41 T.C. 840">*840 The respondent determined deficiencies in the petitioner's income tax, as follows:

41 T.C. 840">*841 The sole issue for decision ¹ is whether respondent was correct in including in petitioner's income the net proceeds received by petitioner's stockholders 1964 U.S. Tax Ct. LEXIS 135">*136 upon the sale of certain crop share rents purportedly distributed to them by petitioner as dividends in kind in each of its taxable years ended December 31, 1958, through December 31, 1961, either on the ground (1) that the sale should be imputed to the petitioner, or (2) that the "distribution" by petitioner was an anticipatory assignment of income.

FINDINGS OF FACT

Most of the facts have been stipulated, and the stipulation of facts, together with the exhibits attached thereto, is found accordingly.

Petitioner is a corporation organized on July 1, 1955, pursuant to the laws of the State of Washington. Using the cash method of accounting, it timely filed its income tax returns for the years involved herein with the district director of internal revenue at Portland, Oreg. Petitioner was organized by Geoffrey A. Dorsey, Sr., and his wife, Jessie Dorsey (hereinafter referred to as 1964 U.S. Tax Ct. LEXIS 135">*137 Geoffrey and Jessie, respectively), for the primary purpose of owning and "leasing to others" certain farmlands owned by it. Geoffrey and Jessie transferred these lands to petitioner at the time of its incorporation and in exchange therefor received all of the stock outstanding in petitioner. Between December 1958 and December 1960 Geoffrey and Jessie transferred portions of their stock in petitioner to their son, Geoffrey, Jr. At all times relevant to this proceeding, no persons other than these three individuals owned stock in petitioner. ² During the taxable years herein involved, Geoffrey was petitioner's president and treasurer and Jessie its vice president and secretary. Petitioner had no other officers or employees.

Petitioner, during the period involved herein, was the sole owner of 11 noncontiguous farms consisting of approximately 1,765 acres of arable land in Douglas County, Wash. Petitioner is not presently, nor has it ever been, engaged in the actual cultivation 1964 U.S. Tax Ct. LEXIS 135">*138 or tilling of the farms it owns. Instead, it leased each of the farms to a tenant under a crop share arrangement. The tenant in each instance operated the farm and raised wheat or some other grain. Pursuant to these crop share arrangements, petitioner was entitled, generally, to one-third, sometimes to one-fourth, of the farm's production as a crop 41 T.C. 840">*842 share rental. Petitioner did, in fact, in each of the taxable years involved herein, receive in kind, rather than in cash, its share of the crops produced on these farms. In all but one instance, the crops it received were stored in a local independent warehouse facility. Petitioner's ownership of such grains was evidenced by negotiable warehouse receipts. ³

At all times relevant hereto, petitioner retained, as its local agent, the firm of A. B. Dorsey & Son, which specialized in the business farm management for nonresident owners. ⁴ Aside from such duties as arranging petitioner's share crop agreements with tenant farmers, advising the tenant farmers 1964 U.S. Tax Ct. LEXIS 135">*139 as to farming techniques and the crops to be grown, representing petitioner in connection with the various agricultural programs of the U.S. Department of Agriculture, and checking the crops at various times for grade, weight, and division between petitioner and its tenants, the local agent also advised petitioner concerning the marketing or other disposition of its crop share rents and carried out the actual mechanics of marketing or selling the grains. In return for these services, the local agent, pursuant to agreement, was to receive a fee equal to 5 percent of the net proceeds of the sales of petitioner's share crops.

