GOVINDAN NAIR C. J.

The following two questions have been referred under s. 256(1) of the I.T. Act, 1961

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the losses incurred by the assessee in the assessment years 1963-64 to 1966-67 in the maintenance of horses and in horse racing are referable to the head. Other sources and that these should be set off against income from other heads of income ?

2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the surplus from the sale of plots of land arising in the assessment years 1965-66 and 1966-67 was not includible in the income as profits from an adventure in the nature of trade or any other kind of business?" *

The assessee was assessed as an individual and his source of income over the years included salary, income from property, etc. He owns bangalow at Vepery, Madras, and resides therein. He also owns race horses which are entered for various races and sent to stud on occasions. There were two disputes relating to the assessment for the assessment years 1963-64 to 1966-67. One of them related to loss