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Petitioner had approximately 10 people in its accounting
section. It contracted with RCLA to perform the sales function.
Relationship With Dole
In November 1981, the Canelos group began doing business
with Dole Food Co. (Dole),6 Dole, a publicly held company, or
some of its subsidiaries or affiliated companies. Hereinafter,
Dole and its subsidiaries or affiliated companies collectively
will be referred to as Dole. The business relationship between
the Canelos group and Dole constituted a joint venture.
The first agreement between Dole and the Canelos group was a
1-year contract (1981 contract), entitled "Sales Subagency
Agreement", in which petitioner and Standard Fruit and Steamship
Co. (Standard Fruit), a company affiliated with Dole, were the
designated parties. In the 1981 contract, Standard Fruit agreed
to use its marketing resources to market more effectively in the
United States and Canada tomatoes, cucumbers, and bell peppers
grown by the Canelos growers in the Culiacan district of Mexico.
Standard Fruit would receive a commission of 25 percent of total
profit of each product, computed after subtracting from total
revenue (from sales of the product by Standard Fruit, petitioner,
6Some documents in the record refer to Castle & Cooke, Inc.,
rather than to Dole. Although the exact business relationship is
not explained in the record, it appears that Dole Food Co. was a
division of Castle & Cooke, Inc., for at least some portion of
the years in issue. For simplicity, we will use the name Dole
throughout.
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