Judgement

SUBBA RAO, J.:- The Income-tax Appellate Tribunal Calcutta Bench, referred the following question under S. 66 (1) of the Indian Income-tax Act, 1922, hereinafter called the Act, for the decision of the High Court of Calcutta:

"Whether on the facts and in the circumstances of this case the sum of Rupees 27,06,593 was assessable as a profit of the assessee company of the previous year relevant to the assessment year 1949-50 in accordance with the fourth proviso to Section 10 (2)(vii) of the Indian-tax Act."

2. The facts leading up to the said reference may briefly be stated. Messrs Moon Mills Ltd., the respondent herein, hereafter referred to as the Company, is a joint stock limited company and it owns a factory at Bombay. On August 6, 1948, a fire broke out in the factory premises of the assessee resulting in the destruction of the stock-in-trade, machinery and buildings. The assets of the Company were covered by several insurance policies, issued by the General Assurance Society Ltd. in respect of (i) general specification policies, (ii) specific stock policies, and (iii) consequential loss policies, for an aggregate sum of Rs. 1,48,92,390. The Company received Rs. 65 lakhs