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2012 (7) TMI 74 - AT - Income TaxSoftware expenses - revenue or capital expenditure - Held that:- What is required to be seen is the real intent and purpose of expenditure and whether the expenditure results in creation of fixed assets for the assessee. Expenditure which is incurred and which enables the profit making structure to work more efficiently leaving the source of profit making un-touched would be the expense in the nature of revenue expenditure. Therefore, expenditure incurred by the assessee on software is allowable as revenue expenditure. See CIT v. Asahi India Safety Glass Ltd (2011 (11) TMI 2 (HC))- Decided in favor of assessee. Since facts in the present case are identical with the facts of the case pertaining to A.Y. 2006-07, therefore following the order of earlier AY, royalty to M/s Honda Co. Ltd., Japan for providing technical know how, provision for warranty and sales services, cost of air ticket booked by the appellant for technicians and forming part of technical guidance PE, entry tax paid by the assessee under protest and provisional is allowed as revenue expenditure - in favor of assessee.
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