
    L. S. PLAUT & CO. v. COMMISSIONER OF INTERNAL REVENUE.
    No. 4400.
    Circuit Court of Appeals, Third Circuit.
    Jan. 5, 1931.
    Hugh C. Bickford and R. Kemp Slaughter, both of Washington, D. C., for petitioner.
    G. A. Youngquist, Asst. Atty. Gen., and Sewall Key and Norman D. Keller, Sp. Assts. to Atty. Gen. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and Stanley Suydam, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for respondent.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   BUFFINGTON, Circuit Judge.

In adjusting its taxes, an old, large, and highly successful department store sought to include in its capital account $200,000 for good will. There was proof of the steady growth of its business, of the increase of its profits, and of the high regard in the way of good will it had earned and retained in the community where it did business for some sixteen years. Indeed, these factors quite justified a much greater good will value than the $200,000 claimed. But inasmuch as a partnership agreement fixed the value at that figure in-case of the death or retirement of partners no greater one was claimed. That there had been a decrease in profits for some few years in this period of steady growth in business and profits was shown without contradiction to have been due to temporary, causes growing out of a selling war between the firm and retiring partners, hut from the end of this exceptional situation the business emerged stronger than ever and steadily grow in volume. We are therefore of opinion that the refusal of the Commissioner to allow anything whatever for the valuable good will of this business was unjustified and therefore arbitrary, and as the evidence was clear that such good will was in excess of the amount contended for, we are of opinion the action of the Board of Tax Appeals affirming the Commissioner should be reversed, and the cause remanded with directions to- allow the $200,000 allowance claimed.  