Additional Depreciation

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Akhil (Querist)
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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.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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07 March 2010 better send this querry to both the authors

CA Prashant Gupta

CA Prashant Gupta (Expert)
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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.

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