Section 7 in The Kerala Agricultural Income Tax Act, 1991
7. Depreciation and investment allowance.
(1)In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used by him for the purpose of deriving the agricultural income the following deductions shall subject to the conditions hereinafter provided be allowed: -(i)such percentage on the written down value of the building, machinery, plant or furniture, as may, in any case or class of cases be prescribed;(ii)where the building has been newly erected or the machinery or plant has been newly installed, a further sum subject to such conditions as may be prescribed:Provided that if the building erected or machinery or plant installed, was not put to use in the year of erection or installation, the further deduction under this clause shall be allowed in the year in which such assets were first put to use:Provided further that the above deductions shall be allowed only if the prescribed particulars have been furnished and the aggregate of all such allowances shall, in no case exceed the original cost to the assessee, of the buildings, machinery, plant or furniture; as the case may be.Explanation: - I. "Plant" includes vehicles and scientific apparatus.II. "Written down value" means-(i)in the case of assets acquired in the previous year, the actual cost to the assessee;(ii)in the case of assets acquired as replacement of the old one, the value realised on the sale of the old asset shall be deducted from the value of the asset acquired; and(iii)in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciations actually allowed to him under this Act or under the Agricultural Income Tax Act, 1950. III. Machinery, plant or furniture obtained by the assessee under hire purchase agreement shall be deemed to be assets owned by the assessee.(2)For assets acquired under the hire purchase system, the depreciation including the initial depreciation provided under subsection (1) shall in no case exceed the installments paid to the seller under the hire purchase system.(3)In the case of assets partly used for agricultural purposes and partly for non-agricultural purposes, the Agricultural Income Tax Officer may allow depreciation in proportion to the use of the asset for agricultural purposes, as he may determine.(4)No deduction under this section shall be made in respect of any asset if any depreciation on the asset is claimed and allowed under the Income Tax Act, 1961 (Central Act 43 of 1961).(5)In respect of a machinery or plant specified by the Government by notification in the Gazette which is owned by the assessee and is wholly used by him for the purpose of deriving agricultural income there shall be allowed a deduction, in respect of, the previous year, in which the machinery or plant is first put to use, a sum by way of investment allowance equal to ten per cent of the actual cost to the assessee of the machinery or plant:Provided that(a)the machinery or plant is a new machinery or plant acquired by the assessee;(b)the particulars specified in the notification by the Government have been duly furnished by the assessee:Provided further that no deduction shall be allowed under this sub-section in respect of-(a)any machinery or plant installed in any office premises or accommodation including any accommodation in the nature of a Guest House;(b)any office appliances or road transport vehicles:Provided also that if the machinery or plant in respect of which investment allowance is made under this sub-section is sold or otherwise transferred by the assessee to any person at any time before the expiry of five years from the end of the previous year in which it was first put to use whether during the continuation of agricultural operation or after the cessation thereof, the investment allowance made in respect of such machinery or plant shall be treated as the income of the assessee for the previous year in which such machinery or plant is sold or otherwise transferred.
