Additional Commissioner Of Income Tax vs Ge Capital Transportation Financial ... on 24 February, 2006
books of account as opening balance and the expenditure pertaining to Item
No. 29 to 56 pertain to the year of expenditure. It was his submission that
the expenditure pertains to the purchase of licences /packages of computer
programs which are application programmes/ upgrading the programs. He
referred to the details of the nature of expenditure stating that most of the
expenditure pertain to M/s. Windows XP Professional and Anti Virus
software, Office Win 32, Office 2003, etc. to submit that the nature of
expenditure is revenue only and not capital expenditure. Then he referred to
the findings of the Special Bench in the case of Amway India Enterprises
111 ITD 112 (Del) to submit that in order to examine the expenditure, as
held by the Special Bench, certain guidelines were framed and on the basis
of the functional test the expenditure was allowable as revenue expenditure.
He then referred to the decision of the Hon'ble Delhi High Court in the case
of CIT vs. G.E. Capital Services Ltd. 214 CTR 551 to submit that MS Office
software not being a customised software the expenditure incurred by the
assessee on purchase of computer software or regular upgradation is
revenue expenditure in nature.