Purchase of computer software

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Roshan Srivatsan

Roshan Srivatsan (Querist)
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04 April 2012 When a computer software is purchased, is it a revenue or capital expenditure?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 April 2012 http://www.taxmann.com/fileopener.aspx?stype=3&searchid=8701

Read the article from above link for details.

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Roshan Srivatsan

Roshan Srivatsan (Querist)
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04 April 2012 Ok thank you.

But i wanted to know one thing.

Is there any definite judgment whether it is a capital or revenue expenditure?

Does it always depend on circumstances of the case?

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CA Kishore Tallam

CA Kishore Tallam (Expert)
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04 April 2012 It always depends on circumstances of the case. For a normal company, software purchase can be capital expenditure. However, for a software company, it can be revenue expenditure.
Hence, it should be decided in case to case.

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