Quiz for the week (18 Sep 2023) :
Lokesh (age 53) engaged in the business of technical consultancy sold a vacant land on 5th April, 2021 for Rs.40 lakhs and the indexed cost of acquisition of the said land was Rs.6 lakhs. He resides in a property owned by his father and Lokesh does not own any house property. He deposited the amount of Rs.40 lakhs in Capital Gain Deposit Account on 30th June, 2022. He commenced construction of the residential building in August, 2022 and completed the construction in March, 2023. He sold another vacant land for Rs.50 lakhs on 23rd October, 2022 and wanted to construct another residential house along with his brother Mangesh. He deposited the entire sale proceeds in Capital Gain Deposit Account on 30th April, 2023.
Lokesh seeks your advice as regards validity of the sequence of transactions carried out by him. What would be your view in case Lokesh invested the sale proceeds of the second vacant land in construction of the first residential house instead of jointly constructing a residential building with his brother?
Kindly email your answers on or before 23.09.2023