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2011 (2) TMI 372 - CALCUTTA HIGH COURTBusiness income or house property - Retrospective amendment to section 27(iiib) - use of the verb "acquires" - term "owner" - Held that: - the amendment was intended to supply an obvious omission or to clear up doubts as to the meaning of the word "owner" in section 22 of the said Act. The language of clause (iii)(b) of section 27 of the said Act shall be deemed to be declaratory and clarificatory and not substantive in nature. - When it is clarificatory in nature, it cannot change the basic character of the said section for one of the objects of classification is to keep basic purpose of original statutory provision untouched. Hence following the established principle of law relating to interpretation of statutes, we hold that the said provision with amendment has retrospective operation though it has been inserted on 1-4-1988. Ownership interest of leasehold interest - nature of income - Held that: - appellant/assessee is deemed owner for holding the leasehold interest. - it is possible in this case the assessee/appellant though might be an owner by applying the deeming provision in section 27(iiib), having regard to the nature of activity of the company as mentioned in the object Clause of the Memorandum of Association, to classify appropriately the income fetched in connection with house property. - matter remanded back to AO to come to findings with reference to the object clause of the Memorandum of Association and also the accounts whether this income fetched by way of sublease is part of the business activity or not? On examining closely if it is found that it is part of the business activity obviously the income fetched therefrom should be classified under the heading income from and profit and gains of business, and not from the income from house property.
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