JUDGMENT - Dr. B.P. SARAF, J.:---By this reference under section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this Court for opinion :

"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that horses used for stock-breeding constitute 'plant' so as to be eligible for depreciation under section 32 of the Income-tax Act, 1961?"

2.This reference pertains to assessment year 1978-79. The controversy is whether the horses used for stock-breeding constitute "Plant" for the purpose of depreciation under section 32 of the Income-tax Act, 1961 ("Act"). The material facts are in a narrow compass. The assessee is engaged in the business of live stock breeding. For that purpose, it purchases and imports horses. These horses are not sold. The assessee claimed that the horses having been used for the purposes of its business constituted "plant" and, therefore, depreciation was allowable on the cost thereof under section 32 of the Act. The Income-Tax Officer rejected the claim of the assessee on the ground that the horses were held by the assessee as stock-in-trade. The assessee app

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