mine can be expensed in that single year or whether it has to be capitalized granite rock operated the they are wilson quarry a granite quarry and it's operated it for about one hundred years in granite quarries you remove the sand and dirt and clay overburdening and you take it to a disposal site and then you have the you expose the quarry which can be mined and take to processing in there without relying on a doctrine and in fact what what judge parker said in that case basically was it makes sense in mining when you're looking at the expense of getting to that particular or their call granite that you could take that as an expense of getting that granite because otherwise if you capitalize it you're making the granite you're receiving right now unrealistically profitable and the granite that you would mind later unrealistically expensive and that were after the case of the i r s codified the regulation we have here it's a rough approximation and if you if you read the case and the regulation and the together they seem to mean the same thing what i'm interested in your showing what are you relying on with respect to the showing in this case that you problem within that regulation we come within this regulation for a number of reasons first of all the expenditures to put in the new conveyor belt and we're only talking about the conveyor belt here not the purchase of land the expenditure for the new conveyor belt well stoli to maintain the normal output to mine at the end of their answering brief they say there are questions of fact raised here but there are questions of fact only go to the capacity of the conveyor belt here what we're talking about is remember the regulations  normal output and the case i believe talks about production the mine cannot produce any more efficiently because of this conveyor belt the conveyor belt was originally going to have the same capacity it's arguable it still ha the same capacity but they operate at a little higher what happened was when the before under the old conveyor belt system and the old site we wanted to have one years question as we call it and they are together enough overburden off so that we can access the granite during the rainy season we cannot remove the overburden during certain parts of the year we can mine during those parts of the year so we want to have enough overburden removed so that we can access and the late eighty's we realized that the hits that we're using on our property were going to become full so we needed to have a new dump site just to maintain the same capacity the whole idea of  recession doctrine is based on excavation some of the cases look at it as increasing the size of the hall on one and the flooding cases for example and the x and the escape if the original of this proposal site or sites have limited capacity there would have been no need to have a new conveyor belt if they haven't well problem his problem it isn't even then he said if we could have moved that same conveyor belt and added onto it and to go to the new dump site rather than just adding a new conveyor belt he didn't seem to have a problem  t that new dumps increase the value of the hope property no it doesn't let me amend that answer yes it does but that's why we're not trying to amendment but what i was looking at i was interpreting your question incorrectly the conventional belt does not at the dump site does it clearly does and we're not asking for the expense specificity the investment in the  property that might have been expensed but there they achieved other rights as well here we're not talking about the dump site itself we're just talking about a conveyor belt we're getting a new conveyor belt instead of an old conveyor belt or extending the old conveyor belt but has never been a problem even in marsh fork and the court allowed the expense of an entire new lou locomotive that's an additional locomotive and so here it i think we're falling into the trap of minor vs major which is what the court which is with the i r s used to argue whether it's a minor expense or a major expense and that is something just where had trouble with to this conveyor belt and the dump site is going to be operational for ten to twelve years but the locomotive in marsh fork was going to be able to be used for eight to ten years the fact that it's new versus old shouldn't be a factor the fact that it's a major expense versus a minor expense shouldn't be the factor the factor should be as judge parker said in march fourth and that's he said twenty two years later when he was chief judge and harm and the factories whether it is to maintain production soley to maintain production as the mining faced receives the nature of mining is that you have the excavation you have the removal of materials it creates unique problems for if you increase production  if we operated to mine faces that would be different yes if we operated and a different mine face however that wouldn't be different as the sixth circuit said united states gypsum when we and the mining company they are moved from one min space to another mine if the i r s said no you're jumping to an entirely different location and the circuit said no it's still the nature of a receding mine you have the excavation you've moved to another location and you have it they still allow the second the new mine face to be deducted for the same reason i don't think the fact that we went to a new dump site should be different it was an expense only to maintain production and not increase the value of the mine or decrease costs your position as i understand it is the taking are the overlay to naval your client to mine the gran we do not know from this record but the old conveyor belt under the receding mine face doctrine you have to already be fully operational so if the old conveyor belt was put in when the mine was opened it would have had to have been capitalized receding mindspace doctrine only applies after you are fully operational so if we were starting a mine here and putting in a conveyor belt it would have to be capitalized are these findings  it's clear that this conveyor belt is obviously capital in nature and it would have to fall within it would have to satisfy for requirements in order to qualify for current production first the belt would have to be necessary to maintain normal quote for purposes of our summary judgment motion which the court granted we we don't dispute that we did however raise in opposition to the taxpayers motion whether the conveyor belt was necessary at that time because during discovery  because of the recession of the working place of the mining and give me an example of a piece of equipment for this type of mining that would qualify under the well if you are making an expenditure that's necessitated by the fact that the mind is going away from you for it if you're laying it so it's hard to illustrate with an open pit because these people didn't need to move their input crusher nor that did they need to move their plant but suppose they had to wait