In August 1958, shortly before the crops on petitioner's farms were to be harvested, Geoffrey discussed with the local agent the possibility of petitioner's transferring to its stockholders warehouse receipts evidencing legal title to a portion of the crop share rents to be received by petitioner in that year. Geoffrey was concerned with whether the shareholders would be permitted, under applicable regulations of the Department 1964 U.S. Tax Ct. LEXIS 135">*140 of Agriculture, to sell the crop shares produced on its farms. Therefore, he asked petitioner's local agent to discuss this question with the district office of the Department of Agriculture. Petitioner's local agent was advised by a representative of that office that the stockholders would be able to obtain wheat marketing certificates and be permitted to sell the grains, with respect to which they held legal title, free from penalty. On September 2, 1958, petitioner's board of directors, consisting of Geoffrey, Jessie, and a third individual (serving as a director solely for qualification purposes), resolved to distribute to the stockholders, as a dividend in kind, a portion of the crop share rents received by petitioner that year in amounts proportionate to their shareholdings. ⁵ Of some 8,358 bushels of grain received 41 T.C. 840">*843 by petitioner in 1958, a total of 2,582.17 bushels of wheat, with a net value of $ 4,264.98 (fair market value minus the local agent's 5 percent fee), was subject to this dividend resolution. The "distribution" was effectuated by virtue of a letter dated September 4, 1958, written by Geoffrey to the local agent requesting that the warehouse receipts covering 1964 U.S. Tax Ct. LEXIS 135">*141 the grain mentioned in the dividend resolution be reissued in the names of the dividend recipients. This was quickly done. ⁶ In the same letter Geoffrey requested that the farm-stored wheat received by him should be placed under a Commodity Credit Corporation (hereinafter referred to as CCC) loan for the purpose of recording the transfer of ownership therein from petitioner to himself. Geoffrey also indicated therein that the remainder of the wheat would be placed under loan later in that year, or by January 31, 1959, at the latest, and that the fee due the local agent from petitioner would be paid when the grain was actually sold. The grains distributed were in fact sold or placed under CCC loan between October 8 and 13, 1958.

Petitioner effected similar transfers to its stockholders in 1959, 1960, and 1961. The only differences 1964 U.S. Tax Ct. LEXIS 135">*142 involved were (1) the varying amounts of crops subject to the dividend distribution and (2) the fact that in 1960 each stockholder had to pay an amount equal to his pro rata share of petitioner's approximate cost for the grains distributed, and in 1961 each stockholder had to pay petitioner a fixed amount of $ 1.50 per share of stock owned. In 1961 Geoffrey owned 350 shares, Jessie 250, and Geoffrey, Jr., 100. The net fair market value of the grains distributed as dividends in kind in 1960 and 1961 exceeded the amounts paid to petitioner by its stockholders.

The following is a schedule showing the amount of grains distributed by petitioner to its stockholders during the years 1958 through 1961, the value thereof at the date of distribution, the date sold or pledged under CCC loan, and the gross and net amounts realized therefrom. 41 T.C. 840">*844

41 T.C. 840">*845 At each time petitioner declared a dividend consisting of a portion of its share crop rents, petitioner and its stockholders fully expected that the grains would be sold or pledged under CCC loan shortly after legal title was transferred to the stockholders.

There was no difficulty in making the sales or placing the grains under CCC loans because there was a ready market for the grains distributed. The transactions were carefully arranged so that, from the standpoint of appearance or form, petitioner's stockholders, rather than petitioner, made the necessary sales or placed the grains 1964 U.S. Tax Ct. LEXIS 135">*144 under CCC loans.

Petitioner did not include in its gross income for the years 1958 through 1961 any amount relating to the bushels of grain sold or pledged under CCC loan by its stockholders during that period (except for the amounts paid by the stockholders to petitioner for the grains distributed in 1960 and 1961, which amounts were less than the fair market value of the grains at the date of "distribution").

The underlying purpose of petitioner's purported distributions of these grains as dividends in kind to its stockholders was to avoid the corporate income tax thereon.

The respondent in his notice of deficiency increased petitioner's gross income in each of the taxable years 1958 through 1961 by the net fair market value of the grains as of the date of their "distribution." ⁷ Respondent cited section 1.311-1(a) of the Income Tax Regulations in his notice of deficiency and stated therein that the proceeds from the disposition of these grains by the stockholders, at least to the extent of their fair market value at the date of distribution, were imputed to petitioner, and in the alternative that petitioner's distribution of the grains as a dividend in kind was an anticipatory assignment 1964 U.S. Tax Ct. LEXIS 135">*145 of income.

