Reg: impact of treating revenue exp as capital exp
This query is : Resolved
02 August 2018
Dear All
Software subscription charges paid annually was mistakenly capitalised in FY 2016-17. Subsequently it was realised that it is a revenue exp. On process of rectification the capital exp was written off. Whether this will lead to Section 37(1) disallowance.
Kindly clarify refering to the relevant section of IT Act
Software subscription charges paid annually was mistakenly capitalised in FY 2016-17. Subsequently it was realised that it is a revenue exp. On process of rectification the capital exp was written off. Whether this will lead to Section 37(1) disallowance.
Kindly clarify refering to the relevant section of IT Act
03 August 2018
No disallowance can be made as it is incurred wholly, necessarily and exclusively for the purpose of business and very well covered u/s 37. Claim can be made by revising the return with in prescribed time .
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