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2018 (9) TMI 1094 - HC - Income TaxAllowability of software expenditure - to be treated as a revenue expenditure OR capital expenditure - nature of the advantage in a commercial sense - Held that:- As held in Empire Jute Co. Ltd. v. CIT, [1980 (5) TMI 1 - SUPREME COURT] there may be cases where expenditure, even if incurred for obtaining advantage, of enduring benefit, may, none-the-less, be on revenue account and the test of enduring benefit may break down - what is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. We are inclined to accept the submission made by the assessee before the Tribunal that in view of the advanced technology software become obsolete within short intervals. Therefore, the Tribunal rightly applied the decision in the case of Southern Roadways Ltd. [2007 (6) TMI 193 - MADRAS HIGH COURT] - tribunal was right in holding that software expenditure is to be treated as a revenue expenditure - Decided in favour of assessee
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