(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The revenue has come up on appeal against the common order of the Income Tax Appellate Tribunal, Madras 'D' Bench, dated 17.2.2006 passed in I.T.A.Nos.1032 and 1033/Mds/2005 in respect of the assessment years 1994-95 and 1997-98 by formulating the following common substantial questions of law:
"1. Whether the replacement of machinery parts will amount to revenue expenditure or not?
2. Whether bringing into existence of a new asset or obtaining a new advantage would amount to revenue expenditure or not?"
2. The Tribunal in these cases followed the Division Bench judgment of this Court in Commissioner of Income-tax Vs. Janaki Ram Mills Limited reported in 275 ITR 403.
3. Admittedly, when the matter was taken on appeal to the Supreme Court, the Supreme Court, without expressing any opinion on merits, remanded the matter to the Commissioner - Appeals to decide the matter uninfluenced by the decision of the Madras High Court in Janaki Ram Mills by giving certain directions in Ramraju Surgical Cotton Mills reported in (2007) 294 ITR 328. Subsequently also, the Supreme Court in its order dated 3.11.2009 made in Civil Appeal No.7297 of 2009 arising out of S.L.P.(Civil) No.2037 of 2009 in the case of COMMISSIONER OF INCOME-TAX, COIMBATORE VS. M/S.HINDUSTAN TEXTILES remitted the matter by observing as follows:
"The narrow controversy is whether, on facts and circumstances of this case, the respondent (assessee herein) was not entitled to deduction in view of the law laid down in the judgment of the Division Bench of this Court in the case of Commissioner of Income Tax vs. Sri Mangayarkarasi Mills Private Limited, reported in (2009) 315 I.T.R. 114?
According to the learned counsel appearing on behalf of the assessee, the judgement of this Court in the case of Sri Mangayarkarasi Mills Private Limited (supra) does not lay down the law across the board and that the said judgement has to be seen in the facts of each case. We express no opinion on the said submission. Accordingly, we remit this matter to the High Court for de novo consideration in the light of the judgement in the case of Sri Mangayarkarasi Mills Private Limited (supra), which has been delivered only on 21st July, 2009. The High Court would also consider the tests laid down by this Court in the case of Commissioner of Income Tax vs. Saravana Spinning Mills Private Limited reported in (2007) 293 I.T.R. 201 and Commissioner of Income Tax Vs. Ramaraju Surgical Cotton Mills, reported in (2007) 294 I.T.R. 328, while disposing of this case on merits. We express no opinion on merits.
Subject to what is stated herein, the appeal is allowed with no order as to costs."
4. Therefore, following the above judgment, at the consent of the counsel on either side, the matter is remitted back to the Commissioner of Income-tax (Appeals) to do the exercise as directed by the Supreme Court in the above said judgement (294 ITR 328). The appeals are disposed of accordingly. Consequently, the connected miscellaneous petitions are closed.
usk Copy to:
1.The Income-tax Appellate Tribunal, Madras D Bench, Chennai
2. The Commissioner of Income Tax (Appeals)-1 Coimbatore.
3.The Asst.Commissioner of Income-tax Company Circle-I, Coimbatore