Exemption u/s 54 of the income tax act

The property should be owned by the person who is liable for capital gains tax.  The above arrangement does not fit in with the legal requirement and therefore one would not be eligible for exemption u/s 54 of the I.T. Act in the above arrangement.

No you do not fall in that category by holding a share certificate. You are not eligible for exemption U/s 54 of the Income Tax Act.

Ok. So, the pvt ltd company who built the apartment complex is registered and a dispute is going on with the High Court to allow individual flat owners to become khata holders. Till then, they have share certificate. Does this not enable them to be called owners? Could you pls tell me as per legal terms, what documents are treated as valid title of the property?

The right of occupancy is represented by the share certificate. Section 29(2) of the M.C.S. Act lays down that the member shall not transfer any share held by him or his interest in the capital or property unless (a) he held such share or interest for not less than one year and (b) the transfer is made to a member of the Society or to a person whose application for membership is accepted. The Supreme Court in the case of Ramesh Himmatlal (supra), therefore, held that it will be for the auction purchaser to first obtain membership of the Society and the Court, before confirmation of the sale, will insist upon his membership of the Society which, it would not be unreasonable to assume, will be granted by the Society in the ordinary course unless there are cogent and relevant reasons for not doing so.