The assessee had sold one of its registered trademark for certain consideration and paid VAT to State Government on sale consideration . Since VAT was paid wholly and exclusively in connection with ‘transfer’ of trademark, said amount was claimed as deduction under S. 48 of the Act . AO  held that cost of such capital asset was to be deemed as ‘NIL’ and, therefore, expenditure on VAT could not be allowed as deduction while computing capital gains. CIT (A) deleted the addition . Tribunal held that  since assessee had to mandatorily pay statutory levy at time of ‘transfer of intangible to transferee, said expenditure was incurred wholly and exclusively in connection with transfer of capital asset and was allowable as deduction. (AY. 2008 -09)