- (1.) Delay condoned.
(2.) Leave granted.
(3.) Learned Counsel appearing for the respondent has brought to our notice the judgment passed by this Court in CIT v. Ramaraju Surgical Cotton Mills, 2007 294 ITR 328, wherein, in similar matters, this Court has held as under: There are a number of tests which are required to be considered while deciding whether the expenditure was revenue or capital in nature. A number of judgments have been cited before us in that regard. However, in the absence of the requisite details regarding the production capacity remaining constant even after replacement, the matter needs to be remitted to the Commissioner (Appeals). There is one more reason why we are inclined to remit the matter. As stated above, the impugned judgment of the Madras High Court in the case of Janakiram Mills Ltd, 2005 275 ITR 403 has been set aside by this Court as there was confusion between the tests to be applied in respect of Section 31 vis-a-vis the test to be applied in the case of Section 37 of the Income Tax Act. Without expressing any opinion on the merits of the case we remit the matter to the Commissioner (Appeals) who will decide the question in accordance with law. 6. Before concluding we may state that according to the department in the present case the assessee was not entitled to claim replacement expenditure as revenue expenditure as it was not incurred to replace an old worn out item of machinery; that on the contrary the old machine has been replaced by a new machine which constitutes an advantage of an enduring nature and therefore the expenditure was capital in nature. However, according to learned Counsel for the assessee the said test propounded on behalf of the department is no more applicable. We express no opinion on the aforestated contentions at this stage. It is for the Commissioner to decide the aforestated questions and contentions raised by the department as well as by the assessee. The Commissioner will decide the matter uninfluenced by any observations made in the impugned judgment of the High Court. Liberty to the parties to adduce additional evidences.;