Expenses incurred for the upkeep and maintenance of a race-course, including expenses for repairs, sand and murum, salaries and charges of employees, motor lorry expenses, stores and charges for maintenance of horses and bullocks, manure and garden expenses, spares of tractors and other machinery, wheel tax and water tax, and license fees, are deductible in the assessment of the rateable value of the race-course under Section 154 of the Bombay Municipal Corporation Act, 1888.

Judgement

SHELAT, J. :- This appeal by certificate obtained from the High Court at Bombay involves the question as to the true meaning of Section 154 of the Bombay Municipal Corporation AC, II of 1888 and the correct rateable value to be assessed thereunder.

2. The resident Club runs two race courses, one in Bombay and the other at Poona. We are concerned in this appeal with the Bombay race-course which is comprised of land and certain structures standing thereon. The said land is the property of the appellant-corporation given on lease to the C1ub for a period of 30 years commencing from June 1, 1944 at an annual rent of Rs. 3,75,000. The said structures thereon have been built by and belong to the Club. The Club has obtained a licence from the Government of Maharashtra permitting the Club to hold race-meetings at both the Courses and for which it paid a sum of Rs. 13 lacs for the relevant year. The Club distributed the said licence fees between the two Courses in the ratio of 2: l and thus share of the Bombay Course came to Rupees 8,66,666. The rating year in question is 1954-55. The assessment was made on the basis of the Club s accounts for the year 1953-54 that being the year concluded before the assessment. According to these accounts the gross receipts of the Club came to Rs. 117 1acs and odd and the expenses to Rs. 124 lace and odd; the accounts thus showed a loss of Rs. 7 lace and odd. The Deputy Municipal Commissioner who is the assessing authority disallowed expenses totalling Rs. 22 lacs and odd as having been wrongly included in the working expenses and determined Rs. 13,22,430 at the gross annual rent and deducting therefrom the 10 per cent deduction allowable under Sec. 154 of the Act assessed the net rateable value at Rs. 11,,90,187. The respondent-Club thereupon filed an appeal before the Small Cause Court, Bombay, under Section 217 of the Act. The Club claimed in all 19 items of expenses which according to it ought to have been allowed. The Club, however, conceded that items 1, 2, 4, 5, 15, 16 and 18 were rightly disallowed.The remaining items were :

3. Bombay Course upkeep and repairs

6. Track sand and murum

7. Legal charges

8. Licence fee

9. Totalisator upkeep and repairsf

10. Bombay Course salaries and wages

11. Motor lorry expenses

12. Grass and charges for maintenance of horses and bullocks

13. Insurance and garden expenses

14. Spares for tractors and machinery

l9. Painting.

3. Out of these, items 3, 9 and 19 were wholly disallowed by the Deputy Municipal Commissioner while the rest were partially allowed. As regards Item 19, that is, painting, Counsel for the Club stated before us that he would not press that item. We are therefore no longer concerned with that item. The Small Cause Court agreed with the Deputy Municipal Commissioner in totally disallowing expenses under Items 8 and 9. It allowed however item 7, that is, loyal charges which were disallowed by the Deputy Municipal Commissioner. Regarding Item 6, the view of the Small Cause Court was that only 7/12th and not 50 per cent deducted by the assessing authority ought to have been allowed. It was also of the view that only 7/12th and not 50 per cent of the expenses under Items 10, 11, 12, 13 and 14 ought to have been allowed by the assessing authority. As regards the licence fees the Club had, as aforesaid, allotted Rs. 8,66,666 to the Bombay Race Course. The Small Cause Court confirmed the deduction of 50 per cent only of this amount allowed by the assessing authority. So far as water tax and wheel tax were concerned the Small Cause Court confirmed the deduction of 3/4th of these taxes made by the authority. The Small Cause Court held that the profits basis method employed by the assessing authority was properly employed and further held that the Club had failed to prove that the net rateable value of Rs. 11,90,185 determined by the assessing authority was excessive.

4. Before the High Court the Club agitated the same objections. The High Court was of the v