The opinion
Drennen, J., dissenting: In my opinion the limited partnership in which petitioner was a member more nearly resembled a corporation than a. partnership under the criteria established in Morrissey v. Commissioner, 296 U.S. 344 (1935), and other cases, whether the characteristics are scrutinized under the regulations or without them.
Since neither party argued the invalidity of the regulations 1 and the case was presented on the basis that it would be decided under the regulations, I would reach the conclusion stated above on the reasoning of Judge Simpson in his dissenting opinion, with which I agree. However, I have considerable doubts concerning the validity of the regulations, for the reasons stated by Judge Quealy in his dissenting opinion, which I would voice under other circumstances. I doubt that the rules supplied by the Treasury Department for the application and enforcement of the law are “within the permissible bounds of administrative construction.” Morrissey v. Commissioner, supra. See Kurzner v. United States, 413 F.2d 97 (5th Cir. 1969).
Sterrett, J, agrees with this dissent. It is understandable why the case was presented in this manner. The regulations help petitioners’ argument and respondent would be reluctant to argue the invalidity of the Treasury regulations. However, the validity of the regulations may properly be considered, for, as stated in Wilkes-Barre Carriage Co., 39 T.C. 839 , affd. 332 F.2d 421 (2d Cir. 1964), atp. 846:
“However, the rule is well established that a deficiency may be approved on the basis of reasons other than those relied ori by the Commissioner or even where his reasons may be incorrect.” [Citations omitted.]