100. Where any sum paid as insurance premium is allowable as an expense incurred in the production of profits or income form any trade, business, profession or vocation, any sum realized under such contract of insurance shall be deemed to be-
| (a) a receipt from such trade, business, profession or vocation, if the sum so realized is in respect of stock in trade or loss of profits or any other sum not referred to in sub-paragraph (b) or sub-paragraph (c); |
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| (b) an amount realized from the disposal of property, if the sum so realized is in respect of a capital asset on which an allowance for depreciation, within the meaning of subsection (7) of section 25, has been granted and accordingly, the provisions of subsection (3) of that section shall apply to, and in relation to, that amount; |
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| (c) a receipt of a capital nature if the sum so realized is in respect of a capital asset on which an allowance for depreciation within the meaning of subsection (7) of section 25 has not been granted: |
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Provided that the provisions of paragraph (b) and paragraph (c) shall not be applicable if the sum realized is in respect of a capital asset which is replaced, and in such event the deduction for depreciation in accordance with the provisions of paragraph (a) of subsection (1) of section 25, shall be computed on the cost of replacement of such capital asset, less the amount realized under a contract of insurance. |
Sri Lanka Consolidated Acts