Rights in under-construction office premises qualify as a capital asset in buildings, limiting deduction to the specific clause.

A transferred right arising from an agreement to acquire office premises in an under-construction building was treated as a capital asset representing a right in buildings. Although a mere contract for sale does not by itself create an interest in immovable property, the facts showed substantial consideration had been paid, construction was nearly complete, and the transfer covered the assessee's right, title and interest in the premises. On that basis, the gain was held to fall within section 80T(b)(i) rather than the residuary clause in section 80T(b)(ii), and the higher deduction claimed under clause (ii) was not available.

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Issues: Whether the assessee's gain on transfer of rights under an agreement to purchase office premises was assessable as long-term capital gains relating to a capital asset being any right in buildings or lands under section 80T(b)(i), or fell under the residuary clause in section 80T(b)(ii).

Analysis: The assessee had entered into an agreement to purchase office premises in an under-construction building, paid substantial consideration over time, and later transferred his right, title and interest in the premises. The expression "any rights in the buildings or lands" was not defined in the Act. Reference to section 54 of the Transfer of Property Act, 1882 showed that a mere contract for sale does not by itself create an interest in immovable property, but the present transaction was not treated as a simple executory contract alone. Substantial consideration had already been paid, the building construction was nearly complete, and the transfer concerned rights in the office premises. On these facts, the capital asset was held to be a right in the office premises, i.e. in buildings.

Conclusion: The case fell within section 80T(b)(i) and not section 80T(b)(ii); the assessee was not entitled to the higher deduction claimed under clause (ii).

Ratio Decidendi: A transferred right arising from an agreement to acquire office premises in an under-construction building can constitute a capital asset being a right in buildings or lands for the purpose of section 80T(b)(i) of the Income-tax Act, 1961.

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