Dear Suneet,
Sec 40A(3) applies to expenditure made in cash. Depreciation is a non-cash expenditure hence it does not attract disallowance under section 40A(3).
Regards,
Fatema
40A(3)
Page no : 2
MAS007
(ACCOUNTANT)
(124 Points)
Replied 24 September 2010
Dear Fatema,
It is given in Taxmann's Direct Taxes Ready Recnor in Para 49.3 in that 49.3-2 in Scope of Sec 40A(3) that the section is applicable even if depriciable asset is purchased.
Thanks
Moin
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 24 September 2010
Dear Moin,
Reckoner is only v.k. singhania's interpretation of the income tax act.Please read the bare act.It does not say anythng about applicability of sec 40A(3) to depreciation.
Regards,
Fatema
pankaj kumar suryan
(doing practice)
(26 Points)
Replied 25 September 2010
thear will be no disallowance, section 40A3 disallowed the payments in excess of 20000 which is related to the payments of either pgbp or ios
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