section 40A(3)

It is not applicable for the capital expenditure payments.

Only operative exp. are covered under this section

Yeah it is applicable on expenditures only and purchase of an asset is not an expenditure

In the case of fixed assets how will the assessing officer first of all disallow when it is not coming throgh P&L?

Thanks a lot friends!!!

Please tell me , if payment made for purchase of raw materails by crossed cheque to a supplier - sec 40a(3) is applicable. 20% of payment will be disallowed if it is in excess of 20000/-.

yes its also apply on payment made for purchase of fixed assets as the deprecation on fixed assets is debited in P&L.
 

going by the earlier provision crossed cheqs wer nt affctd by 40A(3), but  recent amendments, trigger 40A(3) in case of payment thru crossed cheques too. As it is possible to encash crossed cheques.

40A(3) shall not apply to depreciation, the same is an allowance that s claimed. It is not an expenditure.