
    PALM BEACH TRUST CO. v. COMMISSIONER OF INTERNAL REVENUE.
    No. 9865.
    United States Court o£ Appeals District of Columbia Circuit.
    Argued March 24, 1949.
    Decided April 18, 1949.
    Mr. B. H. Bartholow, of New York City, for petitioner.
    Mr. S. Dee Hanson, Sp. Asst. to the Atty. Gen., with whom Messrs. Ellis N. Slack and A. F. Prescott, Sp. Assts. to the Atty. Gen., of Washington, D. C., were of the brief, for respondent.
    Mr. Lee Anderson Jackson, Sp. Asst. to the Atty. Gen. and Mr. Charles Oliphant, Chief Counsel, Bureau of Internal Revenue, and Mr. John M. Morawski, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., also entered appearances for respondent.
    Before WILBUR K. MILLER and PRETTYMAN, Circuit Judges, and WATKINS, District Judge, sitting by designation.
   PER CURIAM.

This is a petition for review of a decision of the Tax Court of the United States. We think that court was right in its ruling upon petitioner’s liability for the personal holding company surtax. Its decision in that respect is affirmed upon the opinion of Judge Opper. In respect to the delinquency penalty, however, we disagree. Petitioner company was originally organized prior to the imposition of the personal holding company surtax, and it had an original business purpose quite apart from tax considerations. There was a question debatable in good faith concerning the application to it of the statutory exceptions. While those considerations do not bear upon its liability for the tax, they do bear upon liability for penalties. The decision upon the penalties is, therefore, reversed.

Affirmed in part and reversed in part. 
      
       1947, Palm Beach Trust Co., 9 T.C. 3060.
     
      
       Orient Investment & Finance Co. v. Commissioner of Internal Revenue, 1948, 83 U.S.App.D.O. 74, 366 F.2d 601, 3 L.R.A.2d 612, and eases there cited; Spies v. United States, 1943, 317 U.S. 492, 496, 63 S.Ct. 361, 87 L.Ed. 418.
     