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2014 (1) TMI 23 - AT - Income TaxEmployee Stock Option Plan expenses - Held that:- Following Biocon Limited Vs. DCIT(LTU), Bangalore [2013 (8) TMI 629 - ITAT BANGALORE] - The issue was set aside for fresh adjudication. Whether expenses on software are capital or revenue - Held that:- Following CIT Vs. Asahi India Safety Glass Ltd [2011 (11) TMI 2 - DELHI HIGH COURT] - Either the extent of the expense or the expense being incurred in close proximity, in the subsequent years, would not be conclusively determinative of its nature - The application software would have to be updated from time to time based on the requirements of the assessee in the context of the advancement of its business and/or its diversification, if any; the changes brought about due to statutory amendments by law or by professional bodies, which are given the responsibility of conceiving and formulating the accounting standards from time to time, and perhaps also, by reason of the fact that expenses may have to be incurred on account of corruption of the software due to unintended or intended ingress into the system, ought not give a colour to the expenditure incurred as one expended on capital account - The treatment of a particular expense or a provision in the books of account can never be conclusively determinative of the nature of the expense - The expenditure incurred by the assessee on account of software expenses was a revenue expenditure - The issue was restored for fresh adjudication.
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