Railway companies

36 Where any amount in respect of an expenditure incurred by a taxpayer on or in respect of the repair, replacement, alteration or renovation of depreciable property of the taxpayer of a prescribed class is, under a uniform classification and system of accounts and returns prescribed by the National Transportation Agency pursuant to the Railway Act, required to be entered in the books of the taxpayer otherwise than as an expense,

• (a) no deduction may be made in respect of that expenditure in computing the income of the taxpayer for a taxation year; and

• (b) for the purposes of section 13 and regulations made under paragraph 20(1)(a), the taxpayer shall be deemed to have acquired, at the time the expenditure was incurred, depreciable property of a class prescribed by regulation at a capital cost equal to that amount.