Ms office license purchased..capitalized or expense out???

AS 12801 views 20 replies

My company acquired 10 MS office 2013 licence..

Pl suggest whether this expense need to be capitalized or to be considered as revenue expenses.

 

Thanks in Advance.. 

Replies (20)
This will be capitalized as an intagible asset.

Hi,

 

Since it is packaged software you can expense off in same year.

 

Thanks//VaibhaJ

Dear Ajay sir,


the same would be included in Computer software and eligible for 60% depreciation for the year, as its a computer program for the assessee.

 

 

Best Regards,
CA Lovely Arora
Lovely Arora and Associates
ca.lovelyarora @ gmail.com

Such puschase is due to frequent update of software & is a revenue expenditure. There is a care law assenting above inference.
As per the circular issued by cbtd any software purchased is to be treated as royality paid nd the same should be shown as an expense
Software purchase should be treated as revenue exps.
Agree with Jai Singh.

Dear Jai,

Kindly tell,

1) circular No.?????

2) and in what cases it might be covered in Fixed Assets then???

 

Kindly refer this case also:- https://taxindia.pz10.com/2013/05/payments-for-purchase-of-software-not.html

Originally posted by : AJAY JAIN


My company acquired 10 MS office 2013 licence..

Pl suggest whether this expense need to be capitalized or to be considered as revenue expenses.

 

 

Thanks in Advance.. 

 

 

 

 

 

 

Expenditure would be booked as revenue expenditure as per a High Court Judgement.

If any Customization  is done to a software then it would be capitalized.  

 

Dear Nitesh sir,

kindly give the link for or name of such high court judgment for our reference....

 

 

Thanks in advance.


Originally posted by : CA LOVELY ARORA

Dear Nitesh sir,

kindly give the link for or name of such high court judgment for our reference....

 

 

Thanks in advance.

it was decided in case of  
CIT v. GE Capital services Ltd(2008) 300 ITR 420, decision by Delhi HC

Refer the link of case
CIT v. GE Capital services Ltd(2008) 300 ITR 420
for full clarification 
Link : 
https://indiankanoon.org/doc/1799975/
 

But Nitesh sir, after reading 4th and 5th point of the case referred by you, it could be interpreted that the treatment for the same depends on the case to case basis. If the expenditure is on customized asset i.e. MS office is customized according to the need of the assessee, then the same could be treated as capital asset and dep. would be charged on the same... and i took that the query in this case is in regards to customized MS office only, as asked that "the company purchased license for MS office", which one normally interprets that for being used in customizing... otherwise why one will purchase license for that..

Dear Lovely arora sir
In my view , Licensed Office software doesn't mean a customised  Software.
 


CCI Pro

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