X Ltd has purchased a Machine for Rs 1000000 by cash.
Whether the depreciation is allowed or not thereon with respect to section Sec 40A(3) ?
3 Replies
Sunshine
(Helping All)
(10575 Points)
Replied 03 September 2010
no...the payment of machine will not hace any impact on the depreciation charged on it.......it will be charged on its usual rate of 15%....as sec 40 A(3) is fr items related to items of p& l a/c nd so it has no relation with the mode of payment fr purchase of machinery......
Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 03 September 2010
sec 40(A)3 comes into the picture only if assessee incurs an expenditure.therefore,purchase of capital assets on which 100% or even normal dep is allowed will not constitute exp.
Member
(Management)
(325 Points)
Replied 04 September 2010
40A(3) will apply if buying and selling machinery is part of its business. Otherwise, no impact.
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