Where machinery or plant, in the case of which any of the events mentioned in section 288(1) has occurred, is replaced by the owner of the machinery or plant and a balancing charge is to be made on that owner by reason of that event, or but for this section a balancing charge would have been made on that owner by reason of that event, then, if by notice in writing to the inspector that owner so elects, the following provisions shall apply:
(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,
(ii) no initial allowance, no balancing allowance and no wear and tear allowance shall be made in respect of the new machinery or plant or the expenditure on the provision of the new machinery or plant, and
(iii) in considering whether any, and if so what, balancing charge is to be made in respect of the expenditure on the new machinery or p
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