Cash purchase of assets morethan rs 20000

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CA Harish Singh (Querist)
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13 September 2012 If an assessee purchases depreciable assets exceeding Rs 20000 in cash, that expenditure would be disallowed by the income tax or not?
can we claim Depreciation on such assets?
If both of the above are disallowed,then what will be the effect at the time of sale of that asset(regarding ST/LT & COA)?
Please also provide us relevant section & case law (if any).

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 September 2012 Section 40A(3) will not attract to fixed assets. So no disallowence of depreciation.

OM SAI SRI SAI JAI JAI SAI

CA Harish Singh

CA Harish Singh (Querist)
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13 September 2012 Please refer Taxmann Direct Tax Readyrecknor for AY-2012-13 & 13-14, Para 49.3-2 point No-5, then reply.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 September 2012 We referred no of author books and recknors in this regards because on of our client same problem arises we sure about section 40A(3) not applicable to fixed assets but one day we saw taxman recknor in it contains section 40A(3) applies to fixed assets we maight be in doubt but we already told to our client it's not applicable and purchase he purchased so we refer another authors books it is cleared section 40A(3) doesn't applicable to fixed assets. so i surly answered you.

However section 40A(3) specially indicates "expenditure" and specially clarified "This provision not apply in respect of expenditure for which no deduction is claimed,namely capital expenditure."

So it clarifies your doubt.

OM SAI SRI SAI JAI JAI SAI

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