- 62 -
predicated upon a projected stream of royalty income, and this
Court merely rejected the taxpayers' valuation method.
Petitioners misread and distort our Provizer opinion. In the
Provizer case, overvaluation of the Sentinel EPE recyclers,
irrespective of the technique employed by the taxpayers in their
efforts to justify the overvaluation, was the dominant factor
that led us to hold that the Clearwater transaction lacked
economic substance. Likewise, overvaluation of the Sentinel EPE
recyclers in these cases is the ground for our holding herein
that the Partnership transactions lacked economic substance.
Moreover, a virtually identical argument was recently
rejected in Gilman v. Commissioner, supra, by the Court of
Appeals for the Second Circuit, the court to which appeal in
these cases lies. See Golsen v. Commissioner, 54 T.C. 742, 756-
758 (1970), affd. 445 F.2d 985 (10th Cir. 1971). In the Gilman
case, the taxpayers engaged in a computer equipment sale and
leaseback transaction that this Court held was a sham transaction
lacking economic substance. The taxpayers therein, citing Todd
v. Commissioner, supra, and Heasley v. Commissioner, supra,
argued that their underpayment of taxes derived from
nonrecognition of the transaction for lack of economic substance,
independent of any overvaluation. The Court of Appeals for the
Second Circuit sustained imposition of the section 6659 addition
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