Stock-breeding horses are excluded from "plant", so depreciation under the Income-tax Act is not allowable.

Horses used for stock-breeding are not treated as "plant" under section 43(3) of the Income-tax Act, 1961, because the statutory definition was retrospectively amended by the Finance Act, 1995 to exclude livestock from that expression. As a result, depreciation under section 32 is not allowable on such horses, even where they are used in the assessee's breeding business.

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Issues: Whether horses used for stock-breeding constitute "plant" eligible for depreciation under section 32 of the Income-tax Act, 1961.

Analysis: The reference arose in relation to assessment year 1978-79. The controversy turned on the meaning of "plant" under section 43(3) and its application to horses used in the assessee's breeding business. The statutory definition had been amended by the Finance Act, 1995 with retrospective effect from 1 April 1962 to exclude livestock from the ambit of "plant".

Conclusion: Horses used for stock-breeding do not constitute "plant" within section 43(3) of the Income-tax Act, 1961, and depreciation under section 32 is not allowable.

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