THE COMMISSIONER OF INCOME TAX V. HYD.RACE CLUB

RC/84/1996

AI Insights

The case involves the Commissioner of Income-tax Andhra Pradesh-II, Hyderabad as the petitioner and Hyderabad Race Club, Hyderabad as the respondent. The core issues pertained to the assessment of certain income and expenditures related to the Hyderabad Race Club for the assessment year 1987-88. The Income Tax Appellate Tribunal (ITAT) had previously ruled on these issues, which were then referred to the High Court for a definitive legal interpretation under section 256(1) of the Indian Income Tax Act, 1961. The questions revolved around the non-assessability of a specific amount as income, the applicability of section 60 regarding transfer of assets, the eligibility of certain expenditures for set-off against future income, and the correct head of income under which leasing of horses should be assessed.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 719748 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 22-02-2010
• Assessment Year: misc
• Other Referred Cases: RC.No.71 of 1991, RC.No.111 of 1991, RC.No. 27 of 1992
• Laws Referred To: Indian Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NO NE APPEARED
• Assessee Lawyers: S R ASHOK
• Keywords: Assessment; Income from leasing; Income Tax; Transfer of Assets; Expenditure on Maintenance
• Section: 60; 256(1); 74-A

Judgement Text

"IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD MONDAY THE TWENTYSECOND DAY OF FEBRUARY TWO THOUSAND AND TEN PRESENT THE HONOURABLE SRI JUSICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 8 4 OF 1996 {under section 256 (1) of the Indian Income Tax Act, 1961 in RA.No. 237/Hyd/95, dated 27-6-1995 Andhra Pradesh of ITAT Hyderabad Bench ‘A’} Between: The Commissioner of Income-tax Andhra Pradesh-II, Hyderabad. …. Petitioner V/s. Hyderabad Race Club, Hyderabad …. Respondent Counsel for the Applicant : Sri S.R. Ashok Senior Counsel Counsel for the Respondent: None appeared THE HONOURABLE SRI JUSTICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 8 4 of 1996 J U D G M E N T : (Per the Hon'ble Sri Justice B.Prakash Rao) RC.No. 84 of 1996 is referred to this Court by the Income- Tax Appellate Tribunal, A.P., Hyderabad under section 256 (1) of the Indian Income Tax Act, 1961 in RA.No. 237/Hyd/95, dated 27-6-1995 Andhra Pradesh of ITAT Hyderabad Bench ‘A’ on its file for decision on the following questions of law viz., 1) Whether on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the amount of Rs.62,749/- was not liable to be assessed, as income of the assessee for the assessment year 1987-88 ? 2) Whether on the facts and in the circumstances of the case, the ITAT was correct in holding that the amount mentioned in question No.1 did not represent income transferred without corresponding transfer of assets so as to be liable for the assessment by virtue of section 60 of the Income-Tax Act ? 3) Whether on the facts and in the circumstances of the case, the ITAT ought to have held that the expenditure on running and maintenance of race hourses was not eligible for set-off under section 74-A against the income from same source in future years ? 4) Whether on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the income from leasing of horses as assessable under the head ‘Business’ ? Heard the learned standing counsel for the petitioner and Sri C. Kodandaram for the respondent. 2. It is submitted by the counsel appearing on both sides across the bar that all the above questions which were referred to above are no longer res integra and they are squarely covered by the principles laid down by the Division Bench of this Court in RC.No.71 of 1991, RC.No.111 of 1991 and RC.No. 27 of 1992, dated 14-2- 2003, in favour of the assessee. Following the said decision, the questions referred to are answered in favour of the assessee. 3. Accordingly, RC.No. 84 of 1996 is disposed of. No costs. __________________________ JUSTICE B. PRAKASH RAO ______________________________________ JUSTICE REDDY KANTHA RAO 22-02-2010. I s L THE HONOURABLE SRI JUSTICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 8 4 OF 1996 Judgment of the Division Bench delivered by the Hon'ble Sri Justice B.Prakash Rao) Circulation Entry No. 128 Date: 22-02-2010 COMPUTER No. 43 Court Master: I s L "