Judgment :- K. Raviraja Pandian, J. By formulating the following two questions of law, the revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras B Bench, dated 14.02.2003 in ITA.No.1426(Mds)/93, 1267(Mds)/91 and 2203(Mds)/91. The relevant assessment year is 1990-91, 1988-89 and 1989-90. "1. Whether in the facts and circumstances of the case, the tribunal was right in holding that the assessee engaged in the manufacture is eligible for the beenfit of Section 80(P) (2)(a) in respect of interest received from members? 2. Whether in the facts and circumstances of the case, the Tribunal was right in allowing the replacement of independent machinery as revenue expenditure, when the machinery was erected after demolishing the old unit? 2. The facts as culled out from the statement of facts in the memorandum of grounds of appeal are as follows:- The assessee is a co.operative society running a sugar factory. For the Assessment years 1988-89, the assessee claimed expenditure including replacement of complete centrifugal machine unit, ECT crane unit and cane carrier including erection charges as maintenance expenditure. For the assessment years 1988-89, 1989-90 and 1990-91 the assessee claimed the benefit of Sec.80(P)(2) on interest earned from its members on advances/credit facilities. The assessing Officer disallowed the above claims. 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeals before the Commissioner of Income Tax (Appeals), who upheld the Assessing Officers orders on both the issues. The assessee filed a second appeal before the Income Tax Appellate Tribunal. The Tribunal held that the interest earned from members of the assessee co.operative society on advances/credit facilities provided to them would be eligible for deduction u/s 80(P)(2)(a)(i). The Tribunal further held that where the earlier centrifugal machine unit was demolished and a new unit installed in its place, and the ECT crane was brought in as a substitute of earlier manual machines, it is clearly a case of replacement, and accordingly allowed the appeal. The correctness of the said order is now questioned by the revenue in these appeals by formulating the above questions of law. 4. We have heard the argument of the counsel for the revenue and perused the material. 5. In respect of the first question, similar issue has been dealt with by this Court in the case of Pondicherry Co.operative Housing Society Limited reported in 188 ITR 671. 4. We have heard the argument of the counsel for the revenue and perused the material. 5. In respect of the first question, similar issue has been dealt with by this Court in the case of Pondicherry Co.operative Housing Society Limited reported in 188 ITR 671. The decision of this Court has been taken to the Supreme Court in a batch of appeals. The Supreme Court in the case of Commissioner of Income Tax vs. Ponni Sugars and Chemicals Limited reported in 306 ITR 392 has observed as follows:- "With regard to the question whether the assessee was entitled to exemption under Section 80P(2)(a)(i) of the Income Tax Act, 1961, in respect of interest received from the members of the society, we find that none of the authorities below, including the High Court, have examined the memorandum of association filed by Salem Co.operative Sugar Mills Ltd., Madurantakam Co.operative Sugar Mills Ltd., Ambur Co.operative Sugar Mills Ltd., Dharmapuri District Co.operative Sugar Mills Ltd., Vellore Co.operative Sugar Mills Ltd., Attur Agricultural Producers Co.operative Society Ltd., and Modern Engineers Constructions Co.operative Society Ltd. Under Section 80P(1), deduction in respect of income of co.operative societies is provided for. Under Section 80P(1), where the gross total income of a co.operative society includes any income referred to in sub-section (2) then the sums specified in sub-section (2) shall be deducted from the gross total income to arrive at the total income of the assessee society. In order to earn exemption under section 80P(2) a co.operative society must prove that it had engaged itself in carrying on any of the several businesses referred to in sub-section (2). In that connection, it is important to note that under sub-section (2), in the context of co.operative society, Parliament has stipulated that the society must be engaged in carrying on the business of banking or providing credit facilities to its members. Therefore, in each case, the Tribunal was required to examine the memorandum of association, the articles of association, the return of income filed with the department, the status of business indicated in such returns etc. This exercise had not been undertaken at all". 6. By observing so, after setting aside the Judgment of this Court, the Supreme Court remitted the matter back to the Tribunal for de nova consideration in accordance with the observations made by the Supreme Court, in order to grant exemption under section 80P(2)(a)(i). 7. This exercise had not been undertaken at all". 6. By observing so, after setting aside the Judgment of this Court, the Supreme Court remitted the matter back to the Tribunal for de nova consideration in accordance with the observations made by the Supreme Court, in order to grant exemption under section 80P(2)(a)(i). 7. In the case on hand also, these details are not available Hence, for the purpose of deciding the question of law referred to above, we are of the opinion that the exercise indicated by the Supreme Court has to be done by the Tribunal. Hence the order of the Tribunal in respect of that question of law is hereby set aside. The matter is remitted back to the Tribunal for re-consideration as per the direction of the Supreme Court in the case of Ponni Sugars reported in 306 ITR 392. 8. In respect of the second question of law, the Tribunal has reproduced the finding recorded by the Commissioner of Income Tax (Appeals) to the effect that the earlier centrifugal machine unit was demolished and in its place a new unit was installed. It is clearly a case of replacement. ECT crane unit and crane carrier unit apparently were brought in in substitution of earlier manual or other primitive method of movement of goods or manufacturing process. What the Crane does is to lift sugar from one place and move it to other place. But there is no evidence as to whether in such process any increase in the production capacity. 9. In the decision of the Supreme Court in the case of Commissioner of Income Tax vs.Ramaraju Surgical Cotton Mills reported in 294 ITR 328, 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. 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. Hence, for the purpose of finding out whether there is any increase in the manufacturing capacity, the matter was remitted back to the Commissioner of Appeals. In this case also no such finding was recorded in the orders of authorities below. 10. Following that, in this case also, as the materials are not available, the order of the Tribunal to that extent is also set aside and the matter is remitted back to the Commissioner of Appeals to decide the issue as directed by the Supreme Court in the case of Commissioner of Income Tax vs.Ramaraju Surgical Cotton Mills reported in 294 ITR 328. The appeals are disposed of accordingly. No costs.