TaxTMI 
TaxTMI 
Whether Purchase of a depreciable Capital assets in cash exceeding Rs.20000/- liable for disallowance u/s 40(A)(3)? Whether depreciation be allowed or disallowed on said purchase?
Is U/s 40(A)(3) apply on Cash payment 4 purchase of a depreciable capital asset exceeding Rs.20000?
04 May 2010 
2 Replies 
9503 Views Asked by
Applicability of section 40A(3): whether cash purchase restrictions can curtail claimed depreciation on capital assets.
Whether the payment-restriction provision applies to cash purchases of depreciable capital assets and affects claimed depreciation is disputed: one view limits the provision to expenditures debited to the profit and loss account and not to depreciation, while another relies on the provision's non-obstante clause to cover capital expenditure for business income computation, potentially permitting assessing officer disallowance of depreciation attributable to affected payments. (AI Summary)
Whether the payment-restriction provision applies to cash purchases of depreciable capital assets and affects claimed depreciation is disputed: one view limits the provision to expenditures debited to the profit and loss account and not to depreciation, while another relies on the provision's non-obstante clause to cover capital expenditure for business income computation, potentially permitting assessing officer disallowance of depreciation attributable to affected payments. (AI Summary)