| 17/5/2012 |
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| Board of Special Commissioners - Cases |
| Case no. 38/54 |
Decided: 25 February, 1955 |
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No deduction is allowed in respect of exhaustion of capital (a quarry) - article 11(c), now 26(c), Income Tax Act
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Appellant acquired a quarry field from his father and, at the same, transferred another field to the latter. But the field ceded by appellant was of greater value than the one ceded to him by his father, so he claimed an exhaustion allowance to contemplate for the premium he paid for the acquisition of the quarry (equal to the difference between the values of the two fields).
The Commissioner maintained that article 11(c) specifically excluded any deduction in respect of exhaustion of capital.
The Board quoted several U.K. tax cases and authoritative texts, all agreeing that no deduction was allowable for exhaustion of mines and quarries. The Board held, however, that an expense in respect of rent (Lm14) paid by appellant was deductible.
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