assessee is in appeal against order of Commissioner (Appeals) holding that assessee is liable to pay capital gains on transfer of flat in 'Shreyas' co-operative housing society in favour of Shri Yogendra Kumar Modi. 2. During accounting year ending 31-3-1981, assessee agreed to s e l l flat No. 1 in 'Shreyas' building which belonged to assessee. agreement was entered into on 28-8-1980. assessee received sum of Rs. 6 lakhs being full consideration for flat and agreed to relinquish in favour of Shri Yogendra Kumar Modi, all right, title and interest in flat along with qualifying shares in 'Shreyas' Co-operative Housing Society Ltd. 3. assessee, however, had not declared any capital gains for taxation in his return of income. It was contended that co-operative society had still not accepted application of transferee for being recognised as member and, therefore, sale had not become effective and complete. Since society had not agreed to transfer ownership of flat to purchaser and matter was under litigation, assessee claimed that transfer had not been effected. ITO held that form duly signed by parties was lodged by purchaser with society on 14-1-1981. ITO did not accept this contention because for purposes of section 45 , read with section 2(47) , of Income-tax Act, 1961 ('the Act'), assessee had definitely relinquished his right, title and interest in flat in favour of Shri Yogendra Kumar Modi. Therefore, there was effective transfer and with approval of IAC under section 144B of Act, he brought capital gains to tax. He held that transfer of shares in name of purchaser in records of society is mere formality which may be completed in due course. In Maharashtra Co- operative Societies Act, 1960, no registration of conveyance deed was required to complete transfer of flat. 4. assessee took matter in appeal before Commissioner (Appeals) and contested this order. Commissioner (Appeals) noted that purchaser, Shri Yogendra Kumar Modi was tenant of this flat which was being used for non-residential purposes, while Shri Yogendra Kumar Modi was director of Modi Spg. & Wvg. Mills Co. Ltd. Who (the Company) purchased flat in Shri Yogendra Kumar Modi's name. Though sale was effected in name of Shri Yogendra Kumar Modi, company which was purchaser was already tenant of said flat which was being used for non-residential purposes. committee of co-operative society had refused to recognise purchaser as member of society because flat was being used for office in residential building and so far as Shri Yogendra Kumar Modi was concerned, he already owned flat in residential building in Bombay. 5. Before Commissioner (Appeals), it was argued that assessee, in law, continued to be owner of flat because society had not recognised membership of Shri Yogendra Kumar Modi. Therefore, capital gain was not attracted unless transfer of capital asset was completed. Reliance was placed on certain authorities for proposition that for assessing income from house property, ownership would not be transferred by mere agreement to sell till sale deed is registered. Commissioner (Appeals) has referred to definition of transfer in section 2(47) , in relation to capital asset to include sale, exchange or relinquishment of asset or extinguishment of rights therein or compulsory acquisition thereof. assessee had also executed transfer form of shares for being submitted to co-operative society. Thus, so far assessee is concerned, he had abandoned all his rights over property and no eventuality has been pointed out under which, after completing acts required by purchaser, i.e., signing of transfer form and executing necessary documents, he could be called upon to refund purchase price, if society does not register transfer form and executing necessary documents, he could be called upon to refund purchase price, if society does not register transfer in favour of purchaser. assessee had done every thing that he was required to do to make effective transfer and, therefore, so far as he was required to do to make effective transfer and, therefore, so far as he was concerned, relinquishment of rights was complete. This was clear from fact that in dispute between society and purchaser, assessee was not even made party to litigation. Commissioner (Appeals) held that decisions relied upon did not apply because in case of flat in building owned by co-operative society no registration of sale deed was contemplated by law. In case of shares of limited company, transfer of shares is complete once shares are handed over and it is not necessary that actual change of name should also be made in company's name as held by Supreme Court in case of Seth R. Dalmia v. CIT [1977] 110 ITR 644. 6. assessee is aggrieved by this order and is in appeal. We have heard learned counsel for assessee and department representative. T h e arguments proceeded on same lines as before Commissioner (Appeals). contention urged on behalf of assessee was that transfer was not complete till co-operative society agreed to accept purchaser as member and that society had refused to do. assessee, it was urged was still liable to refund price because purchaser had not become owner of this flat. learned departmental representative supported orders of authorities below because so far as definition of transfer under section 2(47) is concerned, transfer was complete. 