CA Devender Chauhan (Group Financial Accountant) (1526 Points)
03 August 2011Can the payment exceeding 20000 as per section 40(A)3 be made for the purpose of capital expenditure.
Can a person purchased a capital asset of Rs. 2,00,000 through cash.
Plz clarify...........
C.A. Parin Poojara
(Chartered Accountant)
(90 Points)
Replied 03 August 2011
yeah. An assessee can make payment in cash exeeding Rs.20,000 in cash in case of purchase of any fixed assets..
Parmod Rawat
(B.COM,MBA,CWA Inter)
(401 Points)
Replied 03 August 2011
yes you can buy capital expenditure through cash in any extent... as there is no limit for cash payment for purchase of capital expenditure..
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 03 August 2011
Agree wit above views.
CA Devender Chauhan
(Group Financial Accountant)
(1526 Points)
Replied 04 August 2011
Thanx to all for replying my query............
One more thing can you give any reference of IT Act or any case law..
this will be really helpful
thanx in advance
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 04 August 2011
Hi DS
Sec 40A(3) doesn't apply in respect of expenditure which is not allowed u/s 30-37.
But if an assesse purchases depreciable capital asset for business purpose (in cash above 20000) , then the dep will be not allowd by this section, as dep is covered under sec 32.
CA Ashwani Agarwal
(Practice)
(3049 Points)
Replied 04 August 2011
No reference is needed.
In 40(A)(3), it is written that you will not be allowed deduction of the expenditure if it is paid in cash in excess of 20000.
Now we any ways dont claim deduction of a Fixed Asset. So there disallowance is out of question.
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 04 August 2011
I do agree with Ashwani that we are not claiming any deduction for fixed asset, so disallowance is out of question. But I'm talking abt its dep, which will be disallowd by the virtue of sec 40A(3).
CA Devender Chauhan
(Group Financial Accountant)
(1526 Points)
Replied 04 August 2011
| Originally posted by : CA Ashwani Agarwal | ||
 |
No reference is needed. In 40(A)(3), it is written that you will not be allowed deduction of the expenditure if it is paid in cash in excess of 20000. Now we any ways dont claim deduction of a Fixed Asset. So there disallowance is out of question. |
 |
Thanx Sir, I got your point...........
But as Sanath Kumar said about the depreciation on such asset which is purchased by making payment in excess of Rs. 20000 through cash..........
Can we claim the depreciation on such asset.........
Plz clarify
%$ anil ....article trainee
(help ever fnd forever)
(204 Points)
Replied 04 August 2011
%$ anil ....article trainee
(help ever fnd forever)
(204 Points)
Replied 04 August 2011
CA Devender Chauhan
(Group Financial Accountant)
(1526 Points)
Replied 04 August 2011
| Originally posted by : anil............. | ||
|
|
Hi sir ,hear one more thng is like this rule is not applicable for purchase of a capital asset not meant for resale r repayment of loan |
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Thanx Anil for taking part in the query but now my question is only that
wheather the depreciation on purchase of such capital asset (purchsed through cash) will be allowable or not?????
Depreciation will be allowable
Please ref this link
https://taxlawsjournal.wordpress.com/category/income-tax/disallowance/
thanx
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 05 August 2011
Read Para 49.3-2 (5th point) of Taxmann , Direct Taxes Ready Recknor (AY 2011-12 & 2012-13) by Dr. Vinod K.Singhania
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