Whether capital gain investment option is applicable?

Are you thinking of claiming deduction u/s 54B( sale and purchase of agricultural land)?

If the assessee wants to buy property (land u/s 54B, residential house u/s 54F) from her own partnership firm, in my opinion , as long as she pays the consideration out of the capital gains (sale consideration in case of 54F ) for the purchase, it should not matter.

1.The following case (in a different context) might be relevant.

The Hon’ble Karnataka High Court in the case of DIT (International Taxation) Vs. Mrs. Jennifer Bhide - "Therefore, to attract s. 54 and s. 54EC of the Act, what is material is the investment of the sale consideration in acquiring the residential premises or constructing a residential premises or investing the amounts in bonds set out in s. 54EC. Once the sale consideration is invested in any of these manner the assessee would be entitled to the benefit conferred under this provision. "

2.In the following case the assessee had sold a flat and invested to buy a flat u/s 54 in his own firm M/s. Ashraya Real Estate Developers. Even after not receiving posession of the flat within 2 years due to reasonable cause the deduction was allowed.

Income Tax Appellate Tribunal - Panji: Girish L Ragha, Panaji vs Department Of Income Tax on 8 August, 2014