26 March 2008
URGENT! please clarify! my client has made cash payment for purchase of capital asset exceeding Rs. 20,000/-.Whether the expenditure will be disallowed! or Whether depreciation in that respect will be disallowed!
26 March 2008
SECTION 40A(3) DISALLOWS ONLY REVENUE EXPENDITURE EXCEEDING RS 20000/- AND NOT CAPITAL EXPENDITURE EXCEEDING RS 20000/-,THEREFORE CAPITAL EXCEEDING RS 20000/- CAN BE PURCHASED IN CASH AND NO DEPRICAITION SHALL BE DISALLOWED
26 March 2008
Section 40A(3) speaks in respect of expenditure only.since you have purchased a capital asset which is not an expenditure so there is no question of disallowance u/s 40A(3)regarding amount of capital assets purchased as well as depreciation thereon.
CAclubindia
