Reg: impact of treating revenue exp as capital exp

This query is : Resolved

Deeptha Srinivasa Ragavan (Querist)
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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

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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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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