THE COMMISSIONER OF INCOME-TAX, WEST BENGAL vs ROYAL CALCUTTA TURF CLUB

The Supreme Court ruled that under Section 10(2)(XV) of the Indian Income Tax Act, 1922, expenditures incurred to prevent the extinction of a business are allowable deductions. The Court held that the respondent's expenditure on training Indian boys as jockeys was wholly and exclusively laid out for the purpose of its business, as the availability of skilled jockeys was essential for the commercial viability of race meetings. The appeal by the Commissioner was dismissed, affirming the High Court's decision in favor of the respondent.