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life time tax on vehicle-whether revenue

Started by sai prasad, March 17, 2008, 12:04:43 PM

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whether life time i.e.one time tax paid on car at the time of purchase is revenue exp. vis-a-vis sec.43B.whether is there any value addition due to one time tax payment to categorise it as capital exp.

it is revenue exp.
3 (75%)
there is no value addition by tax payment
1 (25%)

Total Members Voted: 4

sai prasad

llife time tax on cars is revenue in nature but the I.T.Dept is of the view that there is enduring advantage for long periiod and it isnot revenue in nature.

ashutosh majumdar

Firstly, there is no enduring "advantage" because all that the OTT does is to relieve you from recurring payments. Secondly, the so-called advantage is not in the capital field. So, applying the law laid down in Empire Jute 124 ITR 1 (SC), the expenditure is revenue in nature.

bhaskar rao

Is there chance that AO amy regard OTT as cost of acquisition of car because there is no option when you buy car you have to pay ott so it is part of the cost? I see risk of view like this being taken by AO.


I personally feel that expenditure on Life Tax should be capitalised and depreciation claimed thereon instead of treating the life tax as revenue expenditure. Raj


I share the same view as that of Sri Kanaraj, as it is advantageous and one can take the benefit of depreciation, which otherwise will go out of pocket for ever