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WHETHER CAPITAL GAIN OR BUSINESS INCOME

This query is : Resolved 
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(Querist)
29 June 2009 ABC LTD. IS A MANUFACTURING CO. AND HAS PLANT & MACHINERY OF WHICH WDV (INCOME TAX)AS ON 1.04.2008 IS RS. 25 CRORES. DURING THE F.Y. 2008-09 A FIRE BROKE OUT IN ONE OF ITS MANUFACTURING UNIT RESULTING IN LOSS OF PLANT & MACHINERY WORTH RS. 50 LACS AND CURRENT REPLACEMENT COST OF THE DAMAGED P & M IS RS. 90 LACS. THE COMPANY HAS INSURANCE COVER OF RS. 5 CRORE FOR SUCH LOSSES. THE COMPANY CLAIMS RS. 90 LACS FROM INSURER TOWARDS THE LOSS. THE INSURER SETTLES THE CLAIM FOR RS. 65 LACS.

NOW MY QUERY IS THAT WHETHER RS 15 LACS (65 LACS - 50 LACS) IS TAXABLE AS CAPITAL GAIN OR AS BUSINESS INCOME.

PLEASE ANSWER ELABORATELY.
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CA.Tarun Maheshwari

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CA.Tarun Maheshwari (Expert)
29 June 2009 As per Section 45(1A) Rs. 15 Lacs should be taxable under Capital Gain.
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CA. Gurdeep Singh Chawla

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CA. Gurdeep Singh Chawla (Expert)
29 June 2009 Capital gain
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C A Anjani Kumar mundhra

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C A Anjani Kumar mundhra (Expert)
29 June 2009 As per Section 45(1A) Rs. 15 Lacs should be taxable under Capital Gain.
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CA Kartik Pandya

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CA Kartik Pandya (Expert)
29 June 2009 yes Mr. garg you must consider Rs.15lac as CG.
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