting in the sisters any interest in the capital invested in the partnership. Thus, even under this agreement, the sisters may not be considered as partners since they did not have any capital invested in the venture.”
Of the petitioners’ argument, that the instrument of January 1, 1949, was the reduction to writing of a previous existing express oral trust, that such trust when declared in writing was one for the benefit of the three signers and that under Sec. 167(a) (1) of the Code, 26 U.S. C.A. § 167(a) (1), a ratable share of the trust income was annually taxable to each of the three signers, the Tax Court, completely ignoring that for the tax years the trust was acknowledged in writing, said:
“The principal weakness of this argument is that there is no basis in the evidence for the view that there was an oral trust for the benefit of the petitioner’s sisters when the truck leasing operation was started.”
Stating that until 1949 the evidence indicated that petitioner treated the investment as his own, the court went on to say that neither in the original arrangement nor by the instrument of January 1, 1949, were the terms and circumstances sufficient to place Neil’s Leonard partnership interest in trust for the benefit of himself and his sisters, and, following the same assumptive reasoning, the court thus arrived at this sweeping conclusion of law:
“Upon careful consideration of all the evidence, we find no basis, under either the partnership or trust provisions of the Code, for treating as income of the petitioner’s sisters any part of the income derived by him from his investment in the truck leasing business. It is our opinion that insofar as the agreement of Jan. 1, 1949 deals with the income from the Leonard partnership, it was no more than an anticipatory assignment by the petitioner of his income from that venture.”
Here taxpayers, urging upon us that the Tax Court, with its misconception of the undisputed facts and upon assumptions which were expressly rejected and condemned in Commissioner of Internal Revenue v. Culbertson, 337 U.S. 733, at pages 737-746, 69 S.Ct. 1210, at pages 1211-1216, 93 L.Ed. 1659, and with its gaze fore-shortened by its intense preoccupation with its erroneous views on the partnership question and its predetermined view that the case was one merely of anticipatory assignment of income, was unable to see and decide the case as it really is, attack the conclusions of the Tax Court as wholly erroneous and as resulting from such complete misapprehension of the nature and effect of the evidence, that they do not reflect or rep[568]*568resent the truth and right of the case. Sanders v. Leech, 5 Cir., 158 F.2d 486, 487; United States v. United States Gypsum Co., 333 U.S. 364, at page 395, 68 S.Ct. 525, at page 541, 92 L.Ed. 746. We agree with the taxpayers that this is so.
Notwithstanding the fact that the opinion in the Culbertson case, supra, carefully pointed out the errors into which the Tax Court had fallen, that court, as appears in its action in the second appearance of the Culbertson case, Culbertson, v. C. I. R., 5 Cir., 194 F.2d 581
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[564]*564HUTCHESON, Circuit Judge.
The appeal in these consolidated cases from decisions of the Tax Court entered on July 30, 1958, involves deficiencies in income taxes aggregating about $78,000 and penalties aggregating about $12,000 for the years 1949-1953, both inclusive.
The principal question presented for determination is whether there is includable in W. H. Neil’s income all the income from the partnership interest standing in his name, or whether such income is taxable one-third to him and one-third to each of his two sisters. Subordinate questions, whose determination depends upon the answer to the first question are: whether petitioners are liable for penalties and the amount of such penalties for failing to file declarations of income tax; and whether the assessment against Neil of the deficiencies for 1949 are barred by limitation.
The Tax Court’s lengthy and argumentative statement of the case, labelled, “Findings of Fact”, is not published, and to endeavor to separate its findings of fact from its conclusions of law would be a difficult and unrewarding, if not impossible task. It will be necessary, therefore, for us to state from the record and set out in the margin the undisputed facts1 as taxpayer’s allegations, the doc[566]*566umentary evidence, and the brief but undisputed testimony of his three witnesses establish them to be.
On this record, which contains’not a single fact in contradiction of the testimony of petitioner and his witnesses or of the instrument signed by Neil and his sisters in 1949, petitioner contended below and contends here that in the tax years in question the one-half undivided interest in the Leonard partnership, which stood in W. H. Neil’s name, was beneficially owned ,in equal shares by him and his two sisters, and the income therefrom was taxable to' each of the three equally.
