Per Shri T.V.K. Natarajachandran, Accountant Member - These appeals pertaining to the same assessee were heard together and disposed of together, as they involve common issue. Revenue is in appeal against the orders of the CIT (A)-II, Pune, for the assessment years 1985-86 and 1986- 87 while the assessee is in cross appeal for the assessment year 1986-87.

2. The common point Involved in these appeals is whether the stallions and mares used for breeding of race horses are to be regarded as plant for the purpose of claim of depreciation and investment allowance or not.

3. The assessee is carrying on the business of running a stud farm as in the past. It follows mercantile method of accounting and Samvat Year as the accounting year. Upto the assessment year 1984-85 the assessee considered all the horses as the stock-in-trade. For the assessment year 1985-86, the assessee considered the mares and the stallions used for breeding purposes as plant. Accordingly, the assessee transferred value of two stallions and 41 mares amounting to Rs. 24,69,812 out of the opening stock, to "plants account". The cost of one stallion purchased during the previous year Rs. 2,64,994 was also claimed as