Expenditure incurred on maintenance, back-up and support services to existing hardware and software is revenue in nature

Issue pertains to expenditure of Rs. 1.02 crores ( rounded off) expended by the assessee and whether the same should be treated as capital or revenue expenditure. For the assessment year 2008-09 the Assessing Officer noticed that the assessee had debited in the profit and loss account, amount of Rs. 1.02 crores (rounded off) towards software support and maintenance charges. Out of which, a sum of R. 97.75 lakhs pertained to software development and up gradation charges. The Assessing Officer was of the opinion that software development and up gradation would giv

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