Capitalization
This query is : Resolved
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
1. Tally software purchased
2. Additional stabilizers purchased for A/C units
06 June 2010
1. Tally software purchased will be capitalised.
2. Additional stablisers will also be capitalised as per ASI 2.
2. Additional stablisers will also be capitalised as per ASI 2.
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).
Citation:-
IBM India Ltd Vs. CIT (2007) 105 ITD (Bang).
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