Capital gain->section 45(2) related to section 54b

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Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2018 I had a agricultural land in city limits. I converted(into plots) my agricultural land into stock in trade and sold such plots.
Capital gain due to conversion of land into stock in trade was invested as per Section 54b. I purchased new agricultural land with whole capital gain.
Does my investment as per Sec 54B is in line with income tax act or ITO will disqualify such investment.?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 April 2018 you reinvested which amount - the amount earned from selling the plots?

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Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2018 On the date of conversion, developer paid me advance amount. Out of such advance I computed CG on my agricultural land and deposited in capital gains savings account with SBI. Later, with such amount in CGa/c I bought another agricultural land.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 April 2018 in my opinion, the money you received is for the Non-Agricultural Land. I could be wrong and hence, leaving the query open for other experts.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2018 You are right Mr Nikhil the agricultural land is converted as plots and sold hence it is not a sale of agricultural land hence 54B exemption not available for purchase of another agricultural land.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2018 THANK You SIR CA R SEETHARAMAN and Nikhil kaushik

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 April 2018 you are most welcome....

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2018 Welcome...............

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