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Tally Installation Expense

Gurmet Siingh (Chartered Accountant) (413 Points)

14 February 2008

Hi,

A company has just upgraded its Tally Software from 7.2 to 9.2.

Should they capitalise this cost or take it as Computer expenses.

Cost- Rs.6300

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6 Replies

(Guest)

We have to capitalise the cost as the productive capacity increases.

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Srinivas Sharma KN (Tax Consultant) (292 Points)
Replied 14 February 2008

As per my knowledge, it should be charged off to revenue. Though upgradation increases productibity, as claimed by Sudhakar, we cannot capitalise.

Gurmet Siingh (Chartered Accountant) (413 Points)
Replied 14 February 2008

Any Sec. on this Case? What should i do-Capitalise or Charge to revenue?

(Guest)

INCOME TAX DOES NOT DEFINED CAP. OR REV EXPENDITURE. SINCE THESE EXPENSE ARE INCURRED AGAIN AND AGAIN AND YEAR TO YEAR AS NEED TO UPGRADE THESE ARE REVENUE EXPENDITURE.

M.Sriram Shenoy (CA Final) (814 Points)
Replied 14 February 2008

Such expenses can be capitalised depending upon the cost (i.e materiality), accounting policy of the company, enduring benefits and such other equal factors. Either which way, in my opinion, taking into consideration the amount of expenditure, it can be charged to revenue, despite it results in enduring benefit.