19 March 2010
One of my client being an individual engaged in provision of services (i.e.Admission consultancy for Master degree courses through various B-Schools/Colleges.)In the very first year he incurred Rs.150000/- towards Web designing which is very essential for such type Business/profession.There after in every year Approx. Rs.40000 to 45000 will be incurred for upgradation/renewal charges.
How the same is to be treated in books in the very first year & subsequent years.(i.e. either asset or Deferred or revenue in nature.)
19 March 2010
Once you design a WEB PAGE you have been allocated with some space in the server for a certain period. It is not your asset. However you can amortise the total expenditure over the period of service to you. For eg 15 months then monthy 15000.
19 March 2010
Expenditure on development of website is a revenue expenditure. Citation:- CIT Vs Indian Visit.com Private Limited (2008) 219 CTR (Del) 603.
07 June 2011
For accounting issue please refer AS 26 and not income tax case or acts and as per AS 26 you can capitalize and amortise as per their life say in 3 or 5 years for 1st time development and the regular yearly expenses is a maintenance nature expenses debit this in to PL
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