B2.322 Expenditure intended to benefit the trade in the future
If the requisite purpose for incurring the expenditure is established, there is no further enquiry into whether that expenditure actually produces or increases profits. The fact that the expenditure can only produce a return in the future, if at all, does not prevent its being incurred for the purposes of the trade. In Vallambrosa Rubber Co Ltd1, one-seventh of a rubber estate was, in the year in question, in the production stage, the other six-sevenths being still in process of cultivation towards reaching that stage. It was held, nevertheless, that the whole of the expenditure for the superintendence of the estate, for the weeding of the ground, for keeping down pests and for keeping the estate in good condition, were deductible in computing the profits of the company for the accounting period in question.
In Noble (BW)
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