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2014 (12) TMI 181 - GUJARAT HIGH COURTTaxability of compensation received appellant from the Insurance Company on account of destruction of Wind Mill u/s 50 – Held that:- In Neelamal Agro Industries Limited vs. CIT [2002 (8) TMI 57 - MADRAS High Court] similar matter has been discussed and it has been held that when a thing was destroyed by fire the capital asset was no longer available for being owned, used or enjoyed by anyone - with the destruction of the asset, the rights of the assessee in that asset also would be destroyed - The destruction of such rights in an asset consequent upon the assets ceasing to exist was a situation which was not contemplated either in the definition of "transfer" or in the charging section and therefore the assessment as capital gains liable to tax arising out of the compensation amount received under the insurance on account of damage was not valid in law – u/s 50 it has been provided that where the capital asset is an asset in respect of which a deduction on account of depreciation u/s 32(1) (i) has been obtained by the assessee in any previous year, the provisions of sections 48 and 49 shall apply subject to the modification that the written down value as defined in clause (6) of section 43 of the asset as adjusted shall be taken as the cost of acquisition of the asset. Applicability of provisions of section 41(2) – Held that:- The Tribunal committed an error in applying provisions of section 41(2) of the Act - section 41 was amended to provide for computation of depreciation and also the amount chargeable to income tax when such an asset is sold, discarded, demolished or destroyed in the previous year – Decided in favour of assessee.
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