06 March 2010
In case of additional depreciation there is difference of opinioun between V K Singhania and Vinod Gupta as per there book illustration Which is V K Singhania says: - If new plant and machinery is installed in factory Additional depreciation is available at actual irrespective of WDV of that block. Whether WDV insufficient or nil to absorb additional depreciation, additional depreciation is available at its cost. For ex. If WDV as on 1/4/2009 of Block @ 15% is 10,00,000 Addition to Block (Machinary A) 500000 Sale of old plant 14,50,000 WDV as on 31/3/2010 50,000 Normal Depreciation (50,000@15%) 7500 Additional Depreciation(5,00,000@20%)100000 WDV as on 1/4/2010 Nil
Now Vinod Gupta illustration says Additioanl Depreciation will be restricted to Balance in WDV of Block. In my example After claiming Normal Depreciation WDV will be 42500 And now additional depreciation will restricted to 1,00,000 or 42500 whichever is lower. i.e. 42500.
Whose connotation is correct Singhani or Vinod Gupta.
07 March 2010
I think Mr. Singhania is right in this case addition dep will be available becasue it is avilable from put to use of new machinery it is not depend on block value. It is calculated on actual value of new machinery. So it will be available.
CAclubindia
