20 September 2009
A company has acquired plant and machinery, in the py 2006-07 eligible for additional epreciation u/s 32. however company did not take additional depreciation in the PY. can the company now claim additional depreciation?
is there any provision or judgement which says that additional depreciation can be claimed in the initial year of its acquition only??
20 September 2009
Additional depreciation on new plant and machinery
It was proposed that a new industrial undertaking that acquires and installs on or after 1 April 2002 new plant and machinery used in the manufacture or production of any article or thing, is eligible for additional depreciation of 15 per cent on the actual cost of these assets in the year of start of manufacture.
It was also proposed that such additional depreciation will not be allowed in respect of any plant or machinery, the whole or part of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) from business income of any one previous year.
It is now provided that the additional depreciation will not be allowed only if the whole of the actual cost of the plant or machinery is allowed as a deduction from the business income of any one previous year.
It was also proposed that the benefit of additional depreciation be also extended to units existing as at 31 March 2002, which achieve substantial expansion in any year by way of additional installed capacity of at least 25 per cent. The term 'installed capacity' was defined to mean the production capacity as existing on the last day of any previous year commencing on or after 31 March 2002.
20 September 2009
·Conditions for claiming Additional depreciation over & above Normal depreciation:
Condition Description
I It is allowable to all assesses engaged in the manufacture/ production of any article/ item/ thing.
II New Plant & Machinery should be acquired & installed after 31st March’ 2005:
· Additional depreciation is not allowable in respect of Buildings & Furniture or Old Plant & Machinery.
· The condition of Acquisition & Installation of Plant & Machinery should be satisfied simultaneously, on failure of which additional depreciation cannot be claimed on same.
III Additional Depreciation claim is available only in case of Eligible Plant & Machinery, wherein all Plant & Machineries are eligible except the following:
· Ships & Aircrafts; or
· Any machinery/ plant which is and Old/ Second hand.
· Any machinery/ plant installed in any office/ residential accommodation/ guest house accommodation.
· Any machinery/ plant whose total actual cost is allowed as a deduction in computing business income in any if one previous years.
IV The rules of 180 days or above for calculating normal depreciation are applicable in case of calculation of additional depreciation.
CAclubindia