The Tax Court recognizing that the evidence was all one way and that there was no question of veracity in the case but only, of the sufficiency, the legal effect, of the facts testified to, foreshadowed and keynoted the conclusion at which it did arrive by stating:
“We do not doubt that there was some intent and understanding that the petitioner’s two sisters were to derive some benefit from this enterprise provided it turned out to be successful, but this is not to say that they became partners.” (Emphasis supplied.)
Turning, then, to a discussion of the; instrument under which all of the income in.question here was received and returned for taxes,2 the court, in the face of the language of the instrument and of conclusive testimony to the contrary as to its purpose and effect, stated that it did not think that the execution of that instrument was effective to make the sisters’ partners in the Leonard partnership or members of a sub-partnership with [567]*567their brother. Continuing the same wishful thinking in the same vein, in express contradiction of the fact that the instrument was drawn as a result of Neil’s discovery of the way the tax returns had been mishandled and for the purpose of assuring that this would not again occur, the Tax Court came up with this complete misinterpretation:
“As we read this instrument, it does not purport to make the sisters members of any partnership. It merely provides that ‘all net sums’ received by the petitioner shall be divided equally between the petitioner and his sisters. We incline to the belief that the language used was intended to mean that after Jan. 1, 1949, the sisters were to share in the petitioner’s distributive share of the income of the Leonard Partnership. But even if it be construed as broad enough to cover any distribution after Jan. 1, 1949, the use of the term ‘net’ must be given effect, and we think it means that the sum in which the sisters would share is the net sum, after deduction of any capital invested by the petitioner and after payment of any liability he had incurred as a partner. Accordingly, we do not construe this contract as vesting in the sisters any interest in the capital invested in the partnership. Thus, even under this agreement, the sisters may not be considered as partners since they did not have any capital invested in the venture.”
Of the petitioners’ argument, that the instrument of January 1, 1949, was the reduction to writing of a previous existing express oral trust, that such trust when declared in writing was one for the benefit of the three signers and that under Sec. 167(a) (1) of the Code, 26 U.S. C.A. § 167(a) (1), a ratable share of the trust income was annually taxable to each of the three signers, the Tax Court, completely ignoring that for the tax years the trust was acknowledged in writing, said:
“The principal weakness of this argument is that there is no basis in the evidence for the view that there was an oral trust for the benefit of the petitioner’s sisters when the truck leasing operation was started.”
Stating that until 1949 the evidence indicated that petitioner treated the investment as his own, the court went on to say that neither in the original arrangement nor by the instrument of January 1, 1949, were the terms and circumstances sufficient to place Neil’s Leonard partnership interest in trust for the benefit of himself and his sisters, and, following the same assumptive reasoning, the court thus arrived at this sweeping conclusion of law:
“Upon careful consideration of all the evidence, we find no basis, under either the partnership or trust provisions of the Code, for treating as income of the petitioner’s sisters any part of the income derived by him from his investment in the truck leasing business. It is our opinion that insofar as the agreement of Jan. 1, 1949 deals with the income from the Leonard partnership, it was no more than an anticipatory assignment by the petitioner of his income from that venture.”
Here taxpayers, urging upon us that the Tax Court, with its misconception of the undisputed facts and upon assumptions which were expressly rejected and condemned in Commissioner of Internal Revenue v. Culbertson, 337 U.S. 733, at pages 737-746, 69 S.Ct. 1210, at pages 1211-1216, 93 L.Ed. 1659, and with its gaze fore-shortened by its intense preoccupation with its erroneous views on the partnership question and its predetermined view that the case was one merely of anticipatory assignment of income, was unable to see and decide the case as it really is, attack the conclusions of the Tax Court as wholly erroneous and as resulting from such complete misapprehension of the nature and effect of the evidence, that they do not reflect or rep[568]*568resent the truth and right of the case. Sanders v. Leech, 5 Cir., 158 F.2d 486, 487; United States v. United States Gypsum Co., 333 U.S. 364, at page 395, 68 S.Ct. 525, at page 541, 92 L.Ed. 746. We agree with the taxpayers that this is so.