In his opening statement at the trial, respondent indicated that although he would continue to proceed upon the same grounds mentioned in his notice of deficiency, namely, imputation of the sale of the "distributed" crops to petitioner and anticipatory assignment of income, he, nevertheless, wished to amend the deficiencies asserted in the notice of deficiency by including in petitioner's gross income, not the net value of the crops at the date of their "distribution" to the stockholders, but the net amounts received by the stockholders upon the ultimate sale, or hypothecation with the CCC, of the crops (including any amounts received in excess of the loan proceeds upon any subsequent redemption and sale of the pledged crops). The difference between the amounts by which respondent increased or decreased 41 T.C. 840">*846 petitioner's gross income 1964 U.S. Tax Ct. LEXIS 135">*146 per notice of deficiency and per opening statement is as follows:

OPINION

It is petitioner's position essentially that no amount is includable in its gross income during the years 1958 through 1961 on account of certain crop share rents paid to it by its tenant farmers and then purportedly distributed by it to its stockholders as a dividend in kind. Petitioner argues first that it realized no income at the time the crop share rents were paid to it by its tenant farmers by virtue of section 1.61-4(a) of the Income Tax Regulations.⁸ Petitioner next contends, relying upon the provisions of section 311(a), ⁹ that it did not, by its distribution of the crop share rents to its stockholders, realize income, either at the time of the distribution or at the time of the ultimate disposition of these crops by its stockholders (whether by outright sale or by pledge 1964 U.S. Tax Ct. LEXIS 135">*147 of the crops under CCC loan). ^{101964 U.S. Tax Ct. LEXIS 135">*148}

Respondent does not dispute that petitioner did not realize income either upon its receipt of the crop share rents or upon its distribution of said crop shares as a dividend in kind. However, respondent maintains that the proceeds received by petitioner's stockholders upon their disposition of the crops are includable in petitioner's gross income upon the ground that the sales or pledges of the crops were in substance made by the petitioner. In the alternative, respondent 41 T.C. 840">*847 argues that each distribution by petitioner, under the circumstances herein involved, was an anticipatory assignment of income.

Section 311(a), which originated in the Internal Revenue Code of 1954 and has no counterpart in prior revenue acts, provides that, aside from certain statutory exceptions not relevant hereto, a corporation shall recognize no gain or loss upon the distribution of property with respect 1964 U.S. Tax Ct. LEXIS 135">*149 to its stock. Although on its face this section seems to state unequivocally that, aside from the exceptions mentioned in the statute, the distribution of a dividend in kind cannot result in gain or loss to the distributing corporation, nevertheless, it is clear that Congress did not intend to change existing law and relieve the corporation from paying a tax where, under decisional law, income received by its stockholders was attributable to the corporation. S. Rept. No. 1622, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. 247 (1954).

Petitioner acknowledges that in addition to the above-mentioned statutory exceptions to the general rule in section 311 of nonrecognition, there are at least two additional exceptions, which if applicable, would cause a corporation to recognize gain or loss in connection with its distribution of property with respect to its stock. Thus, where property distributed as a dividend in kind is, from a standpoint of form or appearance, sold by the stockholder receiving such property, the sale proceeds are to be imputed to the corporation if, in effect, the corporation made the sale. See United States v. Lynch, 192 F.2d 718 (C.A. 9, 1951), certiorari 1964 U.S. Tax Ct. LEXIS 135">*150 denied 343 U.S. 934">343 U.S. 934 (1952); and sec. 1.311-1(a), Income Tax Regs. Also cf. Commissioner v. Transport Trad. & Term. Corp., 176 F.2d 570 (C.A. 2, 1949), reversing 9 T.C. 247">9 T.C. 247 (1947), certiorari denied 339 U.S. 916">339 U.S. 916 (1950); H. B. Snively, 19 T.C. 850">19 T.C. 850, 19 T.C. 850">857 (1953), affd. 219 F.2d 266 (C.A. 5, 1955); and Commissioner v. First State Bank, 168 F.2d 1004, concurring opinion at 1011 (C.A. 5, 1948), reversing 8 T.C. 831">8 T.C. 831 (1947), certiorari denied 335 U.S. 867">335 U.S. 867 (1948). The other nonstatutory exception to the general rule of nonrecognition in the case of a corporation distributing dividends in kind is that where the distribution constitutes an anticipatory assignment of income the income received by the stockholder is to be taxed to the corporation. Sec. 1.311-1(a), Income Tax Regs.; and Rudco Oil & Gas Co. v. United States, 82 F. Supp. 746">82 F. Supp. 746 (Ct. Cl. 1949). Cf. also Commissioner v. First State Bank, supra; and United States v. Joliet & Chicago R. Co., 315 U.S. 44">315 U.S. 44 (1942).

