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ROSANİ allowances. Machinery or Plant.
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and charges, Machinery or Plant.
38. (1) Where, in or after the basis period for the year of assessment 1947/48 a person carrying on à trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred an allowance. to be known as an initial allowance" equal to one-fifth of that expenditure.
(2) Where at the end of the basis period for any year of assessment a person has in use machinery or plant for the purpose of his trade, profession or business there shall be made to him in respect of that year of assessment an allowance to be known as an "annual allowance for depreciation by wear and tear of those assets. The allowance shall be calculated at the rates prescribed by the Board of Inland Revenue and shall be computed on the reducing value of the asset, which shall be the original cost of the asset reduced by
(i) any initial allowance granted in accordance with the provisions of this section; and
(i) by the annual allowances made under the provisions of this section,
Provided that----
(i) where the asset was acquired before the basis period in respect of the year of assessment 1947/48 the value at the end of the basis period shall be computed by deducting from the amount paid for the asset by its present owner ammual allowances as if this subsection had been in force during the whole period of ownership of the asset excluding any period during which the owner was deprived of the use of the asset by reason of enemy ocenpation.
(i) the Commissioner may in his discretion allow a higher rate than that prescribed by the Board of Inland Revenue.
39. (1) Where, in or after the basis period for the year of assessment 1947/48, any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or an anmial allowance has been made for any year of assessment to a person carrying on a trade, profession or business, that is to say, either-
(a) the machinery or plant is sold. whether while still in use or not; or
(b) the machinery or plant is destroyed; or
(a) the machinery or plant is put out of use as being worn out or obsolete or otherwise useless or no longer required, and the event in question occurs before the trade, profession or business is permanently discontinued, an allowance or charge, to be known as a "balancing allowance" or a "balancing charge," shall in the circumstances mentioned in this section, be made to or, as the case may be, on that person for the year of assessment in his basis period for which that
event occurs.
(2) Where there are no sale. insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the plant or machinery still unallowed as at the time of the event
exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid or, as the case may be, the EXCESS thereof over the said moneys.
(3) If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall he an amount equal to the excess or, where the said amount still unallowed is nil, to the said moneys.
(4) Notwithstanding anything in the last preceding sub- section, in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts, that is to say-
(a) the amount of the initial allowance, if any, made to him in respect of the expenditure in question:
(b) the amount of the annual allowances, if any, made
to him in respect of the expenditure in question, including any allowance computed under section 38 (2) (ii) at a rate higher than that prescribed by the Board of Inland Revenue.
of Machin. My or Plant.
40. Where machinery or plant in the case of which Replacement any of the events mentioned in subsection (1) of section 30 has occurred is replaced by the owner thereof and a balancing charge falls to be made on him by reason of that event or, but for the provisions of this section, would have fallen to be made on him by reason thereof, then, if by notice in writing to the Commissioner he so elects, the following provisions shall effect, that is to say--
(a) if the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant→→
(i) the charge shall be made only on an amount equal to the difference; and
(ii) no initial allowance, no balancing allowance and no annual allowance shall be made or allowed in respect of the new machinery or plant or the expenditure on the pro- vision thereof; and
(iii) in considering whether any, and, if so, what balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure;
(b) if the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made-
(i) the charge shall not be made; aud
(ii) the amount of any initial allowance in respect of the said expenditure shall be calculated as if the expenditure had been reduced by the amount on which the charge would bave been made; and
(iii) in considering what annual allowance is to be made in respect of the new machinery or plant, there shall be left out of account a proportion of the machinery or plant equal to the proportion which the amount on which the charge would have been made bears to the amount of the said expenditure; and
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