Section 74A. Losses from certain specified sources falling under the head "Income from other sources"

2[ 74A. Losses from certain specified sources falling under the head "Income from other sources". —[3] * * * * * 4[(3) 5* In the case of an assessee, being the owner of horses maintained by him for running in horse races (such horses being hereafter in this sub-section referred to as race horses),[6] [the amount of loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year shall not be set off against income, if any, from any source other than the activity of owning and maintaining race horses in that year and] shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and— (a) it shall be set off against the income, if any,[7] [from the activity of owning and maintaining race horses,] assessable for that assessment year: Provided that the activity of owning and maintaining race horses is carried on by him in the previous year relevant for that assessment year; and (b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on; so, however, that no portion of the loss shall be carried forward for more than four assessment years immediately succeeding the assessment year for which the loss was first computed. Explanation .—For the purposes of this sub-section— (a) "amount of loss incurred by the assessee in the activity of owning and maintaining race horses" means— (i) in a case where the assessee has no income by way of stake money, the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly and exclusively for the purposes of maintaining race horses; (ii) in a case where the assessee has income by way of stake money, the amount by which such income falls short of the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of maintaining race horses; (b) "horse race" means a horse race upon which wagering or betting may be lawfully made; (c) "income by way of stake money" means the gross amount of prize money received on a race horse or race horses by the owner thereof on account of the horse or horses or any one or more of the horses winning or being placed second or in any lower position in horse races.] 8 [75. Losses of firms. —Where the assessee is a firm, any loss in relation to the assessment year commencing on or before the 1st day of April, 1992, which could not be set off against any other income of the firm and which had been apportioned to a partner of the firm but could not be set off by such partner prior to the assessment year commencing on the 1st day of April, 1993, then, such loss shall be allowed to be set off against the income of the firm subject to the condition that the partner continues in the said firm and to be carried forward for set off under sections 70, 71, 72, 73, 74 and 74A.] 1. Sub-section (3) omitted by Act 20 of 2002, s. 29 (w.e.f. 1-4-2003). 2. Ins. by Act 16 of 1972, s. 11 (w.e.f. 1-4-1972). 3. Sub-sections (1) and (2) omitted by Act 23 of 1986, s. 16 (w.e.f. 1-4-1987). 4. Ins. by Act 20 of 1974, s. 6 (w.e.f. 1-4-1975). 5. The words "Where for any assessment year" omitted by Act 23 of 1986, s. 16 (w.e.f. 1-4-1987). 6. Subs. by s. 16, ibid ., for certain words (w.e.f. 1-4-1987). 7. Subs. by s. 16, ibid ., for "from the source specified in clause (c) of sub-section (2)" (w.e.f. 1-4-1987). 8. Subs. by Act 18 of 1992, s. 39, for sections 75, 76 and 77 (w.e.f. 1-4-1993). Earlier amended by Act 20 of 1974, s. 13 (w.e.f 1-4-1975), Act 11 of 1987, s. 74 (w.e.f. 1-4-1988), omitted by Act 4 of 1988, s. 19 (w.e.f. 1-4-1989) and restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989).