As for the exception whereby the sale is to be imputed to the distributing corporation, petitioner first attempts to distinguish the decisions in Commissioner v. Transport Trad. & Term. Corp., supra, and United States v. Lynch, supra, 1964 U.S. Tax Ct. LEXIS 135">*151 on the ground that (1) in the former case the sale of the asset there distributed had been negotiated by the distributing corporation, and had to a large extent been committed, prior 41 T.C. 840">*848 to the distribution, and (2) in the latter case the facilities of the distributing corporation were used to effect the sale of the property purportedly distributed to the shareholders. These tenuous distinctions can in no way abate the forceful applicability of the rationales of these decisions to the facts present in the instant proceeding.

The petitioner candidly admits that the overriding purpose of its yearly distribution of a portion of its crop share rents to its stockholders was to avoid the corporate income tax thereon. Thus, the transactions herein involved are subject to the most intensive scrutiny, and petitioner must be unusually persuasive in its legal argument when it attempts to demonstrate that Congress intended to give favorable tax treatment to the kind of transaction that would never occur absent the motive of tax avoidance. Gregory v. Helvering, 293 U.S. 465">293 U.S. 465 (1935); Commissioner v. Transport Trad. & Term. Corp., supra at 572; United States v. Lynch, supra at 720; and Diggs v. Commissioner, 281 F.2d 326, 3301964 U.S. Tax Ct. LEXIS 135">*152 (C.A. 2, 1960), affirming a Memorandum Opinion of this Court, certiorari denied 364 U.S. 908">364 U.S. 908 (1960).

It is clear that petitioner's stockholders caused the transfer to themselves of legal title to a portion of petitioner's crop share rents in each of the years 1958 through 1961 with the knowledge and expectation that virtually immediately thereafter the grains would be sold or pledged by them as security for CCC loans (and then depending upon market conditions the grains would either be forfeited or redeemed and sold).

In our Findings of Fact we listed the various factors in the record which led us to this conclusion. Some of those on which we rely are (1) that Geoffrey, the president and major stockholder of petitioner, prior to causing the first distribution, assured himself that the stockholders would be permitted, pursuant to Department of Agriculture regulations, to sell or hypothecate the grains to be "distributed"; (2) that petitioner agreed with its local agent that the fee owed to it by petitioner would be paid by the stockholders upon their disposition of the grains; (3) that petitioner arranged with its local agent to have the warehouse receipts evidencing ownership of the 1964 U.S. Tax Ct. LEXIS 135">*153 grains reissued in the names of petitioner's stockholders so as to facilitate the disposition of the grains; and (4) that in the years in which a "distribution" occurred, the grains were sold or pledged under CCC loans shortly after legal title to the grains was transferred to the stockholders.

