software upgrade and accounting treatment
This query is : Resolved
karunakar masapeta
(Querist)
29 January 2010
hi friends,
presently we are using focus 5.5 software for inventory and stores Mngt and now we are going to upgrade it focus 6.0 version and bought for Rs.55000
hence is it revenue exp or Capital
plz suggest me
presently we are using focus 5.5 software for inventory and stores Mngt and now we are going to upgrade it focus 6.0 version and bought for Rs.55000
hence is it revenue exp or Capital
plz suggest me
Kapil Arora
(Expert)
29 January 2010
As per AS 26, this expenditure are in nature of Intangible in nature hence it is intangible asset instead of treating as revenue expenditure nd writing off it to P&L a/c
30 January 2010
Citation :- CIT Vs. Southern Roadways Ltd (2008) 304 ITR 84 (Mad).
Findings :- The payment of such application soft ware, though there is an enduring benefit,does not result in acquisition of any capital asset and it merely enhances the productivity or efficiency and hence, has to be treated as REVENUE EXPENDITURE.
Findings :- The payment of such application soft ware, though there is an enduring benefit,does not result in acquisition of any capital asset and it merely enhances the productivity or efficiency and hence, has to be treated as REVENUE EXPENDITURE.
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