X Ltd has purchased a Machine for Rs 1000000 by cash.
Whether the depreciation is allowed or not thereon with respect to section Sec 40A(3) ?
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Sec 40A93)
Replies (3)
no...the payment of machine will not hace any impact on the depreciation charged on it.......it will be charged on its usual rate of 15%....as sec 40 A(3) is fr items related to items of p& l a/c nd so it has no relation with the mode of payment fr purchase of machinery......
sec 40(A)3 comes into the picture only if assessee incurs an expenditure.therefore,purchase of capital assets on which 100% or even normal dep is allowed will not constitute exp.
40A(3) will apply if buying and selling machinery is part of its business. Otherwise, no impact.
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