15 May 2009
Ofcourse, depreciation will be allowed. However as the expenditure is above Rs.20,000 in cash, 20% of the amount of expenditure will be included under the head "Profit and Gains from Business/Profession"
15 May 2009
Depreciation on assets purchased in cash in excess of Rs.20,000/- is allowable u/s 32. Provisions of section 40A(3),in such cases, will not attract for the cost of the asset as well as for its depreciation.
15 May 2009
As in the given case the expenditure is Capital Expenditure, no question arises for disallowance of 20% of the expenditure. 20% disallowance was applicable only on Revenue business expenditure. Presently, if any revenue business expenditure made in cash above Rs.20,000/- whole of such expenditure is disallowed.
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