1984 (12) TMI 45

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....paid to the tenant from the computation of capital gains ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in not agreeing with the Department's contention that the tenant's right purchased for Rs. 15,000 by the assessee formed a distinct asset, the transfer of which gave rise to short-term capital gains ? " The reference arises out of an order of assessment made on the assessee, an individual, for the assessment year 1976-77. The accounting year ended on March 31, 1976. The land belonging to the assessee was acquired by the Government. He received the entire compensation inclusive of the customary share which a tenant is ordinarily entitled to out of such compensation.....

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....ull value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: (i) expenditure incurred wholly and exclusively in connection with such transfer ; (ii) the cost of acquisition of the capital asset and the cost of any improvement thereto." There is no difficulty in accepting the claim of the assessee in regard to the legal expenses. The assessee undisputedly incurred legal expenses amounting to Rs. 5,500 for obtaining compensation for compulsory acquisition of his land. It can, therefore, be properly considered as an expenditure incurred wholly and exclusively in connection with such transfer under section 48(i). No assessee could be denied the legal expenses incurr....