Notwithstanding the fact that the opinion in the Culbertson case, supra, carefully pointed out the errors into which the Tax Court had fallen, that court, as appears in its action in the second appearance of the Culbertson case, Culbertson, v. C. I. R., 5 Cir., 194 F.2d 581, and in the wrecks of its other decisions on the shores of this and other appellate courts, has been reluctant to recognize and turn away from them. Some of the explanation is to be found in the unwillingness of the Tax Court to recognize and apply the tax law of partnership as it is established in the Culbertson decision and the multitude of cases, collected in Shepherd’s Notes to that ease, citing and following it, and by Sec. 3797(a) (2) I.R.C.1939, 26 U.S.C.A. § 3797(a) (2) and § 340(a) of the Internal Revenue Act of 1951, which declares:
“A person shall be recognized as a partner for income tax purposes if he owns a capital interest in a partnership in which capital is a material income-producing factor, whether or not such interest was derived by gift or purchase from any other person.”
There is no principle in tax law which requires or permits the trier of facts to set up a special concept of partnership for tax purposes or to treat the facts in a tax case differently from the way they should be treated in any other kind of litigation. Indeed, the decisions are to the contrary.3
Another explanation is to be found in the use by the Tax Court of the brilliant figure of speech in Lucas v. Earl, 281 U.S. 111, 50 S.Ct. 241, 74 L.Ed. 731, not as a guide to a true determination of the question posed but as a shibboleth in all transactions between members of a family, whether through partnerships or by trusts, an approach which the Supreme Court in the Culbertson case, after having held that it is not essential that a member of a family partnership contribute either vital services or original capital, condemned in these words:
“The fact that transfers to members of the family group may be mere camouflage does not, however, mean that they invariably are.” (Emphasis supplied.) [337 U.S. 733, 69 S.Ct. 1216.]
Since the Culbertson case from this court was affirmed in principle in the Supreme Court, this and other courts have taken pains to consistently declare and apply these now settled principles of tax law. These are that in all cases, whether the claim to income of a member of a family is based upon a claim as a partner or as beneficiary of a trust, the controlling question for decision is not [569]*569whether the claim is made by a member of a family but under general law, whose was the tree that produced the fruit, whose the services or property which produced the income. Cf. Blair v. Commissioner, 300 U.S. 5, 57 S.Ct. 330, 81 L.Ed. 465; Dyer v. Commissioner, 2 Cir., 211 F.2d 500.
We have recently carefully pointed this out in West v. Commissioner, 5 Cir., 214 F.2d 300, 302,4 where the Tax Court, by labelling the arrangement under which the income was owned by the beneficiaries of a trust a “spurious family partnership”, sought erroneously, as here, to separate the income from its earners, the fruit from the tree.
It is certainly true that if in the tax years in question the sisters in this case had no title or interest with Neil in the venture, they would have no title to, or interest in, the fruits. It is as certainly true, under the Tax Court’s own conclusion, that it was intended from the beginning that the sisters were to derive some benefit from the enterprise, “if if became profitable”. Under the undisputed evidence that, as to the tax years in question, giving due weight to all the facts and circumstances, including particularly the 1949 written declaration of trust entered into between the brother and his sisters for the express purpose of correcting the errors of the earlier returns which had incorrectly credited all the income to him, it must be held as matter of law that they had such an interest and that the Tax Court’s holding to the contrary was wholly unjustified. In case after ease this court and others have insisted on standing to and applying the principle first enunciated in Lucas v. Earl, supra, and clarified in the Culbertson and Blair cases, supra, and if this court remains consistent with the law as its former decisions have declared it, it must so declare here and reverse the judgment of the Tax Court.
The judgment is reversed and the cause is remanded to the Tax Court with directions to find the correct amount of the additions to the tax, if any, under Section 294 of the Internal Revenue Code of 1939, 26 U.S.C.A. § 294.