will additional depriciation be allowed on eligible plant and machinary if closing wdv of the block is nil?
13 Replies
vishnupriya
(CA Final)
(1418 Points)
Replied 14 August 2011
Enhanced/Additional depreciation is allowed even the WDV of block of assets in NIL but it should be claimed only one time.
CA Saiyum khan
(Practicing CA)
(690 Points)
Replied 14 August 2011
WDV of asset can never be less than Zero. In the given case if additional depreciation would be allowed as a result the WDV will go below zero.
ROHIT CHATURVEDI
(CA Final Student )
(2298 Points)
Replied 14 August 2011
no it can't be allowed if wdv is zero
vishnupriya
(CA Final)
(1418 Points)
Replied 14 August 2011
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 14 August 2011
| Originally posted by : CA Saiyum khan | ||
 |
WDV of asset can never be less than Zero. In the given case if additional depreciation would be allowed as a result the WDV will go below zero. |
 |
yes agreed
varun sharma
( CA Final , M.Com)
(87 Points)
Replied 14 August 2011
additional depreciation would be allowed as a result the WDV will go below zero. and Wdv can never below Zero.
Agreed
pankaj
(teacher)
(74 Points)
Replied 14 August 2011
thanks for the reply ..but dont you all think that additinal depriciation can be claimed in the next year?
sunil
(manager)
(46 Points)
Replied 14 August 2011
Sir,
Kindly let me know the rate of roller Depreciation used in Aluminum Rolling mill. Since the rate of Iron and steel industry is 80 % in Rolling mill rolls as per Income Tax act. But the rate of Aluminum Rolling Mills Roller is not specified in the Income tax act.
So please let me know at an earliest.
Thanking you.
Regards
Sunil Gattani
C/o.Jai Bajrangbali Aluminum Products
A.T.Road Jorhat -785001 (Assam)
Cell No : 94350-51992
Ashwani Narnoli
(.)
(1843 Points)
Replied 15 August 2011
"WDV of asset can never be less than Zero. In the given case if additional depreciation would be allowed as a result the WDV will go below zero."
Yes i also agreed
CA PARAS BAFNA
(Practising CA )
(33428 Points)
Replied 16 August 2011
Q. Will additional depriciation be allowed on eligible plant and machinary if closing wdv of the block is nil?
Reply- The closing WDV can be Nil in the following circumstances -
1. Balance as on 1.4.2010 .......4000
2. Addition .................................15000 (Asset eligible for Additional Depreciation @ 20%)
3. Total........................................19000
4. Sales/ Deletion ......................19000 (old Asset Sold for 19000 )
5. Balance ........... 0
The Value of Block is 0 ,
We can't provide normal depreciation and -.....if can provide it will be 0.
We can't skip any of the above steps so as to insert Additional Depreciation in between No. 1 to 5.
First we have to provide Normal Depreciation.
Conclusion:
Additional Depreciation can be claimed @ 20% of WDV and .....that will also be 0.
Only 0 can be deducted from 0 for not getting a negative WDV.
Here Section 50 will also not help as the loss is not due to Sale or transfer.
vishnupriya
(CA Final)
(1418 Points)
Replied 17 August 2011
Additional Depreciation is not calculated on WDV. it is calculated directly from cost of Plant and Machinery @ 20%.
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 17 August 2011
Hi Pankaj
Additional depreciation is computed on individual asset and not on the block of asset, so I think additional depreciation will be allowed even if the block reduced to Nil.
But if the new plant & machinary is sold in the year of acquisition, then additional depreciation will not be allowed in that case.
CA Devender Chauhan
(Group Financial Accountant)
(1526 Points)
Replied 17 August 2011
Plz refer the link
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