Sec 40a(3)

Save Share

This query is : Resolved

Sumit (Querist)
Follow

23 October 2010 Suppose I make a payment of Rs. 1000000 for capital expenditure i.e. for purchase of business will that be disallowed under the act??
If any case law please quote that also.

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
Follow

23 October 2010 No problem Sumit,

The whole amount will be allowed as deduction because there is a list given under Rule 6DD and this is also given that Expenditure on Fixed asset is not disallowed even if paid in Cash...

Regards!!!
Dinesh S. Adhikari

CA. Gurdeep Singh Chawla

CA. Gurdeep Singh Chawla (Expert)
Follow

23 October 2010 allowed as deduction

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

24 October 2010 Section 40A(3) is related to "computation of business income". Capital expenditure is generally not considered for computing business income. In view of that, capital expenditure incurred and paid in cash is out of the purview of section 40A(3) of the Income tax Act,1961.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now