EXPENDITURE INCURRED ON ANIMAL DURING THEIR PREGNANCY WILL BE TREATED AS COST OF ACQUISITION OF OFFSPRING OF ANIMAL.

The court held that the amount spent by the asseessee on the maintenance of the horse during the pregnancy period was really for protecting, preserving and keeping the horse in good health so that healthy offsprings are born. The maintenance expenses on horse during the pregnancy period are in fact to bring into existence offsprings and therefore can be regarded as cost of acquisition of offsprings. The court also held that these animals are superior and valuable than untrained animals. Therefore, the training expenses would constitute cost of improvement of capital assets.

Madras HC in CIT Vs Ramaswamy Mudaliar.