Dear Gangadhar, The property which is sold earlier, if cancelled (in your words) or repurchased, in my opinion, here two separate transactions have occurred, one i.e. for sale of property on which capital gain will be calculated and CG tax will be paid thereon, and the second i.e. for purchasing again where the sale price of previous transaction of the same property will be treated as the cost of acquisition of the same property..... This is the possible answer of such query to the best of my knowledge.....