conveyor belt going closer to the receiving place of the granite one that would qualify that would that might qualify going towards the mine yes but the fact that the conveyor belt goes to a disposal site that fills up i would have tried them all and requires the company to install a new conveyor belt to go to a new disposal site going away from the mine that doesn't qualify i have trouble with with anything going away from them from the mouth of the mine so they are right this conveyor belt operations ye slowly well in the case law that's developed and this is the regulation that actually was developed from case law the types of expenditures  e that don't qualify have have to do with don't have to do with the fact that the mine is going away from you for instance in the harmon c if you capitalized it you are charging the expense against the future units of production and when a coal mine gets deeper and deeper and you have to lay track you have to deep in your elevator what that's what you're referring to yes and here it's probably happenstance that this whole happens to be full and you know they make an expenditure to you know get dumping rights for a new twenty tons of these are mobile units these are fixed ok so it's so it's not a case where it's in a coal mine you need to lay track or you need to extend electric lines to get you closer to the base of the mine it has nothing to do with that because it's an open pit it's just that you need a place to quit the spoil so in your view is that this was the primary purpose of this conveyor equipment was to create a new place for putting the spoil a new place to put this oil and that should be treated as a capital expense of amortized over the useful life of the conveyor that's right other disposal sites were full of without it they couldn't maintain normal production well you would need to at least truck it off somewhere or put it put it in a barge you could even put it into orbiting i mean you  have to put your overburdened somewhere but what was necessary to maintain normal production well there is i mentioned for purposes of their motion there is a question you know that with filling in the increase production or the rate of extraction is that do you agree with that i have i have a problem with that and i was looking during the opening to see if i could find the exact place where i remembered it and i couldn't i thought that somewhere in the record that this conveyor belt was wider than the old conveyor belt and i could it faster and i did when i i'm lost a little bit here and help help me out you know equipment does get better over time automobiles are safer cleaner  methods of the extracting or from mines gets better more efficient less polluting etc if a piece of equipment qualified in every other respect under receiving face would the fact that it was more efficient than the equipment it was replacing disqualified yes because it would decrease the cost of the unit production and that would be a problem under the regulations but this conveyor belt in this day in the deposition of one of but if the machine or track or engine that went on the tracks or indeed the tracks themselves because of modern welding techniques were more efficient school's out they don't qualify so that what you're saying ye there is it did operate at i mean they were able to get a one month cushion port per year so that in even aside from the value of this thing is contributing to the value of the mine or or improving the value of mine debate whether you capitalize it or whether your expenses in that twenty one million dollars is shot pretty soon you're talking about room money regulation doesn't make sense to me but i think counts with a good government has pointed to this factor which seems even if you need everything else if it decreases your cost of production in other words if it's more efficient i agree schools out absolutely if it decreases the cost of production in other words if we were able to remove the overburden so much faster that we were able to produce more granite then yes it is every year they were able to get a year and a month overburden removed and that was because for the year or two that the that they they had to remove the overburden which trucks while they were putting in the new conveyor system they lost that one year cushion so in six years they have gotten halfway to where they were before so they have not incurred they have not increased their production they haven't even caught up to where they were and they haven't decrease the cost i have i have no doubt if we were dealing with some exactly the hypothetical i gave if we were able to remove overburden faster which allowed us to mine faster and decrease cost increase production yes they'd be right but that's not what happened here i'm a little disconcerted that the government is now taking the position that only conveyors going to the mine faced extensions  would count and nothing for moving away from the mine case that's completely different from their their position in the district court judge where i ask ask the government and that's a little awkward as transcripts are in your argument if  granite rock could have simply when the hall got built an incremental section of what they already had to go to the new poll would that have been deductible mr moore for the government i think so it would have your honor with the receding police is made not by the conveyor belt but by these scrapers is that correct it is correct inside the pit they have the scrapers right there at the mine face and they dump it in the conveyor belt that is correct the extension here applied only to the other end of the verano it never moved closer to the receding it has not at this point it was never intended as no no but that it has never been their position before that that was the fatal flaw we handle that issue on pages thirteen and fourteen but so briefly because all we're pointing out in our opening brief they've already conceded this point the purpose of the proceeding mindspace doctrine is definitely as counsel argued it comes from marsh fork it is good accounting to say that the expense of getting to this granite should be applied to this granite scraping away the overburden and removing it to get to this granite that cost should apply now to that granite part of  with it is supported by an interpretation of the regulation alone we don't need a new marsh fork interpretation to ality your position etc i think that's true and maintain the normal soley because of the recession of the working face of the mine judge parker said in marsh fork that the expenses are made solely for the purpose of maintaining the capacity of the mine as the working space i mean they say the same thing they seem to be coming in now and saying that lack of capacity is something different from the overburden they've never before disputed removal of overburden would be an appropriate expense but having to put it somewhere is just the obvious out of having to excavate it and this falls directly under