If the recipient so claims, receipt of a capital sum1 derived from an asset which is not lost or destroyed is not treated as a disposal of the asset if:
(1) the capital sum is wholly applied in restoring the asset;
(2) the capital sum is so applied except for a part which is not reasonably required for the purpose and which is small as compared with the whole capital sum; or
(3) the amount of the capital sum is small, as compared with the value of the asset2.
If under this provision the receipt is not treated as a
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