K.J.SENGUPTA,J. - (1.) THE above appeal under S. 260A of the IT Act, 1961, (hereinafter referred to Act of 1961) is at the instance of the assessee-appellant against the judgment and order of the Tribunal, "B Bench" Calcutta in ITA No. 2547/Cal/1997, dt. 9th Oct., 2001, in relation to the asst. yr. 1992-93.
(2.) THE above appeal was admitted by an order dt. 30th July, 2002 of this Court on the following substantial questions of law : (i) Whether the use of the verb "acquires" in S. 27(iiib) of the IT Act, 1961, which was introduced w.e.f. 1st April, 1988, relates to prospective operation, or to be more specific, the right which has been acquired on or after the relevant date of insertion of the provision, i.e., 1st April, 1988 ? (ii) Whether S. 27(iiib) of the IT Act, 1961 relates back to past transaction, particularly when S. 27(iiib) refers to transactions as contained in S. 269UA(f) of the IT Act 1961, which itself has come into force w.e.f. 1st April, 1986 ? During pendency of the instant appeal an application was made by the assessee urging additional two grounds to be formulated as being substantial point of law for hearing. Those two grounds are stated hereunder : (i) Whether rent from house property should be treated as income from business or as income from house property, particularly in case where the main business of the assessee is to acquire building on lease and let them out in rent ? (ii) Whether the proceedings under S. 148/147 of the IT Act has been validly initiated ?
(3.) THIS Court by order dt. 29th Aug., 2005 adjourned the hearing of the said application till the hearing of the appeal is taken up. In the said order it was decided that in future the aforesaid points suggested should be considered by the Court for formulation. Since the matter was urged by the learned counsel for both the parties extensively on the applicability of the said S. 27(iii)(b) of the IT Act, 1961 (hereinafter referred to as the Act 1961) we think that only one additional ground being first one can be taken for hearing as being substantial question of law. Thus this Court is to decide this appeal on the aforesaid three substantial questions of law. We feel accordingly the short fact is required to be narrated as under :;