Applicability of Income tax on excess insurance

This query is : Resolved

Vinod (Querist)
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25 May 2020 Sir,

We purchased a car during F.Y-2017-18 for Rs. 14,00,000/- (approx). After completion of the year the depreciated value of the car is Rs.13,05,000/- (As per Company act) in books during F.Y. 2018-19. This car stolen during the first quarter of F.Y. 2018-19 and we claimed insurance. We got the claim during 3rd quarter of F.Y.2018-19 for Rs. 14,00,000/- (full value of the vehicle). We adjusted the book entry by reducing the depreciated amount from gross block against insurance claim. Apparently, during finalization of F.Y.2018-19, we reduced the excess amount of insurance claim received ( 1400000-1305000=95000/-) from our taxable income along with Dep. as per Income tax. But CPC added back this amount to our taxable income and calculated tax on it in our Intimation u/s. 143(1).

Please clarify how to rectify this.

Thanks