Haggard

We have three cases consolidated for argument. They involve a common question for determination. Appellants reported the net proceeds from the termination of a partnership as capital gain on their income tax returns for the calendar year 1953. The District Director of Internal Revenue, treating the said proceeds as ordinary income, asserted a deficiency which was paid and for which appellants subsequently sued for refunds. The trial court upheld the District Director’s determination. We are asked to reverse.

The evidence before the trial court consisted of a stipulation and certain exhibits.

The sole question for consideration is whether the finding of the District Court that taxpayers in substance and effect sold a cotton crop and not partnership interests within the meaning of the tax laws 1 is supported by substantial evidence in the record. The evidence being in effect documentary, the finding of the trial court does not carry the compelling effect that it might had there been oral evidence, but we are nevertheless not to set it aside unless it can be said to be clearly erroneous. Rollingwood Corp. v. Commissioner, 190 F.2d 263 (9th Cir.1951). We note also that in these…