https://www.taxtmi.com/caselaws?id=38981 The Gujarat HC ruled that insurance proceeds of Rs. 3,50,792 received by the assessee for destroyed machinery constituted taxable capital gains under Section 45 read with Section 2(47) of the Income-tax Act, 1961. The court held that the transaction resulted from extinguishment of the assessee's proprietary rights in the machinery, not from satisfaction of a distinct right to compensation. The HC rejected the argument that bailees acted as agents while insuring the machinery, finding no evidence of agency relationship. The court determined that despite reinstatement clauses in insurance policies, the contract remains one to pay money. The Tribunal had erred in holding there was no transfer of capital asset within the statutory meaning. Both questions were answered in favor of revenue authorities. en-us Fri, 23 Jan 1976 00:00:00 +0530 Mon, 21 Jul 2025 15:42:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38981 The Gujarat HC ruled that insurance proceeds of Rs. 3,50,792 received by the assessee for destroyed machinery constituted taxable capital gains under Section 45 read with Section 2(47) of the Income-tax Act, 1961. The court held that the transaction resulted from extinguishment of the assessee's proprietary rights in the machinery, not from satisfaction of a distinct right to compensation. The HC rejected the argument that bailees acted as agents while insuring the machinery, finding no evidence of agency relationship. The court determined that despite reinstatement clauses in insurance policies, the contract remains one to pay money. The Tribunal had erred in holding there was no transfer of capital asset within the statutory meaning. Both questions were answered in favor of revenue authorities. Case-Laws Income Tax Fri, 23 Jan 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38981