https://www.taxtmi.com/forum/issue?id=1001 Depreciation is a statutory allowance on assets owned and used for business and is not ordinarily a revenue expenditure; therefore disallowance for cash payments should not automatically apply. Nonetheless, the provision barring deductions for certain cash payments may be construed to encompass capital expenditure and related depreciation, enabling an assessing officer to challenge the allowance. Practical responses include capitalising the amount and claiming depreciation, invoking prescribed exceptions to cash payment disallowance, and avoiding high value cash payments by using account payee cheque or DD due to difficulty proving bona fides. en-us Sat, 10 Jan 2009 14:21:38 +0530 Thu, 23 Jan 2025 15:58:49 +0530 TaxTMI RSS Generator https://www.taxtmi.com/forum/issue?id=1001 Depreciation is a statutory allowance on assets owned and used for business and is not ordinarily a revenue expenditure; therefore disallowance for cash payments should not automatically apply. Nonetheless, the provision barring deductions for certain cash payments may be construed to encompass capital expenditure and related depreciation, enabling an assessing officer to challenge the allowance. Practical responses include capitalising the amount and claiming depreciation, invoking prescribed exceptions to cash payment disallowance, and avoiding high value cash payments by using account payee cheque or DD due to difficulty proving bona fides. Discussion-Forum Income Tax Sat, 10 Jan 2009 14:21:38 +0530 https://www.taxtmi.com/forum/issue?id=1001