CHAPTER 75:01 - Inland Revenue Division

Income Tax Act Mac 1
Vol. 1
(2) In computing the allowance applicable to several items in a class
specified in the Seventh Schedule, the wear and tear percentage relating to
that class shall be applied against the aggregate expenditure incurred in
acquiring the several plant and machinery or buildings housing such plant
and machinery within that class.
33a (2A) In computing the allowance applicable to the items in a class specified
in the Seventh Schedule -
(a) the value of the plant or machinery acquired in a year of income
shall be added to the written down value of the plant or machinery;
(b) the value of the plant or machinery disposed of in a year of
income shall be deducted from the written down value of the plant or
machinery so however, that in the case of -
(i) a sale of plant or machinery, the amount deducted shall
be the proceeds of sale of the plant or machinery; and
(ii)
loss or destruction of plant or machinery, the amount
deducted shall be the money received by way of
insurance or compensation;
(c) where the plant or machinery is used both for business and
private purposes, the pool shall be debited with the proportionate
cost of the asset equivalent to its business use and where the asset is
disposed of, the pool shall be credited with the same percentage
applied to the proceeds of disposal up to the original cost of the
asset;
(d) the value of plant or machinery brought into the business from
private use shall be the market value of the plant or machinery;
(e) where plant or machinery used for business purposes is
appropriated for private use, the pool shall be credited with the
market value of the plant or machinery so appropriated;
(f) in the case of any other event resulting in the cessation of interest
in any plant or machinery the amount deducted from the pool shall
be the market value of such plant or machinery;
(g) where plant or machinery is sold and the buyer and the seller are
associates, the disposal value of the said plant or machinery shall be
its market value;
(h) in no event shall the amount credited to the pool exceed the
original cost of the said plant or machinery.
BIR Mac Edition 91/01 Page 29