Section 40A(3)

Querist : Anonymous (Querist) 31 May 2010 This query is : Resolved
Whether the purchase of capital assets by cash exceeding rs.20000 comes under the preview of section 40A(3)?

Please give me answer as soon as possible with reference.

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Jagmohan Rawat (Expert) 31 May 2010
No. Section 40A(3)is applicable to only revenue expenses debited to the P&L a/c. Hence purchase of capital assets in cash exceeding Rs.20000/- is not covered in the said section.

A V Vishal (Expert) 31 May 2010
Section 40 A(3) is not applicable for purchase of capital asset not meant for sale.
Refer Circular no 34 dated 05/03/1970.

Vineet (Expert) 01 June 2010
Please refer to an identical query raised in this section on 17th May, 2010 with link below.

http://www.lawyersclubindia.com/experts/CASH-PAYMENT-RECEIPT-ABOVE-20000-ON-PURCHASES-SALES/87316/

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