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TMI Blog2014 (7) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - I.T.A. No. 7238/Mum/2010 - - - Dated:- 14-7-2014 - Shri I. P. Bansal, JM And Shri Sanjay Arora, AM,JJ. For the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The one-time tax is in fact nothing but the net present value of the annual tax, discounted for the time factor. The Revenue s case, on the other hand, is that notwithstanding its imposition in the past, payment of tax under the law, as it now stands, is necessary for the user of the vehicle, i.e., irrespective of the extent or the period of the user. The law in the matter is clear and the user without payment of tax attracts penalty, besides interest. As such, it is a part of the cost of the motor car/s to the assessee, a capital asset/s in its hands, and would accordingly form part of its cost. 4. We have heard the parties, and perused the material on record. 4.1 Our first observation in the matter is that the motor cars, on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital asset to the assessee. Section 43(1) of the Act defines the term actual cost , as under: Definitions of certain terms relevant to income from profits and gains of business or profession. 43. In sections 28 to 41 and in this section, unless the context otherwise requires (1) actual cost means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority: Provided: .. The same, as evident, does so negatively, i.e., emphasizing the elements which would not form a part thereof, so that the principles of commercial accounting shall apply in determining the actual cost. The same is even otherwise trite law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of the cost of the asset. 4.3 The assessee has, in our view, in being guided by the law as it stood prior to its amendment in 1995, misled itself. What is relevant is the tax as levied, i.e., under the extant law, and not what it had been in the past. Two, it needs to be appreciated, as also observed during hearing itself, that the amendment has the effect of a change in the nature of the levy in-as-much as where levied on an annual basis, the same may be reasonably considered as a charge on or a levy for the use of the asset for a year. This would also meet the assessee s reliance on the decision in the case of Indian Molasses Co. (P.) Ltd. vs. CIT [1959] 37 ITR 66 (SC), whereby it stands held that the lump-sum payment in lieu of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle liable to seizure (s.12B). The nature of a levy is to be gathered from the preamble to the enactment, and the charging section, sec. 3 in the instant case, reproduced hereinbefore. Tax is chargeable under the said Act 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 charged for the non-payment of tax by a particular date, i.e., the 30th day of the tax becoming due. Interest is a compensatory levy, for which a reasonable period of 30 days has been allowed for the payment of tax without interest. To infer that, therefore, the Act allows user for 30 days without payment of tax, so that it is thus not a l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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