TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 1052
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of software license fees. The assessee maintained that as per its accounting policy, these fees were treated as deferred revenue expenditure in the assessee's books. During the year, the assessee had incurred software license expenses of Rs. 67,04,692/-. Out of this, Rs. 22,64,231/- were actually debited in the books as software license fees and thus they were included in the total amount of Rs. 69,59,572/- and the balance amounts were debited in the books of account in the subsequent years. The entire expenditure of Rs. 67,04,692/- had, though, been claimed during the year. The A.O., however, added back the amount of Rs. 69,59,572/-, disallowing the deduction of Rs. 67,04,692/-, included therein. The ld. CIT(A) allowed the expenditure,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pam & viruses. 2 First Advantage Corporation 70,648 April 2009 Software for protecting Microsoft email server from spam & viruses. 3 First Advantage Corporation 68,957 May 2009 Software for protecting Microsoft email server from spam & viruses. 4 First Advantage Corporation 70,064 June 2009 Software for protecting Microsoft email server from spam & viruses. 5 Relyon Software 2,000 April 2009 to March 2010 Updation of TDS software used for filing TDS returns. 6 Wipro Limited 65,617 1,619 01-07-2009 to 30-06-2010 Support service for maintenance of Sonic firewall (Chennai) 7 Wipro Limited 65,876 1,619 27-06-2009 to 30-06-2010 Support service for maintenance of Sonic firewall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the expenditure for the year under consideration, as follows:- Year Ended Amount 31st March, 2008 Rs. 27,91,692/- 31st March, 2009 Rs. 19,03,649/- 31st March, 2010 Rs. 22,64,231/- Total Rs. 69,59,572/- 7. During the year, the assessee had incurred total software license expenses of Rs. 67,04,692/-. A part of this amount, totaling Rs. 22,64,231/- was debited in the books of account as software license fees and this was included in the total amount of Rs. 69,59,572/-. The balance amount was debited in the books of account in the subsequent years. The total amount of Rs. 67,04,692/- was claimed as expenditure. There is no dispute that such accounting method has been followed by the assessee consistently. The A.O.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s a consequence of the acquisition of the license. In fact, it was either an antivirus software, or a software for filing TDS return or payments for support service for maintenance of firewalls, maintenance charges of Microsoft licenses, annual hosting fees, etc. Therefore, the nature of the software acquired is that of a revenue expense, the ld. CIT(A) has rightly held it to be so. 9. It is pertinent to note that the ld. CIT(A) capitalized the expense for software for indexing operations documents. In fact, this expenditure of Rs. 3,12,000/-, paid to M/s First Indian Corporation was a one-time cost, expended for the use of the software to over two years, fetching an enduring benefit to the assessee. The ld. CIT(A) added back this amount o....