( 1 ) A short, though not quite simple, question of law arises for consideration in the present reference. The question, whether a particular expenditure is of a capital nature or not, may prove ticklish and intricate in the facts of a particular case. In the instant reference, such a question falls for determination. The point for consideration in the present reference is whether the expenditure incurred by the assessee on renovating the buildings, reconditioning the machinery and clearing the land of debris in one of its collieries, known as South Samla Colliery, for restarting the operation of digging coal therefrom, after a long lapse of time, during which period this colliery had remained under military occupation, is in the nature of capital expenditure or not.

( 2 ) THE assessee is a registered firm which owned several collieries in West Bengal and Bihar. One of such collieries owned by the assessee is known as South Samla Colliery. South Samla Colliery was under military occupation since 1942 and was derequisitioned in 1955. This colliery could not be worked by the assessee during these years of military occupation. Expenses, however, had been claimed by the