Appeal of the Pevely Dairy Co.

*389OPINION.

Marquette :

Two questions are presented for decision on this appeal; first, whether the amounts paid by the taxpayer to the City Dairies Co. and the Wilco Farms Dairies for customers of said companies required by it under the contracts for the sale of the respective retail dairy businesses of those companies were capital expenditures or ordinary business expenses, and second, whether certain inventory losses were properly deducted.

With respect to the first question, it is the contention of the taxpayer that amounts paid by it for customers of its vendors under the contract by which it…