Insurance claim

The entry would be :

 Bank a/c               Dr [ for the insurance claim received]

P&L A/c                  Dr [ for the loss in the asset]

To Asset a/c [the book  value of the asset being cancelled off]

The Tax impact would be as per S.45(1A )  where asset is destroyed due to accident or any other unavoidable reasons then the treatment would be:-

1.The difference between amount received and the WDV should be taken and from this amount  the extent of depreciation claimed in ealier years should b treated as PGBP U/s 41(1)

2. The remaining amount afterv depreciation should  be treated as Capital Gain whether short term or long term will be computed on the tym period for which he asset was held by the assessee.