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Capitalization

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(Querist)
06 June 2010 Please clarify whether the expenditures as detailed below can be capitalized?
1. Tally software purchased
2. Additional stabilizers purchased for A/C units
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Rahul

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Rahul (Expert)
06 June 2010 1. Tally software purchased will be capitalised.

2. Additional stablisers will also be capitalised as per ASI 2.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
10 June 2010 Tally is an application software .Therefore, purchase of application software though results in enduring benefit,the same cannot work on a stand alone basis. It is to be fitted into a computer system where system software is already in place. Thus, application software merely enhanced the productivity or efficiency of the business and has to be treated as REVENUE EXPENDITURE.
Citation:-
IBM India Ltd Vs. CIT (2007) 105 ITD (Bang).
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