Is Sec 40A(3) applicable even in case of purchase of Depreciable Asset ??
7 Replies
M. Gokulakrishnan
(Assistant Manager - Taxation)
(49 Points)
Replied 29 April 2009
Sec 40A (3) says any expenditure paid either single or in aggregate to a person....... Section 29 to 40A(3) basically deals with revenue expenditure/expenditure charged to Profit and Loss Acccount. On this strength, we can argue that 40A(3) applies only to revenue expenditure. But we have to face the following consequences:
1. The payment for depreciable asset is not charged to P&L A/c. But we are claiming the depreciation on the said asset for which the cash payment is made. Hence deduction of depreciation becomes a issue. 2. More over if you read the section 40A(3), it starts with the word "any expenditure".
Riyaz Khan
(CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.)
(1315 Points)
Replied 29 April 2009
Yes, Section 40A (3) only deals with the payment for any expenditure which is claimed from the Taxable Profits of the Assessee. If Assesse purchases any Asset and doesn't claim it as an expense in Trading and P/L Account, they he/she need not to worry. Be Happy, Dont worry.........
CA Chaitanya
(PRACTISING CA)
(4283 Points)
Replied 29 April 2009
It applies to an expenditure which can be claimed as deduction u/s 30 - 37.
krishna kumar
(CA Final)
(407 Points)
Replied 30 April 2009
| Originally posted by :CA Chaitanya | ||
| " | It applies to an expenditure which can be claimed as deduction u/s 30 - 37. | " |
true, but depreciation is an allowable expenditure u/s 32. what about this depreciation, can we claim the same ?
M. Gokulakrishnan
(Assistant Manager - Taxation)
(49 Points)
Replied 30 April 2009
My quote is not displayed fully. Please click on the "quote" icon in my message box and read it fully.
I have answered elaboratly including Mr, Krishnakumar query on depreciation.
Recent Topics
- Rectification to decrease income in SCHEDULE OS
- Can Statutory Auditor of a subsidiary become concu
- Client Asking for the Revised Invoice
- Share office desk in bkc, near family court
- 80D claim for payment paid by parent
- TDS on purchase of Flat under subvention scheme be
- Iska djd djrbdsjebshe sir ur rei ejr reinr the jr
- GST registration for medical shop in Karnataka
- Hsshs me know if you are free number of the
- Chu Kang and the situation of the situation and I
Related Threads
CAclubindia
