LOSS ON FIRE INSURANCE CLAIM

chandraprakash (C.A.) (52 Points)

23 December 2008  

A company has lodged fire cliam of Rs. 1,30,000/- on 20/03/2008 for loss of Stock on 15/03/2008. For finalisation of accounts claim of Rs. 1,30,000/- is shown as Insurance Claim Receivalble. The claim is settled for Rs. 74,000/- on 20/09/2008. The amount of loss of Rs. 56,000/- is debited to Loss by fire Account. My query is that Loss by fire will be allowed in Income Tax or not. if Yes under which section or relevant case laws. Thanks in advance.