V. V. R. N. M. Subbayya Chettiar v. Commissioner Of Income.tax, Madras

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SUPREME COURT REPORTS 961 V. V. R. N. M. SUBBAYYA CHETTIAR V. COMMISSIONER OF INCOME.TAX, MADRAS. [SAIYID FAZL Au, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.J Indian Income-tax Act (XI of 1922), s. 4A (b)-Hindu undivided family-Residence-Tests--Occasional visits to India and attending to management",'' family affairs situated", there, effect "wholly" of-B,wden and 11 of affairs", proof-" meanings of. Control and The words used in s. 4A (b) show: (i) that, normally a Hindu undivided family will be taken to be resident in the taxable terri-torieE1, but such a. presumption will not apply if the case can be 11 brought under affairs " means affairs which are .relevant for the second part of the provision, the purpose (ii) the word of the Income-tax Act and which have some relation to income, (iii) the question whether the case falls within the exception depends on whether the seat of the direction and control of the affairs of the family is inside or outside British India, and (iv) the onus of proving facts which would bring his case within the exception which is provided by the latter p.rt is on the assessee. The expression "control and management" ins. 4A (b) ol the Income-tax "head and brain" as it is sometimes called; Act signifies the controlling and directive power, the 11 situated" implies the functioning of such power at a particular place with some degree of permanence; and ''wholly" seems to recognise the possibility ol the seat of such power being divided between two distinct a.ad separate places and thn.t a Hindu undivided family may have more than one residence in the same way as a corpora-tion may have. The karta of a Hindu undivided family lived with bis wife and children and ca,rried on business in Ceylon, which bad become their place of domicile. He owned some immoveable property and bad a house. anil investments in British India. In the year of account be visited British India and stayed there for periods amounting in all to 101 days and during his stay started two firms in British India, personally attended to a litigation relating to tbe family lands, and appeared before the Income-tax 1rnthorities in proceedings relating to assessment of the. income of the family: Held, that these facts were not necessarily conclusive to establish tbe existence of a centre of control and management of the affairs of the family in British India, but they were by no ineans irrelevant to the matter in issue, and inasmuch as the assessee had not discharged the onus which lay upon him under the law by producing all' the material evidence which be was p&lled upon to produce to show that norms.11¥ and s.s a matter of l l3 1960 Dec, 21. 