Section 11 - Amendment of Section 54B - Finance Act, 1978

11. Amendment of Section 54B Section 54B of the Income-tax Act shall be renumbered and shall he deemed to have been renumbered with effect from the 1st day of April, 1974, as sub-section (1) thereof and, - (a) in sub-section (1) as so renumbered, after the words used by the assessee or a parent of his for agricultural purposes , the brackets and words (hereinafter referred to as the original asset) shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1974; (b) after sub-section (1) as so renumbered, the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1974, namely :- (2) Where the transfer of the original asset is by way of compulsory acquisition under any law and the compensation awarded for such acquisition is enhanced by any court, tribunal or other authority, then, (a) so much of the capital gain, computed under section 48 by taking compensation as so enhanced as the full value of the consideration received or accruing as a result of such transfer, as is not excluded under sub-section (1) from being charged to tax under section 45, or (b) the capital gain attributable to the enhancement of the compensation, whichever is less (that which is less being hereinafter referred to as the unadjusted capital gain), shall if the assessee has within a period of two years after the date of receipt of the additional compensation purchased any land for being used for agricultural purposes (hereinafter referred to as the relevant asset), be dealt with in the following manner that is to say, - (i) if the amount of the unadjusted capital gain is greater than the cost of the relevant asset, the difference between the amount of the unadjusted capital gain and the cost of the relevant asset shall be charged under section 45 as the income of the previous year in which the transfer took place; and for the purpose of computing in respect of the relevant asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the unadjusted capital gain is equal to or less than the cost of the relevant asset, the unadjusted capital gain shall not be charged under section 45; and for the purpose of computing in respect of the relevant asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced by the amount of the unadjusted capital gain. .