21 September 2007
Section 40(A)(3) related 1. Payment made to State electricity board will be disallowed ? will it be considered as payment to Govt. ?
2. Payment is made to the depositer by debit his account and crediting the a/c. of payer's sister concern. will it tanamount ot violation u/s. 40(A)(3) ?
Another query is : There is purchase of Land with building for Rs. 1 crore. now for sake of computation of depreciation, how should I seperate the amount of land and amount of building ?
21 September 2007
PAyment to State Electricity Board will be disallowed, this is a payment to the Municipal Corp of the State. Only Sales Tax / Excise is allowed u/s 40(A)(3).
Payment for the Sister concern is a violation if paid in CASH u/s 40(A)(3).
22 September 2007
1.Section 40(A)(3) deals with business expenditure and not repayment of deposits . Repayment of deposits is dealt by section 269T . Section 269T , mandates repayment of deposits by issue of account payee cheque issued in the name of depositor . Repayment by contra entry is not permissible.
2.The value of land is to be estimated on reasonable basis . One basis may be ongoing sales price of the land in nearby areas. Another basis may be value as fixed for stamp duty purposes.
3.State Electricity Board is an organ of Government
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