1967 (4) TMI 10 - SC - Income Tax

Claim of the assessee that he was a non-resident during the previous year relevant to the asst. yr. 1945-46 - Tribunal was justified in holding that the assessee was a resident in British India during the relevant previous year - revenue s appeal allowed

Summary

Issues:
Assessment of residency status under Income-tax Act, 1922 for an individual conducting business in British India; Burden of proof on the department and the assessee; Interpretation of section 4A(a)(iii) of the Income-tax Act, 1922; Examination of evidence to determine residency status; Tribunal's discretion in assessing the nature of visits to British India.

Analysis:
The judgment by the Supreme Court involved the assessment of an individual's residency status under the Income-tax Act, 1922, specifically focusing on section 4A(a)(iii). The case revolved around the burden of proof regarding residency, with the department required to establish the individual's presence in British India for a specified period, and the individual tasked with proving the occasional or casual nature of their visits. The Tribunal's decision was based on the assessment of evidence presented, including the individual's statements and conduct during visits to British India.

The Tribunal's inquiry delved into the individual's business activities in British India, particularly dealings with business houses in Bombay and remittances made to the same. Despite the individual's claims of occasional or casual visits, the Tribunal found discrepancies in the evidence, leading to a conclusion that the visits were business-related rather than social. The Tribunal's decision emphasized the importance of considering the purpose of visits in determining residency status, highlighting that business-related visits are not typically deemed occasional or casual.

The Supreme Court disagreed with the High Court's response to the second question posed, overturning it and affirming the Tribunal's findings on the nature of the individual's visits to British India. The Court also declined to address the third question posed by the High Court, deeming it abstract and unrelated to the facts of the case. Ultimately, the appeals were allowed, the High Court's order was set aside, and the Commissioner was awarded costs for the appeals.

In conclusion, the judgment underscored the significance of evidence and conduct in determining an individual's residency status under the Income-tax Act, highlighting the Tribunal's discretion in assessing the nature of visits to British India and the burden of proof on both the department and the assessee in establishing residency status.