Disallowance u/s 40A(3)

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Chinmay Desai (Querist)

11 December 2009 If a fixed asset is purchased for a one time cash payment exceeding the limit of above section then should depre on such asset be disallowed u/s 40A(3)?cause provision says that no deduction on such expenditure will be allowed & depre is just a form deferment of such deduction

Ram Avtar Singh

Ram Avtar Singh (Expert)

12 December 2009 Dear sir
yoy have mentioned in you question

u/s 40A(3)?cause provision says that no deduction on such expenditure will be allowed

Then Fixed Assets Not Expenditure. it not com under purview of sec40A(3)

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

12 December 2009 agree. and as per my Concern, you have Purchased a fixed assets by cash that means you have done capital expenditure so disallowed expenditure.

Chinmay Desai

Chinmay Desai (Querist)

12 December 2009 Mr.Singh,
But in rhe form of Depreciation you are charging it P&l.There is deferral of such
deduction.Purchase of FA is a capital expenditure & provision is not specifically to Revenue items only

Sarveshwar Lahoty

Sarveshwar Lahoty (Expert)

14 December 2009 We can purchase Fixed Assets for any amount in cash. Sex0A (3) is not applicable for purchase of Fixed Assets. Depreciation will be allowed.

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