If fixed asset is purchased in cash above Rs. 20000/-, whether dep. on that asset will be disallowed by virtue of Sec. 40A(3) or not.
I have read in Ready Reckoner of Taxmann that the above shall be disallowed but the act is silent about this.
If it is disaalowed please give the circular/ notifacation number regarding its clarification at gauravbansal00776 @ gmail.com
Sec. 40A(3) is applicable only on expenses exceeding rs.20000 by cash.....
Section 40A(3) states that expenditure will be disallowed whereas the depreciation on Fixed Assets is an ALLOWANCE and not an expenditure. Hence, 40A(3) is not applicable for purchases of fixed assets or depreciation thereon......
N N V Satish & Co.,
Hyderabad
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M N Rao & Associates LLP
Vijayawada
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