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Cap and Rev exp

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(Querist)
09 June 2009 if purchase software of Rs: 50000 in a compnay ,wheather we need to consider it as addtions to FA
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Radheyshyam Falod

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Radheyshyam Falod (Expert)
09 June 2009 Depends upon case to case. If one time cost and future benefit available then capital or if yearly then revenue
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
10 June 2009 No. In the following cases the expenditure on software was held to be of revenue nature for the main reason that acquisition of software merely enhanced productivity or efficiency and it gets obsolete in a short span of time and needs to be updated.
1)CIT Vs Southern Roadways Ltd (2008) 24(I)ITCL 118 (Mad).
2)IBM India Ltd Vs CIT (2007) 290 ITR (AT) 183(Bang-Tri).
3) CIT Vs G.E.Power Services India Ltd (2008) 23(I) ITCL 18(Del).
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