Additional Depreciation PGBP

This situation could be possible only if the other assets are being sold on profit (i.e. above their WDV) and in such case treatment of WDV for eligible assets shall be taken normally and here is reason for that;

When you read section 32(1)(iia) you could clearly see there that additional depreciation is given @ 20% / 35% of the ACTUAL COST OF THE ELIGIBLE ASSETS (not of the WDV). Therefore WDV has nothing to do with the Additional Depreciation. But WHEN YOU WILL CHARGE NORMAL DEPRECIATION THEN THAT WILL BE CALCULATED ON WDV ONLY.

Now you question regarding 32AD; 32AD has NO LINKAGE WITH DEPRECIATION OR THE WDV. It is simply just this that if Certain Undertakings have invested certain sum in plant in machinery then you will be allowed ADDITIONAL DEDUCTIONS (NOT DEPRECIATION) @ 15% in the year of expense. BUT THERE IS A LOCK IN OF 5 YEARS under 32AD so you can't sold the same Assets. Although if you have sold all other assets of the block that would not have any impact u/s 32AD Deductions.

Okay i have understood regarding section 32AD,
but i would like to explain my doubt regarding 32(1)(iia) with an example.

Say i had a block consisting of a machine with WDV of 2,00,000.
During the year i purchased an "eligible asset" of 10,00,000 and sold the earlier machine at 11,00,000.

so the WDV at the end of the block is 1,00,000
but the additional depreciation allowable if calculated on cost would be 2,00,000 (20% of 10,00,000)... thus additional dep exceeding the WDV.
My doubt is regarding this case.
Should the additional dep in this case be calculated on the WDV at the end or the Cost only?

Be it DEPRECIATION or ADDITIONAL DEPRECIATION one thing is common in both the terms i.e. DEPRECIATION itself.

Now Depreciation is defined as the reduction in value of Assets due to it's usage (normal wear and tear) over the time. And I believe it's quite obvious that reduction in something's value can't exceeds the Value itself.

e.g If something is of Rs. 100 then max. reduction can be upto 100 only.

So in your given situation the Additional Depreciation can't exceeds the Value of Block. Excess remaining Additional Depreciation would lapse.

Suggestion- You could purchase some more assets in the same block and then you could utilised the remaining balance of Additional Depreciation.