Transfer of housing society shares treated as transfer of flat rights; section 80T(b)(i) relief applies instead of section 80T(b)(ii).

Surplus from the sale of shares in a co-operative housing society was treated as arising from transfer of the corresponding right or interest in the flat, so the capital gain fell within the relief provision applicable to such transfer. Relief under section 80T(b)(ii) was therefore held to be inappropriate, and the proper relief was under section 80T(b)(i).

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Issues: Whether the surplus realised on sale of shares in a co-operative housing society, together with the rights represented by them in the flat, qualified for relief under section 80T(b)(i) or section 80T(b)(ii) of the Income-tax Act, 1961.

Analysis: The transfer of shares in the co-operative housing society was treated as a transfer of the corresponding right or interest in the flat. On that basis, the capital gain arising from the transfer was to be dealt with under the provision granting relief for such transfer, and not under the provision applicable to the contrary characterization adopted by the Tribunal.

Conclusion: The Tribunal was not justified in granting relief under section 80T(b)(ii); the proper relief was under section 80T(b)(i). The issue is answered in favour of the assessee.

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