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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2013 If assessee buys a capital asset in cash ( cost is more than 20000), whether sec 40 A(3) comes into play, and also whether depreciation will b disallowed on that asset??

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 August 2013 sec.40A(3) will not apply for purchase of fixed asset

Ganeshbabu K

Ganeshbabu K (Expert)
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24 August 2013 1)Sec.40A(3) speaks about cash expence more than 20000 in a single day to single person,,however it is limited to those items which is debited to profit and loss account

2)more over you cannot disalow depreciation ,,because depreciation is allowance and it is not expenditure
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depreciation is allowed on certain percentage on use of assets,,

So you cannot disallow depreciation also

However you can recommend to company to purchase fixed assets only by cheque to have better internal control sysytem

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