sec 40A (3)
This query is : Resolved
11 June 2010
whether sec 40A (3) is aplicable to a payment made in cash for purchase of Land. I have gone through the books and got a circular no. 34 dated 5th march 1970 which states that payment could be made in cash for purchase of Capital Assets. But I still a doubt reguarding the validity of the said circular. Please help me out.
Aditya Maheshwari
(Expert)
11 June 2010
Capital asset can be purchase in cash.
11 June 2010
Section 40A(3) does not apply to expenditure which is not to be claimed as deduction u/s 30 to 37.
Purchase of land is capital expenditure.
Under section 37, only revenue expenditure is deductibele.
Hence 40A(3) is not applicable to purchase of land in cash.
Purchase of land is capital expenditure.
Under section 37, only revenue expenditure is deductibele.
Hence 40A(3) is not applicable to purchase of land in cash.
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