The Commissioner of Income Tax vs V.S.K.S. Somasundaram Chettiar

Ramesam, J.—The facts out of which this reference arises may be shortly stated as follows : A Hindu joint family consisting of the father and

manager V.S.K.S. Soma-sundaram Chetty and his son has been assessed u/s 3 of the Act. The permanent home of the family is Lakshmipuram in

the Pudukottah State where it has a money-lending-business. It also carries on piccegoods businesses at Madras and Madura in British India and a

money-lending business at Taiping in the Federated Malay States. It is also a partner in a money-lending business at Klangin the Federated Malay

States and in a piecegoods business at Kumbakonam; and apparently it has some money-lending business in Colombo. In the year of account

1928-29 it has been found that the assessees received in British India on various dates sums of money aggregating to Rs. 40,000 from the foreign

businesses at Taiping, Klang and from the customers in Colombo. The Income Tax Officer sought to assess the joint family in respect of the foreign

remittances on the ground that it was resident in British India. It was contended for the assessees that the family was not resident in British India;

and the Commissioner of Income Tax has referred the following questions to its, viz.:

(1) Whether the decision in Commissioner of Income Tax v. T.S. Firm (1927) ILR 50 M. 847 : 53 M.L.J. 249 (F.B.) as regards residence is

applicable only to cases of partnership and not to cases of joint undivided Hindu family business and whether that decision does not apply to the

facts of the present case.

(2) Whether there is legal evidence in support of the finding of the Income Tax Officer that the joint family firm has its residence in Madura within

British India.

Taking the first question, the essential point in this case is that the business carried on by the joint family is a Hindu joint family business. There is

no partnership in this case constituted under the law of partnership. Now a Hindu joint family may have no income arising from a family business

but only arising out of interest on securities or property or professional earnings or other sources, that is to say, any of the headings mentioned in

Section 6 of the Act. The fact that in this case it happens to be a trading family is a mere accident. The question as to what is the residence of a

joint family cannot depend upon the nature of income it gets. It cannot be that the test of residence should be one thing if it is a trading family and

the test of residence some other tiling if it gets income from securities, property or other sources. Thus, obviously, to liken a Hindu joint family to a

firm or a company will lead to anomalous conclusions. In Commissioner of Income Tax v. T.S. Firm (1927) ILR 50 Mad. 847 : 53 M.L.J. 249

(F.B.) it was held that in the case of a company or a firm the residence of the company or the firm is that place or those places from which the

central management or control is exercised over the whole business of the firm. Such a test may not be available to a joint Hindu family where the

joint family happens not to possess any trade. Therefore, obviously we must apply different tests. It seems to us that, in the case of a Hindu joint

family, the family should be said to reside in all those places where members of the family live. Even in the case of a company or a firm it is quite

clear that there can be more than one place of residence. That has been laid down not only in the case in The Swedish Central Railway Co. Ltd. v.

Thompson (1925) A.C. 495 but also in Commissioners of Inland Revenue v. Lysaght (1928) A.C. 234. Similarly we do not see any reason why a

joint Hindu family must not be said to be resident in more than one place. Therefore we are of opinion that the test in Commissioner of Income Tax

v. T.S. Firm (1927) ILR 50 Mad. 847 : 53. M.L.J. 249 (F.B.) cannot apply to what are generally described in decisions as Hindu Law

partnerships, i.e., partnerships which are the creatures of Hindu Law and not of the law of contracts. If the first question is answered as above,

there is no difficulty in answering the second question. In this case it cannot be said that there is no evidence on which the Commissioner can come

to a conclusion as to the place of residence. There is some evidence which is set out by the Commissioner as follows:

The Manager visits these places periodically for the purpose of supervising the businesses. During such visits he stay t Madura for varying periods

as will be seen from the sworn statement given by the petitioner. Whenever the Manager comes to Madura he resides in the business premises

which are provided with a kitchen and other conveniences of a residential house.

These circumstances are certainly some evidence and the question as to whether there is enough evidence is not a matter for us but for the

Commissioner.

Costs Rs. 250 to the Commissioner. No order necessary on the Court motion.