Judgment :- K. Raviraja Pandian, J. 1. The revenue on appeal against the order of the Income Tax Appellate Tribunal Madras B Bench, Chennai dated 29.08.2006 passed in ITA. No. 1666/mds/1999 by formulating four questions of law. The first question of law is as follows:- “Whether in the facts and circumstances of the case, the Tribunal was right in holding that Sales Tax collection does not form part of the turnover, for the purpose of calculation of deduction u/s 80HHC?". 2. Since the first question of law has already been covered by the decision of the Supreme Court against the revenue in the case of Commissioner of Income Tax vs. Lakshmi Machine 2007 (290 ITR 667) wherein it has been held as follows : "Section 80HHC of the Income Tax Act, 1961, is a beneficial section: it was intended to provide incentive to promote exports. The intention was to exempt profits relatable to exports. Just as commission received by the assessee is relatable to exports and yet it cannot form part of turnover for the purposes of section 80HHC, excise duty and sales tax also cannot form part of turnover. Just as interest, commission, etc., do not emanate from the turnover so also excise duty and sales tax do not emanate from such turnover. Since excise duty and sales tax did not involve any such turnover such taxes had to be excluded. Commissions, interest, rent, etc., do yield profits, but they do not partake of the character of turnover and therefore they are not includible in the total turnover. If so, excise duty and sales tax also cannot form part of the total turnover under section 80HHC (3)". this Court admitted the appeals on the following substantial questions of law:- "1. Whether in the facts and circumstances of the case, the Tribunal was right in allowing a deduction of the amounts spent n replacement of machinery as revenue expenditure? 2. Whether in the facts and circumstances of the case, replacement of independent complete machinery can be treated as revenue expenditure? 3. Whether in the facts and circumstances of the case, the Tribunal was right in deciding the issue without going into the concept of Block of asset?” 3. 2. Whether in the facts and circumstances of the case, replacement of independent complete machinery can be treated as revenue expenditure? 3. Whether in the facts and circumstances of the case, the Tribunal was right in deciding the issue without going into the concept of Block of asset?” 3. It is submitted across the bar by the counsel appearing on either side that the above questions of law, are also covered by the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Ramaraju Surgical Cotton Mills reported in 294 ITR 328, wherein the Judgment of this Court in Commissioner of Income Tax (Appeals) vs. Janakiram Mills Limited reported in 275 ITR 430 was considered by the Supreme Court with reference to the contention of the assessee that replacement of assets without increasing the production capacity would amount to revenue expenditure. The Supreme Court remanded the matter by observing that there are a number of tests which are required to be considered while deciding whether the expenditure was revenue or capital in nature. In the absence of the requisite details regarding the production capacity remaining constant even after replacement, the matter could not be decided on merits and require to be remitted back to the Commissioner (Appeals) for consideration of that particular issue with reference to the production capacity. In this case also, there is no material available as to the increase or otherwise of the production capacity in replacement of the machineries. Without the factual details, the questions of law cannot be decided. Hence this case also requires to be remitted back to the Commissioner of Appeals as done by the Supreme Court in the aforesaid decision. 4. Hence, in respect of these questions of law, the order of the Tribunal is set aside and the matter is remitted back to the Commissioner of Appeals to redo the exercise as directed by the Supreme Court in the case of Commissioner of Income Tax vs. Ramaraju Surgical Cotton Mills reported in 294 ITR 328. With the above observations, the appeals are disposed of. No costs.