Yes you can do the aforesaid legally 

NRI/ PIO may repatriate the sale proceeds of immovable property in India). 

(a) Firstly, if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels I by debit to ‘NRE I FCNR (B) account, the amount to be repatriated should not exceed the amount paid for the property: 

1. In foreign exchange received through normal banking channel or,
2. By debit to NRE account(foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.

Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year

Yes, and you can take tax benefit in USA also. 

Repatriation of sale proceeds of residential property purchased by NRI/ PIO out of foreign exchange is restricted to not more than two such properties.

Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year.

You can do this repatriation if you held the property for at least 10 years. If you have kept the property for less than 10 years, you can’t repatriate the money immediately. You need to keep the money in your NRO account till it completes 10 year period and then you can transfer. For example, you are selling a property after holding it for 8 years. Then you need to keep the sale proceeds in NRO account for 2 years. After this 2 year period you can repatriate.

USD 1,25,000 per year