TMI Blog2015 (6) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of profit-making apparatus. Therefore, expenditure on software is to be allowed as revenue expenditure. Hon ble Delhi High Court in the case of Asahi India Safety Glass Ltd. [ 2011 (11) TMI 2 - DELHI HIGH COURT] has held that software expenditure is incurred not to create new asset or a new source of income but to upgrade the system. Even the extent of expenditure is not a decisive factor in determining its nature. It was held that software expenditure so incurred is revenue in nature. We do not find any merit in the action of the lower authorities for treating software expenses as capital in nature. Accordingly, the AO is directed to allow software expenses as revenue expenditure. Disallowance of repairs and maintenance, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was not pressed by the ld. AR, therefore, the same is dismissed in limine. 4. We found that the assessee has paid Rs.58,760/- towards development of software, the same is revenue in nature. The expenditure of Rs.17,686/- was pad towards purchase of cartridges, which is essentially recurring in nature. Thus, there is no justification for disallowing such recurring expenses. Our view is also supported by the decision reported at 246 ITR 183 357 ITR 88. 5. The AO has also disallowed purchase of Microsoft SOL server, which is an off the shelf software like Microsoft Windows Xp, Window 2003, which used to store large number of files/data in a particular format. Disallowance was also made in respect of purchase of Arcserve software, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Bombay High Court and other High Courts as discussed above, we do not find any merit in the action of the lower authorities for treating software expenses as capital in nature. Accordingly, the AO is directed to allow software expenses as revenue expenditure. 9. The assessee is also aggrieved for disallowance of repairs and maintenance, renovation expenses by treating the same as capital. The assessee incurred following expenditure :- Sr.No. Particulars Amount(Rs.) (i) RAM purchased 22,100/- (ii) Hard Disk drive switch for computer 16,000/- (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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