additional depreciation

"It is well aware that u/s 32 of Income tax Act, an additional depreciation of 20% is allowed. The law also says that if in the year of addition of machinery in any year is less than 180 days, the additional depreciation is restricted to 10%. Such additional depreciation is also available only in the year of addition. But I reliably learnt that the balance of 10% of the additional depreciation can be claimed in the following year also. Can any one clarify whether it is correct with substanciation of law or any case law to be relied upon."

Replies (4)

 

Yes its correct for manufacturing unit they can take additional depreciation as per no. of days used maximum 20% if used less than 180 days than 10 % will additional depreciation allowed.

 if  additional depreciation is claimed @ 10% can the remaining 10% be claimed in the subsequent year?

On going thorugh the provision of it is no where mentioned that 50% of 20% additional depreciation should be allowed if the asset is put to use for less than 180 days. So in my view the additional depreciation is for one time and it is should charged in full i.e. @ 20% even if the assets is put to use for less than 180 days in the relevant financial year.

 

[(iia)  in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) :

            Provided that no deduction shall be allowed in respect of—

    (A)  any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or

    (B)  any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or

    (C)  any office appliances or road transport vehicles; or

   (D)  any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year;]

Thanks sir

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