Capital gains exemption on compulsory acquisition protects industrial undertakings when reinvesting compensation within prescribed period. Exemption under Section 54D applies to capital gains from compulsory acquisition of land or buildings used in an industrial undertaking for at least two years. The assessee must purchase or construct replacement land or building for the industrial undertaking within three years of receiving compensation, or deposit the amount in the Capital Gain Deposit Scheme before filing the return. The exempt amount is the lower of the capital gain or the cost/deposit amount. Transfer of the new asset within three years requires reducing its cost by the exempted capital gain.