Capital Expenditure

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Aparna Raja K.C (Querist)
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18 July 2011 One of our Assesse have obtained a license.its a license for usage of certain software for its business.
Later it made some additional payments to extend the availability of software to one of its franchise.
now the issue is A.O. have asked the assesse to treat this extra payment as Capital Expenditure.
But.. wont it be a revenue expenditure?

CA Navin Jain

CA Navin Jain (Expert)
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18 July 2011 If additional payments is made to extend the availability of software for the future benefit then exp would be capitalized

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 July 2011 From the data available,it seems to me that additional expenses should be capitalized.

Aparna Raja K.C

Aparna Raja K.C (Querist)
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18 July 2011 Say,
initially .. for obtaining the license a sum was payed and it was capitalised. now this payment was made to get that software installed in just 1or 2 more computer(s) in one other branch.
Still recquried to capitalsie it?

Aparna Raja K.C

Aparna Raja K.C (Querist)
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18 July 2011 please do guide me with appropriate section(s) ...

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