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disallowance of depreciation

11 September 2018

If an assessee purchased a car and gave an advance of Rs 20000 in cash and remainning payment is done through the cheque does it allowed for depreciation or not ??

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5 Replies

Sunil Ahmad (Student) (1511 Points)
Replied 11 September 2018

ya depreciation can be allowed

Piyush Shirodkar (CA Final Student) (1358 Points)
Replied 11 September 2018

Yes depreciation is allowed u/s of IT ACT 1961 irrespective of mode payment, provided the asset is put to use as on relevant date of the financial year.

harsha (Article) (208 Points)
Replied 11 September 2018

No... The Cheque payment amount is only allowed for depreciation. 20,000 is disallowed as per sec 40a(3)

Ashwin Kumar (1229 Points)
Replied 11 September 2018

Harsha i think you are talking about 40A(3). The expense of 20000 will be disallowed as the same is above the limit but for the purpose of depreciation cost will taken the amount paid by the purchaser provided the asset used for business purpose. in that case he can take depreciation based on the number of days used by him. Correct me if i am wrong.

rama krishnan (12234 Points)
Replied 11 September 2018

attn: Mr. Ashwin, as per the latest amendment, cash payment made in excess of 10000 towards revenue expenditure or capital expenditure will be disallowed u/s 40A(3) or 43 respectively

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