concurring in result only: If we assume that a partnership existed between petitioner and his daughter, Edith, by virtue of the bill of sale and partnership agreement of July 1, 1941, as I do, then I do not agree with the view expressed in the majority opinion that this is a failure of proof case as to petitioner being the earner of the income and, therefore, the Commissioner must be sustained in his determination that the earnings of the business of the Carolina Gas & Oil Co. were the “personal service” earnings of D. H. McEachern and were, on that account, taxable entirely to him. That such is the holding of the majority opinion there seems to be no doubt, as will be seen from the following quotation taken from it. The majority opinion after citing M. M. Argo, 3 T. C. 1120, says:
* * * In that case the facts shown of record were substantially parallel to the facts in this case, and we were there unable to conclude, as the petitioner argued we should, that a partnership, rather than the petitioner, was the earner of the income. Such being the record, we held that the rule in Lucas v. Earl, supra, as applied in Earp v. Jones, supra, Mead v. Commissioner, supra, and Schroder v. Commissioner, supra, was controlling, and that the entire income was taxable to the petitioner. Similarly, we are unable to say in the instant case that the petitioner was not the earner of the Carolina Gas & Oil income reported by his daughter as her income, and, as a consequence, we can not say that the respondent erred in taxing it to him. See also L. D. Simmons, supra, and Brands Doll, 2 T. C. 276. In view of the conclusion reached, it becomes unnecessary to determine whether petitioner’s daughter acquired by purchase, as of July 1, 1941, a two-thirds interest in the physical assets of Carolina Gas & Oil Co. Cf. M. M. Argo, supra.
I do not agree that the earnings of the business known as Carolina Gas & Oil Co. were “personal service” earnings as that term is commonly and ordinarily understood. See Robert P. Scherer, 3 T. C. 776, 793. The business of Carolina Gas & Oil Co. was that of wholesale distributor of the products of the Shell Oil Co. and the assets with which it operated its business were purchased from Shell at a cost of $41,750 and “consisted principally of the service equipment of approximately thirty stations, storage tanks, and warehouses and office equipment.” The above facts are taken from the findings of fact which precede the majority opinion and it seems to me that they altogether negative the idea that the earnings of such a business can be correctly described as “personal service” earnings, and brought within the ambit of such cases as Lucas v. Earl, Earp v. Jones, Mead v. Commissioner, and Schroder v. Commissioner. I do not wish to be understood as subscribing to any such view. Nor do I think the case of M. M. Argo, supra, relied upon in the majority opinion, has any application to the facts of the instant case.
I do concur in the result reached in the majority opinion, but on one ground only. It is undisputed' that up until July 1, 1941, the business was conducted as a sole proprietorship by the petitioner, D. H. McEachern. Clearly, during that period all of the profits of the business were his and taxable to him. It is the allegation of petitioner that on July 1, 1941, the business was changed into a partnership between himself and his daughter, Edith. If it be assumed that such is the case, it was petitioner’s burden of proof to show what the income of the partnership was during the period July 1 to December 31, 1941. This, the petitioner has not done. The findings of fact say: “The actual profits for the period July 1 to December 31, 1941, are not shown.” Instead of a proper showing in this respect, petitioner has used a method of allocation based on time. No facts are in the record, so far as I can see, which would justify a method of allocation based on time instead of making a proper showing of actual income of the partnership, as was petitioner’s burden. Because of this failure of proof, and this only, I concur in the result reached in the majority opinion.
ARUndel, Van Fossan, Leech, and Disney, JJ., agree with the above.