24 September 2013
1)Disallowed under income tax act
2)Allowed because it is not expenditure,,moreover cash purchase of assets will not come under purview of 40A(3)
3)Depreciation is allowance,,no disallowance on depreciation under any case by virtue of 40A(3)
4)yes DSC Compulsory for taxaudit cases,,he need to engage CA and approve CA and he need to approve tax audit report uploaded by his tax auditor,,for all this it is mandatory to have DSC
24 September 2013
Thanks for your prompt reply but i m talking about dsc of assesee so tell me about that? i know k dsc of ca is compulsory in case of tax audit.
24 September 2013
As per taxmann vinod singhaniya direct tax ready reckoner , in that it is clearly mention that any cash purchase of fixed asset exceeding 20000 rs. then depre. on that is disallowed and u said that it is allowed so tell me whether it is your openion or u have any back up to support your answer?
24 September 2013
depreciation is allowed as section 40a(3) is related with revenue expenditure and not the capital expenditure. Depreciation is related to fixed asset so it has no direct nexus with section 40(a)(3)
24 September 2013
with regards to applicability of 40A(3) to depreciation, please note that in the case of Pandyan Insurance Co. Ltd. reported in 55 ITR 716, Supreme Court held that depreciation is not ‘expenditure’. Therefore, depreciation cannot be disallowed u/s 40A(3). Further, this view is fortified by the recent judgment of Delhi ITAT in the case of SMS Demag Private Limited reported in 3 taxmann.com 37.
Now if depreciation is not an expenditure, it cannot be disallowed under 40A(3). Needless to say, tax authorities may take different view on this.
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