Compensation for temporary loss of use of a jetty was held to be revenue, not capital, and taxable as trading receipt.

Compensation received for temporary loss of use of a damaged jetty during repairs was treated as revenue rather than capital because it was paid for the taxpayer's inability to use the asset in trade, not for its permanent destruction or disposal. The receipt was viewed as replacing trading profits that would have been earned from ordinary commercial exploitation of the jetty, and the method used to quantify the sum did not change its character. It therefore filled a hole in trading profits and was taxable as a trading receipt.

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Issues: Whether compensation received for loss of use of a damaged jetty during repairs was a capital receipt or a revenue receipt chargeable to income tax as a trading receipt.

Analysis: The compensation was paid for the taxpayer's inability to use the jetty in its trade for 380 days, not for the permanent destruction or disposal of the capital asset itself. The loss of use represented the profits that would have been earned from the ordinary commercial exploitation of the jetty, and the method used to quantify the sum did not alter its character. On the true nature of the claim and the receipt, the amount filled a hole in the trading profits and was attributable to revenue rather than capital.

Conclusion: The sum was a revenue receipt and taxable as a trading receipt, not a capital receipt.

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