The opinion
Atkins, J., dissenting: I find myself unable to agree with the majority in this case. The Supreme Court has repeatedly taken the position that the incidence of taxation depends upon the substance of a transaction. Gregory v. Helvering, 293 U. S. 465 , Commissioner v. Court Holding Co., 324 U. S. 331 , and Griffiths v. Helvering, 308 U. S. 355 . In the latter case it was stated:
We cannot too often reiterate that “taxation is not so much concerned with the refinements of title as it is with actual command over the property taxed — the actual benefit for which the tax is paid.” Corliss v. Bowers, 281 U. S. 376, 378 , 50 S. Ct. 336 , 74 L. Ed. 916 . And it makes no difference that such “command” may be exercised through specific retention of legal title or the creation of a new equitable but controlled interest, or the maintenance of effective benefit through the interposition of a subservient agency. Cf. Gregory v. Helvering, 293 U. S. 465 * * *
Upon the facts in this case it seems clear that in reality the petitioner conducted the whaling operations and the sale of the oil, and that Smidas was a mere agency or instrumentality used by the petitioner for chartering the Anglo Norse, which it could not charter directly. Petitioner assumed all the obligations of Smidas under the charter party, procured the killer boats, outfitted each vessel, hired all necessary personnel, procured the insurance, conducted all the whaling operations, paid all expenses, delivered at least a part of the oil, and directly received the proceeds from the sale of the oil.. Whereas in form the contract provided that the petitioner would manage, finance, and operate the expedition for Smidas and receive payment of the entire proceeds from the sale of the oil, except for $25,000 which would be retained by Smidas, in reality it was the petitioner which received all the proceeds from the sale of oil and paid Smidas $25,000 for what appears to have been merely entering into the charter agreement.
All the oil was sold in the United States. Since the delivery and sale of products are among the most important functions of a business for profit, I think it is clear that the petitioner was engaged in trade or business within the United States within the meaning of section 231 (b) of the Internal Revenue Code of 1939, and therefore taxable upon income from sources within the United States. Under this view, it would be necessary to consider the applicability of section 119 (e) (2) of the Code and section 29.119-12 of Regulations 111 in determining how much income the petitioner derived from sources within the United States, but since that is not considered in the majority opinion, it need not be considered here.
TURNER, OppeR, and Raum, JJ., agree with this dissent.