[aaykarbhavan] ITAT follows AS-10 to include one-time vehicle tax in cost of vehicle treating it as capital expenditure

 

ITAT follows AS-10 to include one-time vehicle tax in cost of vehicle treating it as capital expenditure

August 9, 2014[2014] 48 taxmann.com 190 (Mumbai - Trib.)

IT : Para 20 of Accounting Standard (AS)10 Accounting for Fixed Assets requires that the cost of a fixed asset should comprise its purchase price and any attributable cost of bringing the asset to its working condition for its intended use. One-time tax for the life time of "all motor cars and omnibuses used or kept for use" in the State of Maharashtra under the Bombay Motor Vehicles Tax Act, 1958 is a tax for user, active or passive, of the motor vehicle in the territory of Maharashtra . Therefore, payment of tax, in-as-much as it only enables the vehicle being put to its intended use; in fact, represents a condition therefor, shall form part of its cost

Regards

Prarthana Jalan

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Posted by: Prarthana Jalan <prarthanajalan@ymail.com>

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