Guy T. Gibson, Inc. v. Commissioner

An importer of merchandise, keeping its books on an accrual basis, during 1929 and 1930 paid duties computed on the "entered value" of the merchandise imported. Appropriate steps were taken by the Government to collect additional duties but because of litigation carried on by petitioner and others the additional duties were not paid until 1935. In 1936, upon termination of the litigation, petitioner eliminated an asset account set up on its books in an amount equivalent to the additional duties paid in 1935 and deducted this amount from its gross income. Held that the claimed deduction was…