- 39 -
income. However, in his answer and on brief respondent argues
only that this is so because petitioner sells merchandise that
must be inventoried. We have held that petitioner does not sell
merchandise. Consequently, we need not and do not engage in
further analysis of the clear reflection of income standard of
section 446. See id.
In light of the above, we hold that respondent’s
determination that petitioner’s method of accounting did not
produce a clear reflection of income was an abuse of discretion.
We have considered all arguments in this case for a contrary
holding and, to the extent not discussed above, find those
arguments to be without merit or irrelevant. To reflect the
foregoing,
Decision will be entered for
petitioner.
Reviewed by the Court.
CHABOT, WELLS, WHALEN, COLVIN, BEGHE, LARO, FOLEY, VASQUEZ,
and GALE, JJ., agree with this majority opinion.
MARVEL, J., dissents.
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