2007 (6) TMI 150

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.... and circumstances of the case, the Tribunal was right in holding that excise duty and sales tax do not form part of the turnover, for the purpose of calculation of deduction u/s 80HHC? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that additional liability on account of purchase of plant and machinery, which arose due exchange fluctuation has to be treated as revenue expenditure? 2. T.C.(A) Nos.830 and 831 of 2007 are filed under Section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income Tax Appellate Tribunal, Bench "C", Chennai in I.T.A. Nos.1673 & 1674/Mds/03 dated 23.11.2005 for the assessment years 1997-98 and 1998-99 respectively, raising the following su....

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....ax (Appeals).  The C.I.T.(A) held that the excise duty, sales tax and conversion charges are not includible in the total turnover for the purpose of Section 80HHC of the Act. Further, the C.I.T.(A) held that the additional liability on account of plant and machinery which arose due to exchange fluctuation has to be treated as revenue expenditure.  Aggrieved, the Revenue filed appeals to the Income-tax Appellate Tribunal ("Tribunal" in short).  The Tribunal dismissed the appeals and confirmed the orders of the C.I.T.(A).  Hence the present appeals by the Revenue. 4. Learned Standing Counsel appearing for the Revenue fairly stated that the issue in respect of Question No.1 in both the tax cases, stand covered by the Sup....