Assessee was engaged in business of software development solution and management. It incurred expenditure in connection with development of a new software product and treated expenditure as a part of capital work in progress for assessment years 2004-05 to 2007-08 and new product never came into existence and same was abandoned and assessee then claimed whole capital work in progress as revenue expenditure in assessment years 2006-07 and 2007-08. The Assessing Officer held that expenditure incurred was capital in nature and disallowed same. Commissioner (Appeals) held that expenditure had to be allowed as a revenue expenditure in year in which product was abandoned. Tribunal upheld view expressed by Commissioner (Appeals). On appeal by the Revenue the Court held that the assessee incurred expenditure in connection with development of a new software and treated expenditure as a part of capital work in progress and new product never came into existence and same was abandoned and assessee then claimed whole capital work in progress as revenue expenditure, as no new asset came into existence, expenditure could only be said to be revenue in nature. Order of the Tribunal is affirmed. (AY. 2006-07, 2007-08)