TaxTMI 
TaxTMI 
2023 (7) TMI 1443
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....f the Act for an amount of Rs.2,01,96,568/- incurred towards software license expenses by considering the same as Revenue expenditure. 2. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in considering the expenses incurred by the assessee on software License Fee as revenue expenditure instead of capital expenditure, without appreciating the fact that it is an "Intangible asset. The Income-tax act clearly categorizes the "License" as an intangible assets for claiming depreciation u/s 32 which is based on the ordinary meaning of the same." 3. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in not appreciating the fact that the assessee company has purchased this license ....
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....software. However, the AO has not agreed with the submission of the assessee and stated that similar addition was made in assessee's own case for assessment year 2016-17 and assessment year 2017-18 by treating the software license expenses of the nature of capital expenditure. Therefore, AO has disallowed the claim of software expenses and added to the total income of the assessee. 4. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) after following the decision of ITAT in the case of the assessee itself has allowed the claim of the assessee. 5. During the course of appellate proceedings before us, at the outset the ld. Counsel submitted that identical issue on similar fact has been adjudicated by the ITAT, Mu....
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.... the expenditure incurred for purchase of Windows XP Professional, is an application software, and therefore this expenditure would be revenue in nature and cannot be treated as capital in nature. We have perused the decision of the Coordinate Bench in the case of Boots Piramal Healthcare Ltd. (supra) and find that the Coordinate Bench has considered identical issue and held that the expenditure incurred for purchase of Windows, which is an application software, has to be allowed as revenue expenditure. At para 4 of its order the Coordinate Bench held as under: - "4. We have carefully perused the orders of authorities below. We find that the expenditure are incurred for the purchase of application software and therefore are revenue in na....
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....ase of Varinder Agro 22 DTR 127. 16. We have considered the issue. As seen from the nature of expenditure these were amounts paid for obtaining MS Windows 98 and MS Word 2000 software for its office use and not a new software purchased alongwith computer. Since the nature of expenditure is revenue, in line with the principles established by the above two decisions (supra) the software expenditures are to be held revenue in nature. The A.O. is directed to allow the same and withdraw the depreciation granted, if any. Ground is considered allowed." 8.3.3 Following the aforesaid decision of the Coordinate Bench of this Tribunal, in the case of Boots Piramal Healthcare Ltd. (supra) and Pennwalt Ltd. (supra) and following the tests laid dow....