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TMI Blog2008 (12) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... s printing and marketing of labels, bingo tickets, lottery tickets, redemption tickets, wrist bands and other printed products etc. 3. A major fire took place in the factory/office premises of the assessee on 27-7-2003 resulting in substantial loss/damage to stocks, building, plant and machinery, other fixed assets. The assessee company claimed insurance and received the amounts in previous year relevant to assessment year 2005-06. The position of various amounts received, its treatment in the books of account and for tax purposes as considered by the assessee, Assessing Officer and the learned Commissioner (Appeals) is tabulated as under: Amount (Rs.) Treatment in Books Treatment in Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 45(1A) of the Act. He submitted that as per section 45(1A) where any person received at any time during any previous year any money or other asset under an insurance from an insurer on account of damage to or destruction of capital asset, the profits or gains arising from receipt of such money shall be chargeable to income-tax under the head "Capital gain" and shall be deemed to be the income of the previous year in which such money was received. Since the money was received in the next financial year relevant to assessment year 2005-06, at that time the assessee has itself adjusted the amount received against the block of assets, the amount received cannot be taxed as income for the year in which the loss was incurred. 5. The cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other asset was received and for the purposes of section 48, value of any money or the fair market value of other assets on the date of such receipt shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of such capital asset." From the above it is clear that the amount receivable on account of both, i.e., damage to or destruction of any capital asset as a result of various factors including fire is chargeable to tax only in the year of receipt of such money. When the words used are damage to , since the amount receivable against repair cost of machinery and building is because of damage to such machinery and building, the same shall receive the same treatment as considered in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Europe, Australia, Middle East and Asia and USA exceeded 362 lakhs for the year under appeal and 1170 lakhs for the immediately preceding financial year. The assessee considered Middle East and Dubai as potential market and desired to increase its export to this area and hence concentrated efforts were made for which various trips were made by company s officials including director, consultant and manager. The Assessing Officer noted that the director s travel to Dubai and Hong Kong of Rs. 6,57,486 is not wholly and exclusively for the purpose of business. 8. Before the learned CIT(A) it was explained that Middle East and Dubai is potential market to which already exports are being made but in order to strengthen those markets, furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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