Section 40a(3) of the income tax act.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2012 Dear friends
I have a query related to section 40A(3) of The Income Tax Act.
A person working as a property dealer, when he purchases the land then some payment made in cash which may be in lakhs. As per section amount paid in cash is disallow.
Now I want to know that whether this type of Assessee have some relaxation or not???

CA Kishore Tallam

CA Kishore Tallam (Expert)
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03 April 2012 Amount paid in cash for purchase of land is not disallowed (assuming land is capital asset and not stock in trade) since it is not a depreciable asset and it is not claimed as expenditure u/s 30 to 37.