Case Law Details
Issue: Whether expenditure on acquisition of software was revenue or capital expenditure?
Sections Involved: Section 37 (1) of the Income Tax Act (Capital expenditure is not allowed as per this section)
Appeal by Assessee before ITAT: (Relevant Extract)*
“1. That the Order dated March 23, 2007 passed by the learned Commissioner of Income Tax (Appeals)-XV [“CIT(A)”] is erroneous and bad in law in so far as it has confirmed the additions/disallowances made in the assessment order
2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance of expenses incurred on purchase of software for updating the existing data processing system of the appellant company amounting to Rs. 23,28,270/- considering the same as capital expenditure.
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