Judgment :- R. JAYASIMHA BABU, J. The Tribunal has found the horses maintained by the assessee were intended for races and the expenditure incurred on them was to make those horses quite fit and ready for races notwithstanding whether they ran in the races or not. It has also held that the participation of those horses in the race in the previous year relevant to the assessment year is not a pre-condition for claiming the expenditure that had been incurred on those horses as a loss for that year. We do not find any error in the reasoning of the Tribunal. The Explanation to section 74A(3) of the Income-tax Act refers to maintenance of race horses. If the horses are maintained for the purpose of racing, the requirement of section 74A(3) of the Income-tax Act is fully met. Further requirement that such horses should have participated in the races in the year relevant to the assessment year cannot be read into the section. There is no dispute that the horses were maintained for participation in the races and as such the expenditure incurred on the maintenance would be covered by the provisions of section 74A(3) of the Income-tax Act which is a revenue expenditure. The question referred to us is answered in favour of the assessee and against the Revenue. No costs.