Dismissing the appeal of the assessee the Court held that the AO and the appellate authorities had properly analysed the provisions of S.  54B and also the factual aspects. After acquiring the new agricultural land (rural or urban), if the new agricultural land was transferred within a period of three years from the date of the purchase, then the tax exemption allowed earlier (i. e. with respect to the first transaction of sale of urban agricultural land) would be withdrawn. In such a case, the assessee would be required to pay tax on the exemption claimed earlier. If the assessee’s contention was accepted, the very intent and purpose of the beneficial provisions would be defeated and an assessee would sell an agricultural land, invest in a new asset which was not a capital asset (in the assessee’s case the agricultural land in rural area which was not exigible to capital gains tax) and sell the new asset immediately thereafter which process would render section 54B otiose. The entire object of requiring an assessee to hold the land for a particular period would be frustrated. The other contention of the assessee that the capital gains, if any was required to be taxed in the AY. 2006-07 was also untenable. The charge of capital gains was on the transfer effected on December 1, 2003 for which the relevant AY. was 2004-05. The charge was not in respect of the transfer of the new asset. (AY. 2004-05)