Supreme Court · 1991 INSC 194 · Decided 14 August 1991

Vania Silk Mills (P) LTD. v. Commissioner of Income-Tax, Ahmedabad

Court
Supreme Court of India
Citation
1991 INSC 194 · [1991] 3 S.C.R. 577
Case number
CIVIL APPEAL No. 1106/1976
Decided
14 August 1991
Bench
K.N. SINGH, P.B. SAWANT (2-judge bench)
Outcome
Appeal(s) allowed
Case type
Civil
Acts & sections cited
Income Tax Act Section 2(47), 41(2), 45

Headnote

B Income Tax Act, 1961: Ss. 2(47), 41(2), 45-Capital asset- Destruction of-Money received as insurance claim-Nature of- Whether chargeable to capital gains tax. The appellant company purchased machinery worth Rs.2,81,741 c in the year 1957 and gave it on hire to another company which insured the damage to the machinery of the appellant. On a settle- ment of the insurance claim the lendee company paid to the appellant a snm of Rs.6,32,533 on account of the destruction of its machinery. The difference between the actual cost of the machinery and its written D down valne worked out to

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