9911796707
TMI Blog1972 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Y., RAMANUJAM. JUDGMENT The judgment of the court was delivered by V. RAMASWAMI J. - The following question has been referred under section 256(1) of Income-tax Act, 1961 (hereinafter called " the Act "). "Whether, on the facts and in the circumstances of the case,, the Appellate Tribunal was right in law in holding that the assessee should be assessed as a 'non-resident' for the assessment year 1962-63 ? " The assessee is a firm of four partners carrying on business in Ceylon in pawn-broking and money-lending. All the four partners are residing in India. The firm was constituted on November 10, 1937. On July 15, 1942, the four partners executed a power of attorney in favour of one V. Mariappa Pillai, who is residing in Ceylon. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the Act, which is the relevant provision, reads as follows: " A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India." The corresponding provision in the 1922 Act is section 4A(b). We have therefore to see whether the assessee has established that no part of the control or management of its affairs is situated in India during the assessment year. At this stage it would be useful to refer to the relevant clauses of the deed dated July 15, 1942, appointing Mariappa Pillai as the power of attorney. After stating that the partners were carrying on in part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livery thereof. Generally to do, execute and perform all such further and other acts, deeds, matters and things whatsoever which our said attorney shall think necessary or proper to be done in and about, or concerning the same as fully and effectually to all intents and purposes as we might or could do if we were personally present and did the same in our proper persons, it being our intent and desire that all matters and things respecting the same shall be under the full management, control and directions of our said attorney, we hereby promising and agreeing to ratify, allow and confirm all and whatsoever our said attorney shall lawfully do or cause to be done in the premises by virtue hereof. And we do hereby direct that all acts wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or management of its business. There is nothing in evidence to show that in spite of the terms of the document the actual control and management of the business was not wholly vested in the agent. In fact, it was not the case of the department at any stage that the deed was not acted upon, but the Income-tax Officer proceeded to interpret the document as though some control is retained by the assessee and the power of attorney agent was acting under the directions of the partners. There was no evidence in support of this view and the Tribunal has actually given a finding that that view was not correct and the power of attorney vested the entire control and management of the business in the agent. As pointed out by the Tribunal, it was open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, got into the management of the business at Penang and functioned as such as a result of common consent of all the heirs of the said Mohamed Rowther. The question arose as to the residential status of the heirs with reference to the business carried on by the executor at Penang. On the finding that in so far as the conduct of the business was concerned Amir Mohideen was in full and complete charge of the business and was not under the directions of the Indian heirs, it was held by this court that the heirs of Mohamed Rowther are to be assessed as non-resident in respect of the business. On the facts of the present case we are of opinion that the assessee had discharged the onus that lay upon it and proved that the entire control and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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