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TMI BlogDepreciationX X X X Extracts X X X X X X X X Extracts X X X X ..... uired by the assessee after the 28th day of February, 1975 7 [ but before the 1st day of April, 2001 ], unless it is used- ( i ) in a business of running it on hire for tourists ; or ( ii ) outside India in his business or profession in another country; and ( b ) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42 : ] 8 [Provided further that where an asset referred to in clause ( i ) or clause ( ii ) 9 [ or clause ( iia ) ] , 29 [or the first proviso to clause (iia)] as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause ( i ) or clause ( ii ) 10 [ or clause ( iia ) ] , as the case may be :] 30 [ Provided also that where an asset referred to in clause (iia) or the first proviso to clause (iia), as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in 27 [clause (xiii), clause (xiiib) and clause (xiv)] of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them .] 14 [ Explanation 1. - Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or plant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1 st day of April, 2020 in the said backward area, then, the provisions of clause (iia) shall have effect, as if for the words twenty per cent. , the words thirty-five per cent. had been substituted. ] 31 [Provided further] 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; ] 19 [ ( iii ) in the case of any building, machinery, plant or furniture in respect of which deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the 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 the succeeding previous years. ] ************************** Notes :- 1. Substituted for the opening portion beginning with the words In respect of depreciation of buildings, machinery, plant or furniture owned, wholly or partly, and ending with the words and figures section 34, be allowed- by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, the quoted portion, as amended by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997, read as under : In respect of depreciation of buildings, machinery, plant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated at the percentage prescribed under this clause in the case of block of assets comprising such asset : 9. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. 10. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. 11. Inserted by the Income-tax (Second Amendment) Act, 1998, w.e.f. 1-4-1999. 12. Inserted by the Taxation Laws (Amendment) Act, 1991, w.e.f. 15-1-1991. 13. Fifth proviso substituted by the Finance Act, 1999, w.e.f. 1-4-2000. Prior to its substitution, fifth proviso, as inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 and later on amended by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999, read as under : Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible asset or know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession, referred to in clause (xiii) and clause (xiv) of section 47 or section 170 or the amalgamating company and the amalgamated company in the case of amalgamation, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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: Provided also that no deduction shall be allowed under clause (A) or, as the case may be, clause (B), of the first proviso unless the assessee furnishes the details of machinery or plant and increase in the installed capacity of production in such form, as may be prescribed along with the return of income, and the report of an accountant, as defined in the Explanation below sub-section (2) of section 288 certifying that the deduction has been correctly claimed in accordance with the provisions of this clause. Explanation .-For the purposes of this clause,- (1) new industrial undertaking means an undertaking which is not formed,- (a) by the splitting up, or the reconstruction, of a business already in existence; or (b) by the transfer to a new business of machinery or plant previously used for any purpose; (2) installed capacity means t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as unabsorbed depreciation allowance), as the case may be,- (i) shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ; (ii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i), the amount not so set off shall be set off from the income under any other head, if any, assessable for that assessment year; (iii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and- (a) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ; (b) if the unabsorbed depreciation allowance cannot be wholly so set off, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the following assessment year not being more than eight assessment years immediately succeeding the assessment year for which the aforesaid allowance was first computed : Provided that the time limit of eight assess ..... 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