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Cash payment for the purchase of depreciable asset

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(Querist)
09 October 2009 Dear Sir

If we make payment above Rs. 20000/- in cash for the purchase of fixed asset, then whether provisions of Section 40A (3)are attracted or not?

If it attract then which amount will be disallowed ? & why?
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Shyam Lal Naik

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Shyam Lal Naik (Expert)
09 October 2009 Since it is a payment for capital expenditure, there is no question of any dis allowance.
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C A Anjani Kumar mundhra

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C A Anjani Kumar mundhra (Expert)
09 October 2009 section 40A(3) does not attract
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CA Suresh Choudhary

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CA Suresh Choudhary (Expert)
09 October 2009 agree with experts
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chetan soni

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chetan soni (Expert)
09 October 2009 but the depreciation is booked as expenses. Hence this amount to indirect booking of cash expenses above 20K. Hence the depreciation on such asset will be disallowed u/s 40A(3).

Its my opinion.
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Nazir

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Nazir (Expert)
09 October 2009 agreed with Chetan.. exactly..
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Shyam Lal Naik

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Shyam Lal Naik (Expert)
10 October 2009 Beg to disagree that depreciation will be disallowed.

Depreciation is neither an expense or expenditure. It is an allowance.

The captioned section is not applicable to an allowance.
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
10 October 2009 40A(3) not applicable on assets purchased
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Ratan Sharma

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Ratan Sharma (Expert)
10 October 2009 Sec. 40A(3) not applicable.
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Ashraf Valappil

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Ashraf Valappil (Expert)
13 October 2009 40A(3) not applicable. pls do not connfuse students
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