We have purchased Tally @ Rs. 27000/-. Should we show it as an asset or as an indirect expense. Please give reference of a Supreme Court Judgement.
Piyush Verma (CA) (51 Points)
21 December 2012We have purchased Tally @ Rs. 27000/-. Should we show it as an asset or as an indirect expense. Please give reference of a Supreme Court Judgement.
Jayalakshmi Anshuman
(Chartered Accountant)
(69 Points)
Replied 21 December 2012
Purchase of software has to be accounted as intangible asset of fixed nature. It has to be amortised over a period not more than 10 years. In your case, it would be appropriate to amortise over a 5 year period. Please refer to ICAI accounting standard 26 for guidance. Supreme court judgment not required.
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 24 December 2012
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Purchase of tally software is revenue expenditure.,refer following case IBM India Ltd. v. CIT(A)-I |
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The assessing company acquired certain application software and claimed the same as revenue expenditure. The Assessing Officer how-ever disallowed the claim, treating it as a capital expenditure as it brought an enduring benefit. The CIT(A) upheld the disallowance. But on second appeal it was held :
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