40a(3)

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chithralejeesh (Querist)
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30 November 2013 Cash payment of an expenditure exceeding 20000 is disallowed . But what if we purchase fixed assets in cash ? in that case whether depreciation will be allowed or not ?

Ganeshbabu K

Ganeshbabu K (Expert)
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30 November 2013 Depreciation is not an expence it is allowance
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no problem to depreciation it is allowed.
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any cash expence more than 20K debit to p&l is disallowed as purchase of fixed asset will not hit p&l so it will be fine
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but it is not proper internal control measure to purchase assets in cash..make cheque payments mandatory if it is more than 20K..

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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30 November 2013 Dep will be allowed even if asset purchased in cash > 20,000.

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