Sec 40A(3)

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Anand yadav kumar (Querist)
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11 March 2009 hi every one
i hav a query
if an asset is purchased for cash exceeding Rs 20000/- , then sec 40A(3)gets attracted . then whats the penal provision for such as , however , asset purchased will not be allowed as deduction as it will get captalised

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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11 March 2009 such payment will be capitalized and its not deductible. and section 40A(3) is not applicable.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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11 March 2009 Section 40A(3) is not applicable on Capital Assets purchased. Although one famous writer of Income tax books is of the view that Depreciation on assets may be disallowed which were purchaesed in Cash, but most of the writers do not have this view. Keeping the main provisions of section 40A(3), it can be said that no disallownace can be made on assets purchased in cash.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 March 2009 The provisions of section 40A(3) would apply in computing the income under the head profits and gains of business or profession and income from other sources under section 58(2) only. Hence purchase of assets in cash for more than Rs 20000/- will not qualify for disallowance u/s 40A(3). Pl refer https://law.incometaxindia.gov.in/TaxmannDit/DispCitation/ShowCit.aspx?fn=https://law.incometaxindia.gov.in/directtaxlaws/cbdt/dtccontents/PARA0379.htm

Anand yadav kumar

Anand yadav kumar (Querist)
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14 March 2009 is it possible that depreciation getting disallowed

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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14 March 2009 Dear Anand, Most of the experts are not of the view of depreciation disallowance, but if any Assessing officer comes with such a view, then it can be matter of appeals.

Anand yadav kumar

Anand yadav kumar (Querist)
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14 March 2009 thanks for that tarun !!!

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