gakruto.blogg.se

In the relevant clause, it was specifically mentioned that the software shall be procured, installed, maintained and upgrated form a source designated by the vehicle manufacturer. The Tribunal noted that as per dealership agreement the relevant clause was related to Data Processing System. The details of such charges incurred for various and if the expenses were of capital nature, the assessee need not have incurred such expenses on a recurring basis. It was also observed that amounts were recovered for usage of software year after year. The assessee had made similar payment in the subsequent years and the payments were made for the usage of the software and not for bringing into existence a capital asset. The Tribunal observed that rhe software was supplied by the Hundai Motors. The CIT(A) dismissed the appeal of the assessee holding that the expenses was not of revenue in nature and the assessee had received an enduring benefit. 147 of the Act by making a disallowance of the same after allowing depreciation on the expenses. The AO completed the assessment u/s 143(3) r.w.s. The assessee has debited profit and loss account with software support and maintenance expenses which was disallowed by the AO on the belief that the said expenses could not have been considered as revenue expenditure since there was an enduring benefit to the assessee. Subsequently, the assessment was reopened by issuance of notice u/s 148 of the Act. The assessment of the assessee was initially completed u/s 143(3) of the Income Tax Act, 1961 (the Act). The assessee was a sole proprietor engaged in the sales and service of Hyundai motor cars. The solitary issue in the instant case was whether software expenses namely Global Dealer Management System (GDMS) charges and debited in the profit and loss account as administrative expenses was to be treated as a revenue expenditure or capital expenditure? Software expenses on Global Dealers Management System of Hyundai motor held to be revenue in nature as it was a recurring expense for better efficiency of running business