Cash paid for truck exceeding 20000

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CA Sahil Singla.. (Querist)

05 March 2011 SIr
The Co. Purchased a truck & remitted amount exceeding Rs. 20000 on a Single Day against one bill.please tell me whether such action on the part of Co. will lead to any Disalloance Under IT Act,1961 ?

Ram Avtar Singh

Ram Avtar Singh (Expert)

05 March 2011 Cash paid on Purchase of capital goods allowable.

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CA Sahil Singla..

CA Sahil Singla.. (Querist)

05 March 2011 Is th cash for capital goods always allowed ? according to me there must be special circumstances under wich such action can be taken...for e.g a bank holiday, or a distant place where it's not possible to settle transaction without cash payment...if cash is allowed for capital assets then there is no proper essence behind 40A (3)...the main motive of restricting cash transations by IT act is lost........

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

05 March 2011 You are right in asserting your opinion.

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)

11 March 2011 Hi,

Appreciate your view, however the Section is not applicable to Capital Goods as purchase of capital goods by cash or otherwise cannot be factored into to compute the Taxable Business Income.

Thank you,

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

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