(1) This section applies to an entity if:
(a) the entity can deduct amounts for a * depreciating asset under Division 40 or 328; and
(b) the entity has an * increasing adjustment that arises under Division 129 or 132 of the * GST Act in an income year that relates directly or indirectly to the asset.
(2) The entity can deduct the amount of the * increasing adjustment for the income year.
(3) However, the entity cannot deduct the amount to the extent (if any) that the adjustment arises from an increase in the extent to which the activity giving rise to the adjustment is of a private or domestic nature.