Rent paid Rs. 38,000 p.m. in cash after deducting TDS is disallowed under section 40A(3) ?
Fixed asset (computer) of Rs.45000/- is acquried by paying cash is disallowed under section 40A(3) ?
AADI (Accountant) (74 Points)
05 February 2012Rent paid Rs. 38,000 p.m. in cash after deducting TDS is disallowed under section 40A(3) ?
Fixed asset (computer) of Rs.45000/- is acquried by paying cash is disallowed under section 40A(3) ?
Vineet Goyal
(Assistant Manager - Finance & Accounts)
(702 Points)
Replied 05 February 2012
rent is disallowed, not assets. As assets is not expensed off.
AADI
(Accountant)
(74 Points)
Replied 05 February 2012
Sir ,
What about depreciation ? Is such an asset is eligible for deduction u/s 32.
CA Abhirup Kar
(CA)
(92 Points)
Replied 05 February 2012
Yes, computer is eligable to depreciate u/s 32..
indraneel karumanchi
(student)
(49 Points)
Replied 05 February 2012
yup he has quoted depreciation under business or profession he is wrong
Srikanth
(Tax Associate)
(297 Points)
Replied 06 February 2012
Cash payments in excess of Rs. 20,000 towards any type of revenue expenditure is disallowed. In that case payment can be made through account payee cheque. However, purchase of fixed assets amounts to capital expenditure & hence not disallowed. Depreciation can be claimed.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 06 February 2012
PURCHASE OF FIXED ASSETS IS A CAPITAL EXPENDITURE....
SEC 40 A (3) DISALLOW ONLY REVENUE EXP...EXCEEDING Rs 20000 ..
Rekha
(CA FINAL)
(79 Points)
Replied 06 February 2012
purchase of fixed assets will come in balance sheet not in p & L a/c...so it is not disallowed as per sec 40 A(3)...and moreover this section will not applicable to any assets where you are providing depreciation...but this disallowance will be applicable if you purchase equipment for research purpose, here you are claiming deduction not depreciation...
Dharmendra Shaktawat
(CA FINAL)
(31 Points)
Replied 06 February 2012
Cash payments in excess of Rs. 20,000 towards any type of revenue expenditure is disallowed. In that case payment can be made through account payee cheque. However, purchase of fixed assets amounts to capital expenditure & hence not disallowed. Depreciation can be claimed.
Vignesh Killur
(Articled Assistant)
(1666 Points)
Replied 06 February 2012
Hi Everyone!
I have a serious doubt about whether depreciation can be claimed. Please refer Vinod Singhania CA FINAL Book Page 399, Para 148.3, 2011-12, 46h Edition Under Section 40A(3) in which he says that if you make a payment above Rs. 20,000 except by account payee check i.e by Cash or bearer cheque etc then the deduction under sections 30 to 37 cannot be claimed. For example if a an assessee purchases a plant & Machinery for Rs. 400,000 depreciation of 15% on Rs. 400,000 i.e Rs. 60,000 will be disallowed under sec 40A(3)
Please clarify. Please provide any case laws regarding the above.
sunil
(student)
(60 Points)
Replied 06 February 2012
Pls mention the section under which Depreciation can be claimed?
indraneel karumanchi
(student)
(49 Points)
Replied 07 February 2012
no depriciation claimed is not a cash expenditure it is a non cash expenditure i.e u need not pay any cash to anybody
Kaushik Dedhiya
(Associate CWA CA Final)
(133 Points)
Replied 07 February 2012
Hey friends what if assessee has paid that amount in two installments i.e. on one day Rs.19,000/- and the balance on a next day after deducting TDS???then will it be allowed???
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