Lenox Clothes Shops v. Com'r of Internal Revenue

HAMILTON, Circuit Judge.

The corporate petitioner operates a retail clothing store at Detroit, Michigan. A portion of its sales are for cash and a portion on the installment plan, or conditional sales contracts. Petitioner, in its income tax return for the calendar year 1936, in answer to a question on the tax form, •stated that it valued its inventories at cost. For the calendar year ending December 31, 1937, petitioner, in making its income tax return, reduced its closing inventory $6,-741.31 below cost, which was a flat reduction of fifteen percent. On December 31, 1937, petitioner credited…