1983 (1) TMI 122

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..... of the horses considered in the assessment order was a race horses for the relevant period or even for a few years prior to the accounting year. The assessee had been a breeder of horses right from the year 1951 and all long the income from breeding of horses was exempt u/s 10(27) of the IT Act, according to which any income derived from business of live stock breeding or poultry or dairy was exempt. Having appreciated this position of law the ITO had not brought such income into the Ken of taxation in the courses of originals assessment. There was no material before the ITO to reopen the assessment and it was only a case of change of opinion. Alternatively it was argued that income from race horses as mentioned by the ITO was assessable f .....

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..... e from either horse racing or horse breeding and that is why he had in his assessment left out such income from the periphery of tax. Sri Ramaswamy was at great pains to urge that all through the assessee has been carrying on the business of breeding horses and the ITO never chose to tax him. When asked about the disclosure of the income from this business his arguments was that this income was never disclosed inasmuch as the same was exempt. Probably for forgot that an income which is exempt under any provision of law has to be disclosed and exemption claimed therefor. Nothing of this kind appears to have been ever done on his behalf. He emphasised that this matter was in the notice of the ITO who had proceeded on to verbally discuss with .....

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..... essee it was contended that the animals to the sale of which the income in question relates were never used as race horses, and for this purpose reliance was placed upon a certificate issued by the Royal Western India Turf Club on 19th June 1980 which according to the assessee had been produced before the CIT(A) and referred to in the letters written to the as well as the grounds of appeal filed before him regarding which the ITO had opportunity to controvert. 5. At the stage we would refrain from expressing any opinion over this matter more particularly because a some what similar matter was before the Tribunal in respect of the year 1974-75 in ITA No. 618 (Cal) of 1978-79 and ITA No. 1146 (Cal) of 1978-79. In that case also there was an .....

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