dissenting: I respectfully dissent from the holding of the majority that the petitioner is not required to include in his gross income the entire amount of the undistributed foreign personal holding income of Gulf Stream for its fiscal year ended August 31, 1961. In my opinion, section 551 (b) clearly requires the inclusion of the entire amount of such income in the petitioner’s return and there is no reason to depart from the clear and concise requirement of the statute. We so held in Mary A. Marsman, 18 T.C. 1 (1952), revd. 205 F. 2d 335 (C.A. 4, 1953), and in Ellsworth C. Alvord, 32 T.C. 1 (1959), revd. 221 F. 2d 713 (C.A. 4, 1960).
While our opinion with respect to this issue in the Marsman case was reversed by the Court of Appeals for the Fourth Circuit, up until now we have been unwilling to follow the decision of the appellate court in that case. In Alvord, 32 T.C. 1, 21-22,1 this Court said:
The Commissioner in Ms brief in tbe instant ease relies upon our decision in tbe Marsman ease but contends, assuming tbe correctness of tbe Fourth Circuit’s reversal of tbe Marsman case, that nevertheless it is not controlling here because it is distinguishable on its facts. It is tbe feeling of our Court that tbe Court of Appeals for tbe Fourth Circuit, if this case is appealed, may want to consider tbe alternative issue in tbe light of the factual situation in tbe present case as compared to that in Marsman v. Commissioner, supra, and with that in mind tbe Tax Court will not decide this ease for tbe petitioner on tbe reversal of tbe Marsman ease. We will decide it on what we conceive to be tbe meaning of tbe statute.
Section 337 (b) provides:
“(b) Amount Included in Geoss Income. — Each United States shareholder, who was a shareholder on tbe day in tbe taxable year of tbe company which was tbe last day on which a United States group (as defined in section 331(a) (2)) existed with respect to tbe company, shall include in bis gross income, as a dividend, for the taxable year in which or with which tbe taxable year of tbe company ends, tbe amount be would have received as a dividend if on such last day there bad been distributed by tbe company, and received by tbe shareholders, an amount which bears tbe same ratio to tbe undistributed Supplement P net income of tbe company for tbe taxable year as tbe portion of such taxable year up to and including such last day bears to tbe entire taxable year. [Emphasis supplied.]”
As we have heretofore said, it has been stipulated that on September 8, 1951, petitioner became tbe owner and bolder of 9,500 shares of Heitor’s stock out of 10,000 outstanding shares and owned it throughout tbe periods here in question. Therefore, we think that under tbe terms of tbe statute just quoted petitioner is taxable on 95 per centum of Hekor’s undistributed Supplement P income for tbe year 1951. We so bold. It may well be, as petitioners contend, that to so bold produces a harsh result. However, we do not think that fact warrants us in giving the statute a construction which does not seem warranted by what seems to be its plain meaning. See Phanor J. Eder, 47 B.T.A. 235, reversed on another point Eder v. Commissioner, 138 F. 2d 27. We think, if the result be harsh, that the remedy is within the province of Congress to enact a change in the law and that it is not within our province to change it by construction.
Nothing has transpired since our decision in the Al/oord case, and there are no peculiar facts in this case which would warrant a change of opinion on our part with respect to this issue. The fact that the Congress in 1962 adopted a different rule in section 951(a) (2) (A) from the rule in section 551 (b) can only be construed as an indication that the Congress intended to achieve a different result in each. The basic statute with which we are here concerned was first enacted as a part of the Eevenue Act of 19372 in an atmosphere entirely different than that which prevailed when Congress enacted section 951 (a) (2) (A) in 1962. It was an avowed intention of the administration in office in 1937 — as well as of the Congress — to legislate foreign personal holding companies out of existence. In support of this legislation, a special committee of the Congress stated :3
There appears to be no justification for the continued existence of foreign personal holding companies owned by American citizens or residents and it is believed that practically all of such companies have been created with the sole purpose of avoiding or evading the imposition of the surtax on their shareholders. It is believed as a matter of fiscal policy that the dissolution of such companies should be effected as promptly as possible * * *
There is a marked contrast with the attitude prevailing at the time of the enactment of the Eevenue Act of 1962, which included sections 951 through 964 (subpart F) of the Internal Eevenue Code of 1954.
Neither the legislative history nor the facts in this particular case warrant a departure from the rule that where there is no ambiguity a statute should be applied as it was written and not as the court may think that it should have been written. Hatfried, Inc. v. Commissioner, 162 F. 2d 628 (C.A. 3, 1947); Caldwell v. United States, 114 F. 2d 995 (C.A. 3, 1940). There is no reason to believe that the result in this case, albeit it “harsh,” was not that intended by the Congress. There is nothing “absurd” or “futile” about that result. Accordingly, there is no basis for this Court to rewrite the statute. Cf. United States v. Amer. Trucking Ass'ns., 310 U.S. 534 (1940).
Eaum and Withey, JJ., agree with this dissent.While the Court of Appeals for the Fourth Circuit also reversed our decision in the Alvord case, that reversal was based primarily on the grounds of quasi-estoppel.
Sec. 337(b).
Report of the Joint Committee on Tax Evasion and Avoidance of the Congress of the United States, H. Doe. No. 337, 75th Cong., 1st Sess., p. 21 (1937).