1997 (2) TMI 8 - SC - Income Tax

Assets destroyed by fire - compensation received - held that excess of compensation over the list of assets is taxable as capital gains under section 45

Summary

The Supreme Court allowed the appeals by the assessees regarding compensation received from insurers under fire insurance policies. The High Court had ruled against the assessees, but the Supreme Court overturned this decision based on a previous case law stating that no transfer for capital gains tax purposes occurs when an insurance company pays for total loss or damage of property. The appeals were allowed in favor of the assessees.