BHARATI SAPRU, J. - (1.) HEARD learned counsel for the Revenue, Sri R.K. Upadhyaya and Sri Shubham Agrawal, learned counsel appearing on behalf of the assessee.
(2.) THIS is a reference under s. 256(1) of the IT Act, 1961. Two questions have been referred for the opinion of this Court. The first question is at the instance of the Revenue which is given below : "Whether the Tribunal is legally correct in permitting the assessee to change its method of accounting in respect of bottles and crates and in coming to the conclusion that 'bottles and crates' constitute 'plant' totally disregarding the past practice of the assessee in regard to these items - The second question is at the instance of the assessee, which is as under : "Whether the Tribunal is legally correct in holding that the bottles and crates in the assessee's case do not constitute its stock -in -trade and should be treated as 'plant' -
(3.) THE first question, which is at the instance of the Revenue is taken up. The facts of the case are. The assessee is a private limited company and filed its return of income for the asst. yr. 1979 -80 showing a net loss of Rs. 5,39,870. The assessment was completed by the AO under s. 143(3) on a net loss of Rs. 3,15,890 in 1982. The assessee claimed 100 per cent depreciation under s. 32(1)(ii) on bottles and crates treating these as 'plant' used in the business of manufacture of soft drinks run by the assessee company. In the assessment proceedings, the claim of the assessee was negatived on the ground that the assessee company all along in the past had been treating the bottles and crates as stock -in -trade.;