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TMI Blog1987 (6) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... lent to the basic training fee to the owner. The scheme also provided for a subsidy of Rs. 150 per horse per month for the trainers. In respect of out of station horses the subsidy of Rs. 300 for each run to the owner and Rs. 100 to the trainer for horses which do not come within the first four places was given and there was a reimbursement of the expenses incurred for bringing the horses to Madras. The contention of the assessee is that the subsidy received by the owner did not have the character of income in his hands because it was not an expected return on any investment and it did not come through a definite source and thus did not fulfill the criteria for determining income as stated by the Supreme Court in the case of Raghuvanshi Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rses which are entered in the races conducted by the Madras Race Club. No doubt, the assessee does not maintain the horses and enter them in the races as a business venture but only as a hobby so that any excess of receipts by way of winning from the races over expenditure incurred would not have been normally chargeable to income-tax. As noticed by us in the case of M.CT. Muthiah, HUF v. ITO [1984] 10 ITD 6 (Mad.) the Income-tax Act has been amended by defining ' Income ' in section 2(24)(ix) to include winnings from races and that is the reason why such winnings become taxable, and it is also specifically provided that such income should be taxed under the head ' Income from other sources ' under section 56. Section 59 provides that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and concessions were given by the Madras Race Club. He referred to such terms for the racing season 1979/80 which conditions, he stated, were similar for the assessment year now under consideration also. Stress was laid on the fact that the subsidy in the nature of an amount equivalent to basic training fee to the owner was given where a horse ran for a minimum of four times in the case of horses of certain classes and a minimum of three runs in the case of other horses. The submission of the learned counsel was, therefore, that this subsidy had a reference only to the number of times a horse participated in the race and had no nexus to the winnings in a race by a horse which winnings alone were made taxable. In the absence of such a nex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... winning for every horse which participates. Therefore, the stipulation that the subsidy would be given on a certain number of minimum runs by a horse presupposes that the horse will have a minimum number of tries for a win. Every participation is an attempt for a win. The mere fact that in a particular participation a horse may not win does not alter the true objective of the participation which is to win the race and the winnings when obtained becomes taxable under the Act. Therefore, there is a direct nexus between the grant of the subsidy and the winnings since the subsidy is related to the participation with the object of winning. Thus, the refund of the basic training fee automatically increases the amount of receipts which the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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