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Additional depreciation -section 32(i)(iia)

sivaram (Asst Mgr-Taxation) (6918 Points)

28 June 2011

1.Suppose an Assessee Purchases a new plant costing 30000 and put to use immediately in June 2010.

Normal Depreciation for this block is 100%

Should we need to compute Additional Depreciation on this plant say 20%

2.When a new plant costing 30000 is acquired in sep 2010 and put to use in Nov 2010 thereby usage is less than 180 days Normal depreciation is 15%

Should I compute addl depreciation only for 10%

and is it possible for me to claim additional depreciation for next year for another 10%

Please give Your views

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17 Replies

CA. Roopali Kadam (Jobs on assignment basis.) (1453 Points)
Replied 28 June 2011

1. NO addl depn(wait for other members comment) bcoz block will become nil after normal depn

2.addl dep 10% in this yr. no claim in next yr

1 Like

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 28 June 2011

Thank u Mr Roopali Kadam for the reply

CA Suraj Prasad Shaw (Chartered Accountant) (504 Points)
Replied 28 June 2011

Originally posted by : Roopali Kadam
	1. NO addl depn(wait for other members comment) bcoz block will become nil after normal depn 2.addl dep 10% in this yr. no claim in next yr

Agrees with Roopali Kadam

Prakash Mali (Artical Assistant) (166 Points)
Replied 28 June 2011

ur 1st case- Hw it is possible that depri @ 100% yaar .......... pls think on it?

If 100% is to be write off than it ll be consumable goods not a assets for block ok.

& in second case additional dep will be allowed for the year @ 20% if it is a manufacturing company alongwith normal dep at applicable rate of the block.........

kamal kishor sen (STUDENT Rajasthan) (2156 Points)
Replied 28 June 2011

Originally posted by : Prakash Mali
	ur 1st case- Hw it is possible that depri @ 100% yaar .......... pls think on it? If 100% is to be write off than it ll be consumable goods not a assets for block ok. & in second case additional dep will be allowed for the year @ 20% if it is a manufacturing company alongwith normal dep at applicable rate of the block.........

180 days rule be followed , in additional depericiation also .

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 28 June 2011

Mr Prakash Mali thanks for reply

in the problem it is given normal depreication is 100% for new plant

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 28 June 2011

1 ) no you cannot provide additional depreciation

2 ) in second case you can provide additional dep if you are satisfying all the conditions of the said act

CA Shiv (Business Controller) (2987 Points)
Replied 28 June 2011

1) I think you should claim additional depreciation if there are assets in the block. Because there is nothing mentioned in IT act.

@ Prakash Sir: 100% depreciation available on Air pollution control equipments; water pollution control equipments;
solid waste control equipments, recycling and resource recovery
systems; (being annual publications) owned by assessees
carrying on a profession or books (may or may not be annual
publications) carrying on business in running lending libraries.

2) Additional depreciation 10% only. You cannot take balance of 10% next year......

1 Like

Anvesh Desai (Chartered Accountant) (156 Points)
Replied 28 June 2011

Dear Sivaram I would like to answer your questions as below

With respect to the que 1- You absolutely cannot claim additional depreciation on a plant which is depreciable @ 100% as term 'eligible plant and machinery ' specifically excludes such asset..

it is confirmed...okay..

W.r.t your 2nd que- you can claim depreciation at HALF Rate if asset is put to use for less than 180 days.

Further you cannot carry forward the balance unclaimed 10% to next year...no such condition in act..

Bt please note that assessee must be engaged in manufacture/production of article or a thing can only to claim additonal depreciation....

1 Like

Rushi (Practice) (160 Points)
Replied 28 June 2011

u can take addittional depreciation @ 10% in the cuurent year. In next year u r not entitled to claim addittional depreciation

Aparna Raja K.C (Student) (520 Points)
Replied 28 June 2011

Originally posted by : Anvesh Desai
	Dear Sivaram I would like to answer your questions as below With respect to the que 1- You absolutely cannot claim additional depreciation on a plant which is depreciable @ 100% as term 'eligible plant and machinery ' specifically excludes such asset.. it is confirmed...okay.. W.r.t your 2nd que- you can claim depreciation at HALF Rate if asset is put to use for less than 180 days. Further you cannot carry forward the balance unclaimed 10% to next year...no such condition in act.. Bt please note that assessee must be engaged in manufacture/production of article or a thing can only to claim additonal depreciation....

Agreeee :) <am to lazy to type the same>

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 28 June 2011

Originally posted by : Roopali Kadam
	1. NO addl depn(wait for other members comment) bcoz block will become nil after normal depn 2.addl dep 10% in this yr. no claim in next yr

AGREED