1950 course the affairs in India were also being controlled from Colombo, the normal presumption under the firot part of s. 4 A (b) V. V. R. N. M. must be given effect to and the assessee must be treateil as a SubQayya resident in British India during the year in question. It was Gh~ttiar however open to the assessee to prove in future years by proper v. evidence that the seat of control and managerr1ent of the affairs Oommissiontir of of the fau1ily wa.s wholly out.side British InUia. De.Beere V· Howe 15 Tax Oas. 198), Swedish Central Railway Co. Ltd. v. Thompson (9.Tax Oas. 373) l'eferred to. APPELLATE jURISDICTION: Civil Appeal No. XXXVIII of 1949. Income·ta•, Madra•. Appeal from a Judgmept of the High Court of Judi-cature at Madras (Gentle C. J. and Patanjali Sastri J.) dated August 22, 1947, in a reference under section 66 (1) of the Indian Income-tax Act made by the Income.tax Appellate Tribunal (Ref. No. 25 of 1946). K. Rajah Aiyar (K. Srinivasan, with him) for the appellant. M. C. Setalvad (G. N. Joshi, with him) for the res. pondent. 1950: December 21. The Judgment of the Court was delivered by thHthHnkoHn?BHn?wH ;[pZJhnk u/fsnko pBkw fJBew^N?e; efw;aBo, wdok; [;?:d ciab nbh, w[Zyohihnk ns/ uzdoP/yo nJhno i/i/H] fBoD/ dh fwshL21$12$1950 Gkosh nkwdB^eo n?eN (1922 dk XI), ;?ePB4J/ (ph) ^ fjzd{ nDtzv/ gfotko^^fBtk;^^N?;N^^ed/^edkJhA Gkos dk d"ok ns/ T[ZE/ gfotkoe wkwfbnkA ftZu ;akwb j'Dk, gqGkt^^gqwkD dk p'M^^^ “fB:zsoD ns/ gqpzXB”, “;fEs”, “g{oh soQK” ns/ “wkwb/”, d/ noE jB. ;?ePB 4J/ (ph) ftZu tos/ rJ/ ;apd fdykT[Ad/ jB L (i) T[j, nkw s"o s/ fJZe fjzd{ nDtzv/ gfotko Bz{ N?e;:'r y/sokA ftZu t;Bhe wzfBnk ikt/rk, go nfijh XkoBk bkr{ BjhA j't/rh i/eo e/; Bz{ gqktXkB d/ d{i/ fjZ;/ d/ nXhB fbnkAdk ik ;edk j?, (ii) “wkwb/” ;apd dk noE j? T[j wkwb/ i' fJBew^N?e; n?eN d/ T[d/;a bJh Y[et/A jB ns/ i' nkwdB Bkb e[M ;zpzXs jB, (iii) ;tkb fe eh e/; ngtkd d/ nzdo nkT[Adk j? fJ; rZb s/ fBoGo eodk j? fe gfotko d/ wkwfbnkA dh fd;ak ns/ fB:zsoD dh ;hN fpqfN;a Gkos d/ nzdo j? ikA pkjo, ns/ (iv) sZEkA Bz{ ;kps eoB dh fizw/tkoh i' T[; d/ e/; Bz{ ngtkd d/ nzdo fbnkT[Dr/pknd tkbk fjZ;k d[nkok gqdkB ehsk ikAdk j? w[bkAeDeosk s/ j?. ;?ePB 4J/ (ph) ftZu tkeKP “fB:zsoD ns/ gqpzXB” fJBew^N?e; n?eN fB:zsoD ns/ fBod/;ae Pesh Bz{ do;kT[Adk j?, “f;o ns/ fdwkr” fit/A fe fJ;Bz{ eJh tko fejk ikAdk j?; “;fEs” s'A Gkt j? nfijh ;aesh dk fJZe Gkr s/ e[M jZd sZe ;EkJhsk d/ Bkb ezw