Assessee was carrying on business of breeding, rearing and selling racehorses. Assessee treated horses as stock-in-trade till age of 2 years and thereafter they were treated as capital assets. During relevant year, two mares died and assessee received insurance claim for death of mares. Assessing Officer held that insurance claim received by assessee from insurance company for death of mares was to be deemed as income of assessee under section 41(1).CIT(A) and Tribunal up held the order of the AO. On appeal the court held that    revenue itself treated horses as capital assets and consequently, insurance receipt would become capital gain for assessee, thus, money received towards insurance claim on account of damage to or destruction of capital asset could not be treated as transfer of capital assets so as to attract tax under provisions of section 45(1). Court held that  heading ‘capital gains’ governed by provisions of section 45 was mutually exclusive from heading ‘profits and gains of business or profession’ governed by section 41  hence insurance receipts is capital receipt. Order of Tribunal set aside.(AY.1988-89, 1990-91, 1991-92 & 1995-96)