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2014 (7) TMI 840 - AT - Income TaxOne time vehicle tax paid on purchase of vehicle - Capital or revenue expenditure - eligible for deduction u/s 37(1) or depreciation u/s 32 – Held that:- The assessee has been guided by the law as it stood prior to its amendment in 1995, misled itself - the amendment/s has the effect of altering the nature of the levy in-as-much as the pre-amended tax could be regarded as an annual charge for the user of the vehicle for one year at a time - the levy of tax is towards the use of the vehicle in-as-much as it makes the registered owner (of the vehicle) liable to interest and the user of the vehicle as subject to the payment of tax and interest, making the vehicle liable to seizure - Tax is chargeable even if the vehicle is kept for use, so that it becomes due and, thus, liable to be recovered, even where the vehicle is not actually used or used even for a single day - Interest is a compensatory levy, for which a reasonable period of 30 days has been allowed for the payment of tax without interest - the tax levied by the Act would form part of the actual cost of the motor car, a capital asset, on which the same is levied, and exigible to depreciation as a part to the actual cost – the order of the CIT(A) is upheld- Decided against Assessee.
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