RELATED TO section 40(A) 3

This query is : Resolved

anjali tripathi (Querist)
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12 November 2010 IS DEPRECIATION IN RESPECT OF ASSET ACQUIRED FOR RS. 100000 IN CASH IS ALLOWABLE WITH IN THE PERVIEW OF SECTION 40(A)3.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 November 2010 Yes because, as per my understanding, depreciation is an allowance and not an expense to be considered under section 40 A(3).

Tilak Agrawal

Tilak Agrawal (Expert)
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12 November 2010 Respected Warrier sir

Allowing Depreciation in the mentioned query would defeat the purpose of Section 40A (3).

Please Elaborate the difference between an allowance and expenses.

Regards
CA Tilak Agrawal

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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12 November 2010 Sir,
The amount paid for purchase of Capital Asset worth Rs.1,00,000/- is not the amount, that we are claiming expenses.

We are claiming depreciation on the Capital Assets that has been purchased, And not the purchase of asset itself perse.

There shall not be any disallowance atleast U/s 40A(3)

I expect other experts may not agree this view.......

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 November 2010 Tilak Ji & Madhusudhan Ji

As per my understanding the issue has to be viewed in a different prespective.

1. The crucial word used in section 40A(3)is "expenses".

2. Whereas the crucial word in section 32 is "allowance".

"Expenses" cannot be equated with "allowance" and therefore 40A(3) cannot be applied to section 32.