Appeals allowed, remitted to Commissioner for directions. High Court directed to consider tests in other cases.

The appeals were allowed, and the matter was remitted back to the Commissioner of Income-tax (Appeals) to follow the directions given by the Supreme Court. The High Court was directed to consider the tests laid down in other cases while disposing of the matter on merits. The appeals were disposed of with no order as to costs, and the connected miscellaneous petitions were closed.

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Issues involved: Appeal against the order of the Income Tax Appellate Tribunal regarding assessment years 1994-95 and 1997-98.

Issue 1: Replacement of machinery parts - Revenue expenditure or notRs.
The Tribunal followed the Division Bench judgment in Commissioner of Income-tax Vs. Janaki Ram Mills Limited. The Supreme Court remanded the matter to the Commissioner - Appeals to decide uninfluenced by the Janaki Ram Mills decision, giving directions in Ramraju Surgical Cotton Mills. The Supreme Court in another case remitted the matter for de novo consideration in light of the judgment in Sri Mangayarkarasi Mills Private Limited, stating that the judgment does not lay down the law across the board. The High Court was directed to consider the tests laid down in other cases while disposing of the matter on merits.

Issue 2: Bringing into existence of a new asset - Revenue expenditure or notRs.
The Supreme Court remitted the matter for de novo consideration in light of the judgment in Sri Mangayarkarasi Mills Private Limited, stating that the judgment does not lay down the law across the board. The High Court was directed to consider the tests laid down in other cases while disposing of the matter on merits.

In conclusion, the appeals were allowed with no order as to costs, and the matter was remitted back to the Commissioner of Income-tax (Appeals) to follow the directions given by the Supreme Court. The appeals were disposed of accordingly, and the connected miscellaneous petitions were closed.

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