Quote from: sai prasad on March 16, 2011, 09:41:21 AM
Please give your opinion with supporting case law on the issue as to whether car lifetime tax,one time payment, is revenue expenditure. Sec.43B proivdes that any tax,duty and fee are deductible in the year of payment. Whether the above said tax is enduring nature and needs to be capitalised in the face of Sec.43B
An early response is welcome
This section in short, deals with certain types of payments and directs the taxpayer to claim such payments as an expense in the same assessment year when it was actually paid and not in the year in which the liability to pay such sum was incurred.
For example, Mr. Ram, owner of a logistics firm, has purchased a motorbike for rendering the courier services for his firm in August 2017. This purchase can be labeled as an actual expense/payment and pertains to the month of March 2017. For this, Mr. Ram can claim a deduction for the year ending March 2017 itself by showing a proof of this while filing his return in September 2017. If Mr. Ram pays this amount in October 2017, this deduction will be available for the year ending March 2018.
When filing the income tax returns, Mr. Ram can show the proof of making such payment and claim the deduction in the same year (in which the amount was accrued).