Revenue expenditure on restoring a colliery after requisition remained deductible as business outlay, not capital investment.

Expenditure incurred after derequisition of a colliery to renovate buildings, recondition machinery and remove debris for resuming mining operations was held to be revenue expenditure. The work merely restored an existing business unit to working condition in a continuing business, with no new asset created and no enduring advantage acquired. The special provision for current repairs did not prevent allowance under the general business-deduction provision merely because the items were not current repairs. As the outlay was wholly and exclusively for business purposes and incidental to the assessee's trade, it was deductible.

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Issues: Whether expenditure incurred on renovating buildings, reconditioning machinery and removing debris to resume mining operations after temporary military requisition of a colliery was capital expenditure or revenue expenditure deductible under the residuary business-expense provision, notwithstanding the special provision for current repairs.

Analysis: The expenditure was incurred after derequisition of the colliery for the limited purpose of restoring an existing business unit to working condition and resuming production. No new asset was brought into existence, no enduring advantage was acquired, and the work done was part of the process of profit-earning in a continuing business. The special provision for current repairs did not exclude consideration of such expenditure under the general deduction provision merely because the repairs were not current repairs. On the facts, the outlay was wholly and exclusively for business purposes and was incidental to the assessee's business.

Conclusion: The expenditure was revenue in nature and was allowable as a business deduction; the assessee succeeded on the issue.

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