16 April 2008
Assessee purchased DVD writer for Rs.1450/- for upgradation in technology by repalcing old CD Writer whether it is capital / revenue exp? Also he upgraded Tally 7.2 software to Tally 9 whether this is cap or revenue exp
16 April 2008
both are revenue in the nature. Coz its only upgradation or replacement and nothing new establishment.
If you purchase a hardware (Not replacement) without which your system will not work and the cost of such hardware is more then 5000 then only you have to capitalize the same.
yeh, you are correct in the case of AC, the capacity should be increased from the first installed capacity. and in case of ac the capacity is increasing by more then 100%. but in the case of CD and DVD player there is change in technology and not the increase in capacity. the capacity of overall computer should be increased and that can be increased by changing the motherboard, RAM and processor only. moreover the difference can not be taken as capital expenses, yeah if you want to capitalize it even the cost is less then 5000, you can, but you should capitalize it by the full amount and not by difference. In my opinion you should not capitalize the DVD Player. **DM
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