*968OPINION.
Geeen:This appeal is one of three arising from the Commissioner’s determination that this taxpayer, together with Arthur Zinn and Martin Zinn, realized a taxable gain at the time the American Safety Eazor Corporation acquired the stock of the Gem Safety Eazor Corporation.
The Commissioner asserted the deficiency upon the theory that the gifts of stock of the Gem Safety Eazor Corporation, made by the taxpayer and Arthur and Martin Zinn to their respective wives, were not tona fde gifts and that the sale of the stock was in fact made by the husbands to the American Safety Eazor Corporation with a consequent taxable gain to the husbands. The Commissioner determined this gain to be the difference between the par value of the stock held by the taxpayer in the Gem Safety Eazor Corporation and the price at which it was purchased by the American Safety Eazor Corporation.
Only one issue was raised by the petition and answer. That issue was whether the gifts were tona -fide. All of the proof was directed toward this issue. ISTo evidence was introduced which would serve as a basis for the determination of a taxable gain from any other transaction.
*969In cases of this type, all of the circumstances surrounding the questioned transaction are and should be subjected to the closest scrutiny. It is difficult indeed to distinguish between cases where the parties have acted in good faith and cases where they have not acted in good faith. This difficulty is due to the close relationship of the parties and to the fact that they may have had verbal agreements or understandings which are unknown to the Commissioner and which they refuse to disclose on the witness stand. Such cases arouse a suspicion as to the bona fides of the transaction. That is the case here. The entire record in this appeal has been examined and analyzed with unusual care by every member of the Board. We have tested it from every angle which the record will permit and we find therein nothing to warrant us in holding that the transfer of the stock by this taxpayer to his wife was not a bona fide gift, vesting in her unconditionally every right of title and ownership which the taxpayer had. It was not a gift of the proceeds of the sale. No contract was made by the taxpayer and his associates for the sale of this stock. The sale was made pursuant to a contract between the wives and the American Safety Razor Corporation. Upon the issue presented, we must find for the taxpayer.
There is in this record no proof which would warrant any conclusion on our part as to the amount of the gain or loss, if any, realized or sustained by the partners on the transfer of the assets of the Gem Safety Razor business to the Gem Safety Razor Corporation.
On reference to the Board, Arundell did not participate. Korner, Marquette, Smith, and Trussell dissent.