capital gain

1. According to sec 54 exemption will be available if the consideration from the sale of residential property is used to purchase another residential property within a period of 1 year before or 2 years after or in case of construction of residential property within a period of 3 years from the date of transfer. 
2. In your case, if the sale consideration is utilized for acquiring a new residential property within a period of 2 years after the same of the residential property then to the extent of such investments, exemption u/s 54 will be applicable. 
3. In that case, there will not be any capital gains to the extent of investments in new residential property.  
Please correct me if the above solution has an alternative view.