40A(3)- Fixed Asset

40 A(3) deals with only revenue expenditure which are claimable in the Profit and Loss account. Therefore the cash transactions pertaining to capital expenditure are out of the purview of 40 A(3)

sec. 40A(3) clearly deals with expenditure debited to profit oo loss a/c . It does not deal for payment of assets purchased. Further dep is not an expense in strict sense.

The following sub-section (3) shall be substituted for the existing sub-section (3) of section 40A by the Finance Act, 2007, w.e.f. 1-4-2008 : (3)(a) Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft, no deduction shall be allowed in respect of such expenditure The words used in the amended section is no deduction shall be allowed in respect of such expenditure .If depreciation , is deduction , in respect of such expenditure , it will be disallowed.

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