eoBkl ns/ “g{oh soQK” nfijh ;aesh dh ;hN d' tZy'^tZyo/ ns/ tZyo/ ;EkBkA ftueko tzv/ ikD dh ;zGktBk Bz{ gSkDdk gqshs jz[dk j? ns/ fJj fe fJZe fjzd{ nDtzv/ gfotko ftZu fJZe s'A tZX t;Bhe j' ;ed/ jB^ T[;/ soQK fit/A fJZe ekog'o/;aB e'b j' ;edk j?. fJZe fjzd{ nDtzv/ gfotko dk eosk nkgDh gsBh ns/ pZfunkA Bkb ofjzdk ;h ns/ ;hb'B ftZu tgko eodk ;h, i' T[BQkA dk fBtk; ;EkB pD frnk ;h. T[j e[M nuZb ikfJdkd dk wkbe ;h ns/ T[; dk fpqfN;a Gkos ftZu fJZe xo ns/ fBt/;a ;h. b/yk d/ ;kb ftu T[;B/ fpqfN;a Gkos dk d"ok ehsk ns/ e~[b 101 fdBkA dh fwnkd bJh T[ZE/ fojk ns/ nkgDh fojkfJ;a d"okB fpqfN;a Gkos ftZu d' cowkA ;a[o{ ehshnK, gfotkoe iawhBkA Bkb ;zpzXs w[eZdw/ ftZu fBZih s"os/ jkiao j'fJnk, ns/ gfotko dh nkwdBh d/ w[bkAeD Bkb ;zpzXs ekotkJhnK ftZu nkwdB eo nfXekohnK d/ ;kjwD/ g/;a j'fJnk. wzfBnk, fe fJj sZE fpqfN;a Gkos ftZu gfotko d/ wkwfbnkA d/ fB:zsoD ns/ gqpzXB d/ e/Ado dh j'Ad Bz{ ;Ekgs eoB bJh iao{oh s"o s/ fBoDkfJe BjhA ;B, go T[j fe;/ th soQK w~[d/ d/ wkwb/ Bkb ngq;zfre BjhA ;B, ns/ feT[Afe w[bkAeDeosk B/ iaz[w/tkoh Bz{ fv;ukoi BjhA ehsk ;h i' nkw s"o s/ ekB{zB d/ sfjs T[; s/ ;hT[j ;ko/ G"fse ;p{s g/;a eoe/ i' T[; Bz{ g/;a eoB bJh fejk frnk ;hns/ fJZe wkwb/ d/ o{g ftZuGkos ftub/ wkwfbnkA Bz{ e'bzp' s'A th fB:zsfos ehsk ik fojk ;h, ;?ePB 4J/ (ph) d/ gfjb/ fjZ;/ d/ nXhB nkw XkoBk Bz{ bkr{ ehsk ikDk ukjhdk j? ns/ w[bkAeDeosk Bz{ ;tkb ftZu ;kb d"okB fpqfN;a Gkos ftZu fJZe fBtk;h wzfBnk ikDk ukjhdk j?.jkbkAfe fJj ;kps eoBk w[bkAeDeosk bJh yZ[bk ;h fe GftZy d/ ;kbkA ftZu ;jh ;p{s d/ e/ fe gfotko d/ wkwfbnkA d/ fB:zsoD ns/ gqpzXB dh ;hN g{oh soQK fpqfN;a Gkos s'A pkjo ;h. vh pho/ pBkw j't/ (5 N?e; e?;H 198), ;thfv;a e/Adoh o/bt/ ezgBh fbwfNv pBkw Ekw;B (9 N?e; e?;H 373) dk jtkbk fdZsk frnk j?. nghbh nfXekoL 1949 dh f;tb nghb BzHXXXVIII. 22 nr;s, 1947 Bz{ wdok; (i?ANb ;hi/ ns/ gszibh ;ak;soh i/H) fty/ jkJh e'oN nkca i[vhe/uo d/ fJZe c?;b/ s'A, fJBew^N?e; nghbh d[nkok pDkJ/ rJ/ Gkosh nkwdB^eo n?eN dh Xkok 66 (1) d/ nXhB fJZe ;zdoG ftZu nghb fNqfpT{Bb (jtkbk Bzpo 25 nkca 1946). e/H okik nJhno (e/H ;qhfBtk;B, T[;d/ Bkb) nghbeosk bJh. itkp d/D tkb/ bJh n?wH ;hH ;/sbtkV (ihHn?BH i';ah, T[; d/ Bkb). 1950H d;zpo 21H ndkbs dk c?;bk d[nkok fdZsk frnk ;h^^ cIb nbh i/^^ fJj Gkosh nkwdB N?e; dh Xkok 66 (1) d/ sfjs fJ; d/ jtkb/ s/ wdok; fty/ fBnkAfJe T[Zu ndkbs d/ c?;b/ s'A fJZe nghb j?. ;kb 1942^43 bJh nkwdB eo bJh nghbeosk d/ w[bkAeD d/ ;zpzX ftZu fJBew^N?e; nghbh fNqfpT{Bb d[nkok n?eN. jkJh e'oN Bz{ G/i/ rJ/ ekBz{B d/ ;tkb j/m fby/ nB[;ko ;BL^ eh e/; dhnkA ;fEshnkA ftZu, w[bkAeDeosk (fJZe fjzd{ nDtzfvnk gfotko) nkwdB^N?e; n?eN dh Xkok 4J/ (ph) d/ sfjs fpqfN;a Gkos ftZu fBtk;h j? .