assessee's lands were acquired by Government of Tamil Nadu under Tamil Nadu Land Acquisition Act. compensation awarded by Land Acquisition Officer (LAO) was enhanced by civil court. expenditure incurred by way of legal charges was claimed as deductible in computing capital gain. ITO disallowed claim on ground that they are not incurred wholly and exclusively in connection with such transfer. Accordingly, he computed capital gain. 2. assessee appealed to Commissioner (Appeals). In original grounds of appeal ground relating to deduction of legal expenditure was not taken. But that ground was taken by way of additional ground which was admitted by Commissioner (Appeals). Dealing with additional ground on merits, he held that sum of Rs. 58,064 being legal expenditure incurred in connection with determination of compensation is allowable deduction in computing capital gain. Accordingly, he directed ITO. Against same, revenue has preferred this appeal. 3. In grounds it is urged that Commissioner (Appeals) erred in admitting additional ground. We are unable to agree with this submission. Firstly, claim for deduction of legal expenses of Rs. 58,064 was urged before ITO but it was not taken in original grounds of appeal. Hence, it was raised by way of additional ground. Commissioner (Appeals) was perfectly justified in admitting additional ground. 4. learned departmental representative submitted that sum of Rs. 58,064 being legal expenses in connection with determination of compensation is not allowable deduction under section 48 of Income-tax Act, 1961 ('the Act'). Commissioner (Appeals) was not justified in allowing same. learned counsel for assessee supported order of Commissioner (Appeals). 5. We have considered rival submissions. Any profit or gain arising from transfer of capital asset effected in previous year shall be chargeable to income-tax under head 'Capital gains'. Section 48 deals with mode of computation and deductions. It reads as under: "48. Mode of computation and deductions.--The income chargeable under head 'Capital gains' shall be computed by deducting from full value of consideration received or accruing as result of transfer of capital asset following amounts, namely:-- (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) cost of acquisition of capital asset and cost of any improvement thereto." Under above provision, expenditure incurred wholly and exclusively in connection with such transfer and cost of acquisition of capital asset and cost of improvement thereto is allowable as deduction from full value of consideration received. question for consideration is whether legal expenditure incurred by assessee in respect of determination of compensation in civil court is allowable deduction under section 48. In our view claim of assessee is allowable. Under section 48 expenditure incurred wholly and exclusively in connection with transfer is allowable deduction. compensation awarded by LAO was not accepted by assessee and matter was carried in reference to civil court where compensation awarded was enhanced. Enhanced compensation granted by civil court has been taken as amount received for transfer of asset and, accordingly, capital gain was computed. Once amount received on account of enhancement of compensation by civil court is taken as value received by assessee, legal expenditure incurred by assessee for getting compensation enhanced in civil court is allowable deduction as said expenditure has been incurred in connection with compensation of asset transferred. It is well settled that it is only upon final determination by competent court under Land Acquisition Act, 1894, acquisition proceedings come to end. This is well settled by decision of Supreme Court in Raja Harish Chandra Raj Singh v. Dy. LAO AIR 1961 SC 1500. Once reference is made to civil court litigation proceedings therein are intimately connected with acquisition proceedings. All expenditure incurred in connection with such litigation in civil court is expenditure within meaning of section 48 as it is expenditure wholly incurred in connection with compulsory acquisition proceedings. Thus, in our view, sum of Rs. 58,064 claimed as legal expenditure incurred in litigation in civil court for getting compensation enhanced is allowable expenditure as it is incurred wholly in connection with acquisition proceedings. 6. In V.A. Vasumathi v. CIT [1980] 123 ITR 94 Kerala High Court considered question whether legal expenditure incurred in civil court subsequent to award in connection with enhancement of compensation is allowable expenditure. Kerala High Court held that where reference is made under section 20 of Land Acquisition Act, litigation which results therefrom is proceeding intimately and intrinsically connected with acquisition and all expenditure wholly and exclusively incurred in connection with such litigation is, therefore, expenditure within meaning of section 48. above decision was again approved by same Court in CIT v. Dr. P. Rajendran [1981] 127 ITR 810. It was held by Division Bench of Kerala High Court that compulsory acquisition of property under Land Acquisition Act has to be treated as transfer for purposes of computation of capital gain. In case where matter is taken to civil court by way of reference under section 20 of Land Acquisition Act, fixation of quantum of consideration for transfer is finally effected only by decision rendered by civil court and such fixation forms integral part of process of transfer by way of compulsory acquisition provided by Land Acquisition Act. It was held that expenditure incurred by assessee in conducting land acquisition reference proceedings before civil court cannot, therefore, but be regarded as expenditure wholly and exclusively incurred in connection with transfer. In CIT v. A. Venkataraman [1982] 137 ITR 846 Madras High Court held that amount paid to tenants to get vacant possession of land which has been sold is expenditure incurred wholly and exclusively in connection with agreement of sale which preceded transfer and in fulfilment of condition of sale and said expenditure incurred is allowable deduction under section 48 in computing capital gains. ratio laid down in above decisions squarely applies to instant case. 7. In Miss Dhun Dadabhoy Kapadia v. CIT [1967] 63 ITR 651 Supreme 7. In Miss Dhun Dadabhoy Kapadia v. CIT [1967] 63 ITR 651 Supreme Court observed that in working out capital gain or loss principles that have to b e applied are those which are part of commercial practice or which ordinary man of business will resort to when making computation for his business purposes. In CIT v. Mohanbhai Pamabhai [1973] 91 ITR 393 Gujarat High Court dealing with section 45 of Act held that object of charging provision is to tax 'profits or gains' and this expression means real or net profits or gains. ratio laid down in above cases squarely applies to instant case. legal expenditure incurred in litigation before civil court in connection with enhancement of compensation awarded by LAO is allowable expenditure under section 48 while computing capital gains. Commissioner (Appeals) was perfectly justified in directing ITO to allow sum of Rs. 58,064 as deduction in computing capital gains. 8. In result, appeal fails and is dismissed. *** INCOME TAX OFFICER v. UNITED BREWERIES LIMITED