Will compensation received from builder attract cgas

What was time period between original purchase agreement and cancellation deed? totally 2 years or 4 years?

First agreement was in Jan 2008 Final settlement and surrender was in Jan 2013. So 5 years.

Kolkata Income Tax Applelate Tribunal in the case of Subhas Chandra Parmanandka (ITA No.1614/Kol/2010) held that income from transfer of right to purchase a flat is taxable as Capital gains. Compensation received over and above the booking amount is equivalent to consideration received on transfer of right to acquire property and is taxable under capital gains.

Also the right if held for more than 36 months will be treated as long term capital gain there by allowing relief from capital gain if invested in residential property.

As you have already invested  the Long term gains for purchase of a residential property & in REC (hope capital Gains bonds u/s. 54EC), there should not be any tax liability left over.

Sir thank you for the kind reply. Not all of the compensation was used for purchase of another flat and REC bond as some was left over. My question is can i deduct litigation expenses from the gain and also expenditure in renovation of the flat?

Yes, any expenses incurred for procurement of the compensation can be deducted, but expenditure of renovation may not be allowed. Secondly, only capital gains (long term), is to be utilized for calculation of exemption u/s. 54 & 54EC.