What is the book called where a princess puts her three dresses into nutshell?

The book you're thinking of is likely "The Princess Who Could Not Cry" by Eleanor Farjeon.

In this story, Princess Helena is unable to cry. To help her, her wise old nurse gives her three dresses – a red dress for anger, a blue dress for sadness, and a yellow dress for joy. These dresses magically shrink down to the size of nutshells when the princess feels the corresponding emotion.

Let me know if you have any other questions!