Verification of software-customisation expenditure is required...

Verification of software-customisation expenditure is required to establish its nature and source, accounting treatment, genuineness and eligibility for capitalisation as an intangible asset. Differences between book entries and assessment-stage documents alone do not resolve these questions; supporting books, invoices, agreements, ledgers, payment records and salary details require examination. Depreciation on any qualifying intangible asset follows consequentially. Assessment of income also requires comparison of the original and revised returns, return-processing intimation, computation, tax audit report and assessment order to determine whether expenses were already disallowed and whether duplication occurred. The disputed matters were restored for fresh examination after reasonable opportunity.