Cash payments for construction of a building

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2011 Dear expert ,
Can a Pvt. Ltd company pay in cash exceeding 20000/- for construction of a building towards Sand , Bricks , massionory etc. expenses.
please help me . very urgent.
thanks in advance.

Kapil Gupta

Kapil Gupta (Expert)
Follow

12 December 2011 As per the provision of the Income tax Act, an expenses paid in cash for more than Rs. 20,000 is disallowed.
You have to analyse the situation here. The amount paid is expense or not. As mentioned by you, it seems the amount paid is for construction of a building which for creating an assets. This is not an expenses. So there is no question of dis-allowance.