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Income Tax - Highlights / Catch Notes

Home Highlights January 2014 Year 2014 This

Capital or Revenue expenses – The number of entries for ...

Income Tax

January 19, 2014

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 nature - AT

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

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

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

  4. Nature of expenses - purchasing software licenses - revenue or capital expenditure - Fine tuning business operations to enable the management to run its business...

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

  6. Software consumable expenses – The expenditure was incurred for application software and not for system software – The software was not of enduring nature and would...

  7. Nature of purchase of software - software purchased by assessee for ultimate export either as embedded software or as part of project undertaken by it cannot be...

  8. Die tooling charges as revenue expenditure or capital expenditure - It was held to be revenue in nature since the expenditure were incurred for modernization of existing...

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

  10. Foreign travelling expenses incurred for purchase of Machinery from outside India cannot be treated as Capital Expenditure rather treated as Revenue Expenditure only for...

 

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