Additional depreciation

 

Additional Depreciation Clarification Needed

As per section 32 in case any new plant/machinery is acquired and installed during the previous year then additional depreciation of 20% is allowed.

Issue involved: whether installation of plants/machineries should be within the same financial year in which they are acquired. In other words can assets be put to use in the subsequent financial years and still the additional depreciation be claimed in the year in which asset is first put to use.

For Example: If a machine is purchased during the financial year 2014-15 but same is installed during the financial year 2015-16. Can additional depreciation of 20% be claimed in A.Y 2016-17 or eligibility of additional depreciation shall laps because acquisition and installation falling under two different years.

Replies (5)
In this case no depreciation will be allowed and no additional depreciation will be allowed.

Thanx Navin ji

Can you please give reference of concerned case law !!!!!!!!!!

This will be additional help.

[(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 90[or in the business of generation or generation and distribution of power], 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;]
Some people say additional depreciation, some say enhanced depreciation, and provision says further depreciation, You also used word additional depreciation, when there is no depreciation there can't be additional depreciation. In all above 3 meaning where there is no depreciation there can't be further 20% depreciation.
Sir, as I said that as no depreciation will be allowed, no additional depreciation will be allowed, but in next year you can claim normal depreciation and additional depreciation, as provision doesn't say thatit should be same year.

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