Petitioner argues that the Lynch and Transport Trad. & Term. Corp. decisions are not apposite because petitioner's stockholders, in disposing of the crops they received as a dividend, did not avail themselves of petitioner's facilities or its corporate form. In answer to this, reference is made to the pertinent Department of Agriculture regulations which indicate that petitioner's stockholders may very well have relied upon petitioner's corporate form to a large extent in the disposition of the wheat "distributed" to them. The record reveals 41 T.C. 840">*849 that each of petitioner's stockholders was issued in his own name a wheat marketing certificate, which he used in connection with selling the wheat "distributed" by petitioner. The applicable portions of the Department of Agriculture regulations for the years involved indicate that only a "producer" of wheat or a "successor in interest" would have been 1964 U.S. Tax Ct. LEXIS 135">*154 permitted to dispose of the wheat by use of marketing certificates. ¹¹ Petitioner's stockholders could not be considered a "producer" or a "successor in interest" under the applicable definitions, but would have to be an "intermediate buyer." ^{121964 U.S. Tax Ct. LEXIS 135">*156 1964 U.S. Tax Ct. LEXIS 135">*157 1964 U.S. Tax Ct. LEXIS 135">*158} Although petitioner's stockholders, as intermediate buyers, would have been permitted under the applicable regulations to dispose of the wheat distributed to them, they could not have done so pursuant to the authority of a wheat marketing certificate, ¹³ but could have done so only pursuant to the authority of "an intermediate buyer's record and report." ¹⁴ Thus, it may well be that the local office of the Department of Agriculture, which issued the wheat marketing certificates to petitioner's stockholders, as individuals, was treating the transaction as though petitioner, 41 T.C. 840">*850 which met the definition of "producer," would be making the sale. A similar result is suggested by reference to the relevant Department of Agriculture regulations concerning CCC loans on wheat. In pertinent part, these provide that in order to qualify for hypothecation, the wheat must have been produced by an eligible producer and that it must be owned at the time of the 1964 U.S. Tax Ct. LEXIS 135">*155 loan by a "producer" or his "successor-in-interest." Petitioner's stockholders could not have qualified as such during the years in question. ¹⁵ Nevertheless, both Geoffrey and Jessie did secure, in their own names, CCC loans on a portion of the wheat "distributed" in 1959. Because of the applicable regulations governing the Government's Crop Wheat Loan and Purchase Agreement Program, only petitioner, and not its stockholders, was eligible to procure CCC loans. The only conditions under which the stockholders could have obtained CCC loans would be if the local office of the Department of Agriculture (which entered into the loans with Geoffrey and Jessie) had regarded the situation as one in which petitioner, in effect, were making the loan. Thus, at least to this extent, Geoffrey and Jessie must have utilized one of petitioner's facilities, namely, its corporate form.

Another factor indicating that the stockholders, in substance although not in appearance, relied upon petitioner to make the sales is that prior to the first distribution Geoffrey, as petitioner's president, described to its local agent, A. B. Dorsey & Son, the terms of the "distribution" (including the anticipated sales of the distributed grains by petitioner's stockholders). 1964 U.S. Tax Ct. LEXIS 135">*159 Moreover, Geoffrey, at that time and in each year subsequent thereto, requested A. B. Dorsey & Son to make the necessary arrangements for transferring legal title in the grains to petitioner's stockholders and for carrying out the actual mechanics of the anticipated sales of the grains. To this extent, it can be said the stockholders relied upon petitioner to make the basic arrangements with respect to the disposition of the "distributed" grains.

However, even disregarding these uses of petitioner's facilities by the stockholders in disposing of the crops, we find it of no significance that under the circumstances herein involved that, from a standpoint of form or appearance, the grains were sold or pledged under CCC loan by petitioner's stockholders rather than by petitioner. Unlike the situation in United States v. Lynch, supra, the petitioner herein had no other facilities, aside from those mentioned above, which the stockholders could have found useful for purposes of effecting the sales. Petitioner was merely an absentee landowner whose day-to-day problems were administered by its local agent. It had no sales force. Petitioner would have sold or pledged the grains in the very 1964 U.S. Tax Ct. LEXIS 135">*160 same way that its stockholders did, namely, by directing the local agent either to sell, or pledge the grains with the CCC. Moreover, since there was 41 T.C. 840">*851 a quoted market price for the grains and a ready market, no negotiations had to be conducted. Petitioner's local agent, which had agreed with petitioner to market the grains distributed to the stockholders, was an expert in this field and was able to dispose of the grains as a matter of routine. Furthermore, petitioner had no facilities for storing the grains it received as crop share rents. These grains were stored in a local, independent warehouse which had issued to petitioner warehouse receipts evidencing petitioner's ownership of these grains. Petitioner's board of directors effected the purported dividend distributions by declaring a dividend in kind and directing its local agent to have the warehouse receipts reissued in the respective names of the stockholder-recipients.