7. We have considered rival contentions. We were taken through provisions of Maharashtra Co-operative Societies Act. There is bar under section 47(2) of Maharashtra Co-operative Societies Act to transfer of property or interest in property which is subject to charge in favour of society under section 47(1) without previous permission of society and under section 47(3) any transfer made in contravention of sub-section (2) shall be void. Supreme Court had occasion to consider provisions of Maharashtra Co-operative Societies Act in Ramesh Himmatlal Shah V. Harsukh Jadhavji Joshi AIR 1975 SC 1470. question that arose in that case was whether flat in tenant co-partnership housing society under Maharashtra Co-operative Societies Act, is liable to attachment and sale in execution of decree against member in whose favour or for whose benefit same has been allotted by society. Supreme Court considered provisions of sections 31,29 and 47 of Maharashtra Co-operative Societies Act, along with relevant rules and held as follows: "... right to occupy flat of this type, assumes significant importance and acquires under law stamp of transferability in furtherance of interest of commerce. In absence of clear and unambiguous legal provisions to contrary, it will not be public interest nor in interest of commerce to impose ban on salability of these flats by tortuous process of reasoning. prohibition, if intended by Legislature, must be in express terms [1974] 76 Bom. LR 375 reversed. There is no absolute prohibition in Act or in Rules or in Bye laws against transfer of interest of member in property belonging to society. only transfer which void under Act is one made in contravention of sub- section (2) of section 47." (p. 1470) Supreme Court further held that in section 29, there was not even provision of prior consent for transfer of shares or interest in such property. Section 29 read with rule 24 of Maharashtra Co-operative Societies Rules, 1961, shows that there is no prohibition as such against transfer of share to member or even to non-member if he consents to be member and makes application for membership by purchasing five shares as provided under bye-law 9. In paragraph 23, their Lordships further held as follows: "... We have seen there is no absolute prohibition against transfer of right to occupation of flat or even to transfer share. auction purchaser is presumed to know limitations under which he has purchased right to occupy flat in Court auction. If ultimately society turns down his application for membership (which of course cannot be done except for valid reasons) it is up to him to take such course of action as available under law. Such remote contingency, per se, will not make particular right of judgment-debtor in flat non attachable or non-saleable." (p. 1477) 8. It is, thus, clear that firstly, accordingly to this decision of Supreme Court, right to occupy flat is independent of right to hold shares in co-operative society and secondly, that both these rights are transferable without prior consent of co-operative society. assessee in this case has done all that was required of him to make effective transfer, i.e., he gave possession of flat, executed transfer deed of property and also all shares in co-operative housing society. Thereafter, he went out of picture except so far as he may be required to state any proceedings under law that he had affixed his signature to various documents for consideration to make transfer effective. He cannot, in law, be required to refund consideration because if transferee cannot obtain membership of society, it will be for no fault of assessee and unless purchaser can prove, which is nobody's case, that assessee have defective title, assessee cannot be made to refund consideration received for transfer. Therefore, so far as assessee is concerned, transfer was complete and effective because no registered deed of conveyance is required under section 47. rulings on which reliance was placed before Commissioner (Appeals) pertain to those immovable properties in respect of which registration of sale deed is compulsory before transfer becomes effective, which have no application to case before us. 9. That apart under section 2(47) , transfer was complete firstly because assessee sold his right, title and interest in property and secondly, he completely relinquished asset in favour of purchaser. It cannot, therefore, be said that sale was not complete and that till purchaser is recognised by co-operative society as member, assessee cannot be called for to pay tax on capital gains. We do not agree that sale by assessee was one prohibited by law and that in executing documents to make effective sale, he has contravened any law which would invalidate sale altogether. sale is complete and effective so far as assessee is concerned. He was, therefore, rightly taxed on capital gains. We find no merit in appeal which is dismissed. 10. appeal is dismissed. *** FEREDOON K. IRANI v. FIFTH INCOME TAX OFFICER