1979 (2) TMI 13

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..... wner of race horses using them for the purpose of earning income from the races. The assessee sold three horses and incurred a total loss of Rs. 38,000 and claimed the said amount as deduction under s. 36(1)(vi) of the Act. The case put forward before the ITO was that the horses had to be withdrawn from the races since the certificates granted to them had been revoked by the race club authorities and that they had become permanently useless for the purpose of the racing business. This claim of the assessee was negatived by the ITO on the ground that the horses were not dead or permanently useless for the purpose of the racing business. On appeal, the AAC also hold that unless the horses were dead or had become permanently useless the deduct .....

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..... seless because without a certificate from the race club the horse could not have been used in the races. The fact of revocation of the certificate had been intimated to the race clubs at Calcutta and Bangalore as the said horse had been running in races conducted in those places. The result was, the see could not run the horse in any of the race clubs where he was running previously, after January 14, 1969, when the certificate came to be finally revoked. After noticing this fact the Tribunal when it came to the question of finally determining the assessee's liability to deduction found that : " Since the appellant has not discontinued the business of running race horses and since the material on record is not sufficient to establish that t .....

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..... permanently useless, as the finding given earlier clearly states that the certificate finally came to be revoked and the same fact was intimated to the other race clubs also. As already pointed out, when the certificate is revoked, the horse would be useless for participating in races, and there can be no doubt about its having become permanently useless, for the purpose of the business of " racing ". The, result is, both the reasons given by the Tribunal are not correct and the conclusion that s. 36(1)(vi) does not apply to the present case is 'unsustainable. 'For these reasons, the question is answered in the negative and in favour of the assessee. The assessee will be entitled to his costs. Counsel s. 500.
Case laws, Decisions, Judge .....

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