Upon consideration of all the circumstances involved, it is clear that we have before us an attempt by a going concern to avoid the corporate income tax on the sale of its inventory by the annual ritual of a paper transfer of such inventory to its shareholders, 1964 U.S. Tax Ct. LEXIS 135">*161 followed closely by the sale of such inventory in the ordinary course. See Meurer Steel Barrel Co. v. Commissioner, 144 F.2d 282, 284 (C.A. 3, 1944), certiorari denied 324 U.S. 860">324 U.S. 860 (1944), rehearing denied 325 U.S. 892">325 U.S. 892 (1944), affirming a Memorandum Opinion of this Court. Also cf. Wichita Term. El. Co. v. Commissioner, 162 F.2d 513, 516 (C.A. 10, 1947), affirming 6 T.C. 1158">6 T.C. 1158 (1946), where the Court of Appeals stated:

Viewed rationally, the facts and circumstances as a whole reasonably lend themselves to the conclusion that from beginning to end the successive steps taken were merely integral parts of a unified operation having for its goal the sale and passing of title of the corporation through a conduit to the ultimate purchaser. We think the Tax Court acted within its authorized province in finding that for income tax purposes the sale and conveyance of the property was made on behalf of the corporation. * * *

Also cf. Gensinger v. Commissioner, 208 F.2d 576, 578-579 (C.A. 9, 1953), reversing on this issue 18 T.C. 122">18 T.C. 122 (1952).

We believe that the facts herein involved present an even stronger case than in United States v. Lynch, supra, for imputing to petitioner the amounts 1964 U.S. Tax Ct. LEXIS 135">*162 received by its stockholders upon their disposition of the grains "distributed" to them. The circumstances of the instant case differ from those in Ripy Bros. Distillers, Inc., 11 T.C. 326">11 T.C. 326 (1948), and United States v. Cummins Distilleries Corporation, 166 F.2d 17 (C.A. 6, 1948), in that there was a finding of fact that no consensus or understanding existed between the stockholders and the corporation in the latter two cases that the assets distributed would be sold immediately upon distribution. 11 T.C. 326">Ripy Bros. Distillers, Inc., supra at 339; United States v. Cummins Distilleries Corporation, supra at 19, 21. Moreover, in those cases (1) the distributed assets could have been sold only by virtue of substantial negotiations, which were found to have been, in fact, conducted by the stockholders, and (2) the stockholder-distributees were found to have assumed real and substantial risks in connection with the disposition of the distributed assets.

41 T.C. 840">*852 Petitioner next contends that section 311(a) legislated the rationale of the Lynch case out of existence. We cannot accept this argument, especially in light of the following specific statement of the Senate Finance Committee qualifying the applicability 1964 U.S. Tax Ct. LEXIS 135">*163 of section 311:

Likewise your committee does not intend to change existing law with respect to attribution of income of shareholders to their corporation as exemplified for example in the case of Commissioner v. First State Bank of Stratford (168 F.2d 1004, cert. den. 335 U.S.).

S. Rept. No. 1622, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. 247 (1954). We do not believe that the failure by the Senate Finance Committee to specifically mention the Lynch case along with the First State Bank case affects the present validity of the Lynch rationale under section 311. See sec. 1.311-1(a), Income Tax Regs.

