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Income Tax - Highlights / Catch Notes

Home Highlights November 2013 Year 2013 This

Software consumable expenses – The expenditure was incurred for ...

Income Tax

November 4, 2013

Software consumable expenses – The expenditure was incurred for application software and not for system software – The software was not of enduring nature and would become obsolete - Therefore it is revenue expenditure - AT

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  1. Software expenses - revenue or capital expenditure - real intent and purpose - expenditure incurred by the assessee on software is allowable as revenue expenditure. - AT

  2. Expenses incurred on up-gradation of software do not result into acquisition of any asset nor acquisition of enduring benefits as software become obsolete very quickly -...

  3. Expenses incurred for replacing non-Y2K compliant computer with Y2K compliant computer - the expenditure was for replacement of a system within a larger system which is...

  4. Revenue expenditure versus capital expenditure - expenditure incurred on ERP Software – allowed as revenue expenditure - AT

  5. Capital or Revenue expenses – The number of entries for purchase of software tools is running into 170 - thus, the expenditure incurred by the assessee was revenue in...

  6. Software expenses - revenue v/s capital expenditure - software may be needed like raw material - computer software expenses were revenue in nature - HC

  7. Software development expenditure which was application software was revenue in nature - deduction allowed u/s 37.

  8. Media cost for import of software - Capital expenditure or revenue - Software used for duplication and licensing - expenses allowed as revenue expenditure - HC

  9. Nature of expenses - Expenses incurred on Enterprise Resource Planning (“ERP”) and software expenses - revenue or capital expenditure - in today’s fast changing...

  10. Disallowance of consultancy charges incurred on designing and implementation of TDS and other systems - nature of expenditure - it is quite clear that it is revenue...

 

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