2002 (10) TMI 64 - HC - Income Tax

1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the receipts from lease and sale of horses are assessable as income in the hands of the assessee? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in rejecting the assessee s contention that proceeds from sale of horses are to be considered for assessment only under the head Capital gains and not under any other head of income? - 3. On the facts and in the circumstances of the case, whether the Tribunal was correct in holding that the horses are not personal effects of the assessee? - 4. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the entire receipts from the lease of horses accrued in those years when the auction took place, even though the lease was for a period of more than one year? - once we hold that the income is arising under the head Business the question of assessment under the head Capital gain does not arise. Accordingly, we answer all the questions referred to us in the affirmative, against the assessee and in the favour of the Revenue.

Summary

The High Court of Madras held that income from lease and sale of horses is assessable as business income, not capital gains. The income should be assessed in the year of accrual, not receipt. The Tribunal's decision was upheld, and all questions were answered in favor of the Revenue.