TMI Blog1996 (1) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the assessment year 1972-73 ?" In other words, the real question that has to be considered is whether the activities carried on by the respondent/assessee (Hindu undivided family) would constitute a "business" as defined under section 2(13) of the Income-tax Act, 1961. Even according to learned counsel for the Revenue, the activities carried on by the assessee consist of acquiring race horses, maintaining and training them and employing them in different races conducted in different centres, after taking necessary assistance from other persons for running the said horses in the races and after paying requisite fees to the race clubs, which conduct the races and invite betting from the members of the public. Further, according to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated by the Department itself only as "business" and his income or loss was assessed only under "Profits and gains of business or profession". In the assessment year 1972-73, though originally the Income-tax Officer has held that the assessee's activities could not be treated as "business", the first appellate authority and, subsequently, the Tribunal have held that the said activities would constitute "business" and that, hence, the assessee's claim should be accepted. Learned counsel for the Revenue also relied on the decisions of (i) Lala Indra Sen, In re [1940] 8 ITR 187 (All) [FB] ; (ii) Janab A. Syed Jalal Sahib v. CIT [1960] 39 ITR 660 (Mad) ; and (iii) CIT v. S. S. Thiagarajan [1981] 129 ITR 115 (Mad) in support of his content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an activity as business, there must be a course of dealings either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure. " It is, therefore, clear that the two essential requirements for an activity to be considered as "business" are : (i) it must be a continuous course of activity ; and (ii) it must be carried on with a profit motive. In the present case, admittedly, the assessee carries on continuous course of activity, not only in the assessment year in question, but also in the earlier assessment years. In this connection, paragraph 24 onwards of the order of the Tribunal makes it clear that the assessee carries on a continuous course of activity in carrying on his avocation of emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whether the relevant amounts indicated therein were taxable income or were casual and non-recurring receipts and, therefore, exempt from tax under section 4(3)(vii) of the old Income-tax Act and this court answered the said question by holding that the amounts indicated were only casual and non-recurring receipt and hence exempted from tax. In that case, the assessee carried on the business of manufacturing and selling beedies. In addition, he also attended horse races regularly every year and indulged in betting and acquired horses of his own and some of them in partnership with others. From the abovesaid facts and on the actual question involved therein, it is clear that the said decision is distinguishable and cannot be applied to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racing would be income falling under the head "Other sources" they would be of a casual and non-recurring nature exempt from taxation during the relevant years and that since the income was not taxable, the losses arising from such activity could not also be set-off against income from a different source under a different head. It must also be noted here that in the abovesaid decision, the assessee himself did not claim that the income in question was from any "business". So, strictly speaking the present question did not arise there. Even the decision in Lala Indra Sen, In re [1940] 8 ITR 187 (All) [FB], will not help the Revenue in the present case. The majority judgment, no doubt, held on the facts found that the maintenance, manageme ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
