Asstt. CIT v. Maersk India (P) Ltd.

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The Tax Publishers2016 TaxPub(DT) 2290 (Mum-Trib) : (2016) 071 (II) ITCL 0008 ACIT v. Maersk India (P) Ltd. INCOME TAX ACT, 1961 --Capital or revenue expenditure--Software expensesEnduring benefit--Assessee was engaged in business of shipping agent/container freight station owner and operator. AO declined assessee's claim of software expenses by treating same as capital in nature. *Held:* In the case of Raychem RPG Ltd. 346 ITR 138, wherein it was held that softwares facilitate assessee's trading operations or enables the management to conduct assessee's business more efficiently or more profitably but it is not in the nature of profit-making apparatus. Therefore, expenditure on software was to be allowed. In the instant case also, assessee was in the business of shipping agent, software was used to facilitate assessee's business of shipping, therefore, there was no reason to treat the expenditure on software as capital in nature. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 2290 (Mum-Trib) : (2016) 071 (II) ITCL 0008

ACIT v. Maersk India (P) Ltd.

INCOME TAX ACT, 1961

--Capital or revenue expenditure--Software expensesEnduring benefit--Assessee was engaged in business of shipping agent/container freight station owner and operator. AO declined assessee's claim of software expenses by treating same as capital in nature. Held: In the case of Raychem RPG Ltd. 346 ITR 138, wherein it was held that softwares facilitate assessee's trading operations or enables the management to conduct assessee's business more efficiently or more profitably but it is not in the nature of profit-making apparatus. Therefore, expenditure on software was to be allowed. In the instant case also, assessee was in the business of shipping agent, software was used to facilitate assessee's business of shipping, therefore, there was no reason to treat the expenditure on software as capital in nature.