24 September 2013
Hi Ankit, The word "expenditure" in section 40A(3) covers expenditure of all categories including that on purchase of goods and merchandise as also payment for services. The payments made in advancing loans and returning the principal amount of borrowed moneys are not covered by these provisions of section 40A(3), as these do not constitute expenditure.--Vide Letter F. No. 1(22) 69-TPL (PT), dt. 18-4-1969. Good Luck..
24 September 2013
another simpler way of looking at it is : whatever expense is being claimed against profits in computation of taxable income is expenditure and rigours of Section 40A(3) will apply to such items.
CAclubindia
