Where any person receives at any time during the previous year any money or other assets, from insurer under a contract of insurance as a result of damage to or destruction of any capital asset caused by
(a) Natural calamity such as flood, earthquake, cyclone, typhoon etc., or
(b) Civil disturbance or riots, or
(c) Enemy action (whether there is war or not),
any profit or gain from receipt of such money or other asset, shall be chargeable to tax as capital gain as income of the previous year in which such amount or other asset is received.
For the purposes of section 48 full consideration will mean amount of money received or fair market value of the asset on the date of such receipt.
Deemed Transfer [Section 45(2)]
In case a capital asset is converted into stock-in-trade, or is treated as stock-in-trade by the assessee it will be deemed to have been transferred. The difference between market value and the cost price shall be taxable as capital gain under this head.