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Disallowed of payment

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(Querist)
08 March 2011 can anyone tell me if some one purchase tyres for the purpose of trucks for rs.30000/-in cash, whether it will be disallowed or not.?

or whether it will make any difference if the above is capitalize?
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Maninder Jain

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Maninder Jain (Expert)
10 March 2011 First I answer your second quarry:

Since changing the tyre is not effecting the previous efficeincy of the truck, you cant capitalise the tyre cost.

Second if you are computing your business profit u/s 44AE ie presumptive method, IT officer will not disallow cash expenses.

But if you are calculating business profit otherwise, Rs. 30000 single bill single payment will be dissallowed.

You should ask the tyre vendor to break the bill in two part su that each bill does not exceed Rs. 20000
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