Report No. 12
32. Depreciation. -
(1) In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business, profession or vocation, the following deductions shall, subject to the provisions of section 34 [section re: conditions for depreciation], be allowed-
(i) in the case of ships other than ships ordinarily plying on inland waters, such percentage (for each completed month of user) on the original cost thereof to the assessee as may in any case or class of cases be prescribed;
[Section 10(2)(vi), first para., part]
(ii) in the case, of buildings, machinery, plant or furniture, other than ships covered by clause (i), such percentage (for each completed month of user) on the written down value thereof as may in any case or class of cases be prescribed;
[Section 10(2)(vi), first para., part]
(iii) in the case of buildings newly erected or machinery or plant being new which has been installed, after the 31st day of March 1948, a further sum... equal to the amount deductible under clause (i) or (ii), allowable for five consecutive previous years, including the previous year of erection or installation.
[Section 10(2)(via), part]
Explanation.-For the purposes of clause (iii), any extra deduction for double or multiple shift working of the machinery or plant admissible under clause (ii) shall be ignored.
[Section 10(2)(via), part]
(iv) in the case of any building, machinery or plant which is sold or discarded or demolished or destroyed in the previous year, the amount by which the moneys received in respect of such building, machinery, or plant, together with the amount of scrap value, if any, fall short of the written down value thereof, provided such deficiency is actually written off in the books of the assessee.
[Section 10(2)(vii), first para] [Section 10(2)(vii), 1st Proviso]
Explanation.-For the purposes of this clause, the "moneys received" in respect of any building, machinery or plant shall include-
(a) any insurance, salvage or compensation moneys received in respect thereof;
[Section 10(2)(vii), 3rd proviso, modified]
(b) where the building, machinery or plant is sold, the price for which it is sold, whether such price has been actually realised or not.
(2) Where, in the assessment of the assessee, (or, if the assessee is a registered firm or an unregistered firm assessed as a registered firm, in the assessment of its partners) full effect cannot be given to any allowance under clause (i) or (ii) of sub-section (1) [10(2)(vi), main para.] in any previous year owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sections 73(3) and 74(3) [Sub-section (3) of main Section re:
set off in business], the allowance or part of the allowance to which effect has not been given as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for succeeding previous years.....
[Section 10(2)(vi), Proviso (b), part]
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