Petitioner's final argument with respect to the applicability of the Lynch rationale is that respondent abandoned this ground in his opening statement at the trial. It is true that counsel for the respondent did at one point in his opening statement make some remarks which, taken apart from the context of the record as a whole, might possibly suggest that respondent did abandon this ground. ¹⁶ However, upon a careful consideration of the entire record and such other factors as the demeanor and reactions of counsel for petitioner and respondent at the trial, the lack 1964 U.S. Tax Ct. LEXIS 135">*164 of a specific waiver of this ground by respondent, and the attention the Lynch doctrine received in the briefs of both petitioner and respondent, we cannot accept the contention that respondent did, in fact, waive or abandon this ground. An examination of the record indicates that at no time during the trial does it appear that counsel for petitioner understood respondent to be waiving the Lynch argument. In fact, most of the testimony of petitioner's first witness, who was introduced subsequent to respondent's opening statement, was directed toward the refutation of a Lynch type argument. Respondent's cross-examination of petitioner's first witness was directed to showing that pursuant to the regulations of the Department of Agriculture the grains purportedly distributed by petitioner to its stockholders could, in fact, have been sold or placed under CCC loan only by petitioner and not its stockholders. Petitioner is not claiming surprise with respect to the inclusion of a Lynch type argument by respondent on brief, for petitioner amply argued this issue on the merits in his opening and reply briefs. See Boe v. Commissioner, 307 F.2d 339, 342 (C.A. 9, 1962), affirming 35 T.C. 720">35 T.C. 720 (1961). 1964 U.S. Tax Ct. LEXIS 135">*165 We hold respondent did not abandon this argument.

41 T.C. 840">*853 Because of our holding that net proceeds received upon the disposition of the "distributed" grains are imputable to the petitioner, we do not consider respondent's alternative ground that petitioner's yearly distribution of a portion of its crop share rents constituted an anticipatory assignment of income.

Finally, we must consider petitioner's argument that respondent assumed the burden of proof in this case because, in his opening statement at the trial, he asserted amended deficiencies based upon the inclusion, in petitioner's gross income in the years 1958 1964 U.S. Tax Ct. LEXIS 135">*166 through 1961, of amounts equal to the net sums received by petitioner's stockholders upon their sale or hypothecation of the crops "distributed," rather than upon the inclusion of amounts equal to the net value of the crops at the date of their "distribution." Petitioner contends that respondent, by so amending the deficiencies, changed his ground and introduced new matter. We need not consider this question, ^{171964 U.S. Tax Ct. LEXIS 135">*167} for respondent's assertion of amended deficiencies based upon increasing petitioner's gross income by the net amounts received by the stockholders upon the disposition of the "distributed" grains resulted in an increased deficiency for only 1 year, 1960. Thus, at least with respect to that year, the burden of proof falls upon the respondent. However, the result we have reached in this case is not based upon a failure of proof by petitioner. Moreover, respondent has come forward with sufficient evidence to meet the burden of proof upon him, and this Court has jurisdiction, pursuant to section 6214, to correct the amount of a deficiency, even though the amount so redetermined is greater than that specified in the notice of deficiency.

Respondent made a motion at the trial to conform the pleadings to the proof submitted so that the pleadings would reflect the amended deficiencies asserted by him. However, respondent 1964 U.S. Tax Ct. LEXIS 135">*168 has failed to file any amended pleading. See Rule 17 Tax Court Rules of Practice. Nevertheless, since a further amendment of the answer to correct the error would still be timely, Commissioner v. Finley, 265 F.2d 885 (C.A. 10, 1959), affirming a Memorandum Opinion of this Court, certiorari denied 361 U.S. 834">361 U.S. 834 (1959); and Helvering v. Edison Securities Corporation, 78 F.2d 85 (C.A. 4, 1935), affirming in part and modifying 29 B.T.A. 483">29 B.T.A. 483 (1933), we think it proper, in order to avoid delay, to accept the statements made by respondent at the 41 T.C. 840">*854 trial as an informal amendment to his answer. William C. Baird, 25 T.C. 387">25 T.C. 387, 25 T.C. 387">397-398 (1955).

Decision will be entered under Rule 50.