Software expenditure treated as revenue where MS Office required frequent upgradation and did not create an enduring asset.

Software expenditure on MS Office was treated as revenue, not capital, because the software was not customised for the assessee and required frequent technological upgradation. In those circumstances, the outlay did not create an asset of enduring nature. The Tribunal's finding that the expenditure was not capital in nature was upheld, and no substantial question of law arose.

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Issues: Whether expenditure incurred on software, namely MS Office, was capital expenditure on the ground of enduring nature, or revenue expenditure in view of the need for regular technological upgradation.

Analysis: The software in question was not customised for the assessee and was known to require frequent upgradation. In such circumstances, the expenditure could not be treated as giving rise to an asset of enduring nature. The Tribunal's view that the software expenditure was not capital in nature disclosed no error.

Conclusion: The expenditure was rightly held not to be capital expenditure, and no substantial question of law arose.

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