(dissenting).
I agree with the opinion of the able trial judge that the applicable sections of the Internal Revenue Code and the decisions of this Court, Koon Kreek Klub v. Thomas, supra, and Scofield v. Corpus Christi Golf and Country Club, supra, require a holding in taxpayer’s favor.
I do not agree that the meaning of precisely worded § 501(c) (7), making social clubs “exempt” under § 501(a), is affected or changed because legislative history might show that the addition of .social clubs to the list of exempt organizations “was fostered * * * by the demands of administrative convenience”; nor do I agree that the specific statement in § 5021 that “ ‘trade or business’ shall not include the rental” and the specific statement in § 512(b) (3) that “all rents” are excluded in determining unrelated business taxable income is affected or changed because legislative history gives “no indication * * * that ■Congress was concerned with the propriety or impropriety of real estate investments * * * for social clubs.” On the contrary, this history illumines Congressional intent to exempt social clubs, regardless of the reason for doing so.
The majority distinction between this case and the Koon Kreek and Corpus Christi cases is actually in dollars involved and not in essence. The amount of rental income or the proportionate relationship it bears to a social club’s other income should not nullify the specific exclusion accorded rental income under § 502 and § 512(b) (3). The circumstance that the Fort Worth Club made a fortuitous investment in the club building does not justify taking away its exemption.
The Fort Worth Club did not “tack a profitable business on to the club” as in West Side Tennis Club v. Commissioner, supra. It simply rented part of the club building. None of the Circuit Court cases cited held such rents taxable.
While we may think that social clubs should be taxed for rental income, only Congress has the “power to lay and collect taxes on incomes.” If Congress intended, or wants, to deny this long-recognized statutory exemption, it may do so. Neither the Treasury Department nor the courts have this legislative power.
I, therefore, respectfully dissent.
. Denying exemption to a § 501(c) (2) organization (corporations organized for the exclusive purpose of holding title to property, collecting income therefrom and turning over the entire amount thereof, less expenses, to an exempt organization) operated for the primary purpose of carrying on a trade or business.