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Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters Excise duty and sales tax do not form part of turnover, for purpose of calculation of deduction under section 80HHC [A.Y 1997-98 to 1999-2000] In view of the Supreme Court's decision in CIT v. Lakshmi Machine Works [2007] 290 ITR 667, 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 under section 80HHC. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of Additional liability on account of purchase of plant and machinery, which arose due to exchange fluctuation, has to be treated as revenue expenditure [A.Y 1997-98 to 1999-2000] The assessee claimed a portion of additional liability on account of purchase of plant and machinery, which arose due to exchange fluctuation, as revenue expenditure. The Assessing Officer disallowed the same and treated the additional liability as capital expenditure. The Tribunal upheld the assessee's claim. Held that the Tribunal was consistently following the issue in favour of the assessee for the earlier assessment years, by relying on the Court's in the case of Lakshmi Card Clothing Manufacturing Co. (P.) Ltd. v. CIT [1984] 149 ITR 716 . The revenue was unable to bring out any compelling reason to take a different view and also there was no detail as to whether the revenue had preferred any appeal against the earlier orders of the Tribunal or not. In view of the same, there was no error or legal infirmity in the orders of the Tribunal so as to warrant interference. JUDGMENT P.P.S. Janarthana Raja, J.-T.C.(A) No. 446 of 2007 is filed under section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income-tax Appellate Tribunal, Chennai Bench "C"in I.T.A. No. 1565/Mds./2004 dated April 21, 2006, for the assessment year 1999-2000, raising the following substantial questions of law: "1 . Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the excise duty and sales tax do not form part of the turnover, for the purpose of calculation of deduction under section 80HHC? 2. Whether, in the…

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