Civil Appeal No 788 of 1957
Appeal by special leave from the judgment and order dated February 16 1955 of the Bombay High Court in Income tax Reference No 38x of 1954
C K Daphtary Solicitor General of India R Ganapathy Iyer and D Gupta for the appellant
RJ Kolah section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for the respondent
April 21
The Judgment of section K Das and Kapur JJ was delivered by section K Das J Hidayatullah J delivered a separate Judgment
SK DAS J This is an appeal by special leave from the judgment and orders of the High Court of Bombay dated February 16 1955 in a reference under section 661 of the Indian Income tax Act 1922 hereinafter called the Act
The reference was made in the following circumstances  The Hindu undivided family of one Gandalal carried on business in cloth in Wadhwan in Kathiawar which at the relevant time was outside British India
The family consisted of Gandalal and his four sons 1 Girdharlal 2 Hansraj 3 Nandlal and 4 Ramniklal
In 1944 Nandlal came to Bombay and started a cloth business in partnership with other persons the partnership being known as Amulakh Amichand  Co 623 Nandlal s share in the partnership was ten annas and that of his three partners who belonged to the family of Amulakh Amichand six annas
It was stated that the family of Amulakh Amichand which was a well known business family of Bombay did not supply any capital to the partnership and Nandlal alone was the financing partner
On April 13 1944 Nandlal received a sum of Rs 50000 from the Hindu undivided family of which he was a member and a further sum of Rs 50000 on April 27 1944
Two other sums aggregating to Rs 50000 were also received from the Hindu undivided family on June 8 1944 and June 29 1944
The case of the assessee was that a sum of Rs 100000 was given to each son by the father and the sums of money received on June 8 1944 and June 29 1944 were a loan by the Hindu undivided family to Nandlal
Therefore the case of the assessee was that Nandlal became the partner of the firm of Amulakh Amichand in his individual capacity
The case of the Department however was that the total sum of Rs 150000 sent to Nandlal by the Hindu undivided family was utilised as capital in the cloth business of the partnership known as Amulakh Amichand  Co Subsequently Girdharlal another brother of Nandlal came to Bombay and joined the firm
Out of the share of ten annas of Nandlal Girdharlal was given a share of five annas
The partnership firm of Ainulakh Amichand  Co then started a cloth business at Banaras and the partners of the firm at Banaras were the partners of the Bombay firm of Amulakh Amichand  Co and an outsider from Banaras
A third brother of Nandlal also joined the Banaras firm but he did not bring any capital
For the assessment year 1945 46 the Income tax Officer held that the Hindu undivided family of Gandalal was resident in the taxable territories namely British India and hence he included the sum of Rs 150000 in the income of the family under section 41 biii of the Act as having been brought into or received in British India in the relevant year and made an assessment on that basis
The assessee appealed to the Appellate Assistant Commissioner Bombay but without success
Then there  as an 624 appeal to the Income tax Appellate Tribunal Bombay
Two questions were raised before the Tribunal  1 Whether Nandlal represented the Hindu undivided family of Gandalal of Wadhwan now in Saurashtra in the firm Amulakh Amichand  Co Bombay and later on in the firms Amulakh Amichand  Co Bombay and Banaras
2Whether the Hindu undivided family of Gandalal was resident in the taxable territories in the relevant years of account
 The Tribunal held on the first question that Nandlal and later Girdharlal joined the Bombay firm and also the Banaras firm of Amulakh Amichand  Co as representing the Hindu undivided family of Gandalal and the money for starting the Bombay business came from the Hindu undivided family
Accordingly the Tribunal held that Nandlal was properly assessed in the status of a Hindu undivided family
On the second question the Tribunal held in favour of the assessee and came to the following conclusion  The business at Bombay and later on the business at Banaras cannot in our opinion be considered to be the affairs of the Hindu undivided family of Gandalal
These two businesses belonged to two separate entities namely the Bombay firm of Amulakh Amichand  Co and the Banaras firm of Amulakh Amichand  Co True the Hindu undivided family would in due course of time receive a share of profit from these two firms but all the same we do not think that it could be said that the firms of Bombay and Banaras constituted the affairs of the Hindu undivided family
The businesses in Bombay and Banaras according to the Partnership Act belonged to Nandlal and others
We are therefore of opinion that for assessment years 1945 46  the Hindu undivided family was not resident in the taxable territories The actual relief which the Tribunal gave to the assessee was expressed in the following words  For the assessment year 1945 46 the assessee s status would be Hindu undivided family but non resident
In so far as the assessed income is concerned the sum of Rs 150000 which was included under section 41biii has to be deleted
The rest of the 625 income accrued to the Hindu undivided family in the taxable territories
 At the instance of the Commissioner of Income tax Bombay who is the appellant before us the Tribunal stated a case and referred the following question of law to the High Court of Bombay for its decision under section 661 of the Act
The question was in these terms  Whether the Hindu undivided family of Gandalal represented by Nandlal in the firm of Amulakh Amichand  Co of Bombay was resident in the taxable territories in the year of account relevant for the assessment year 1945 46
 The answer to the question depended on the true scope and effect of section 4Ab of the Act
The High Court held that the expression  the affairs of the Hindu undivided family  in section 4Ab did not have reference to the private or domestic affairs of the family but referred to affairs concerned with income and taxation thereon
It said  We might put the matter in this way that when a coparcener carries on business in partnership on behalf of the Hindu undivided family the affair is of the coparcener and not of the family but when the business is carried on by the family itself then it is the affair of the family and not of the coparceners The result is that we must agree with the view taken by the Tribunal and we must answer the question submitted to us in the negative After the decision of the High Court the appellant obtained special leave and has come to us in pursuance of special leave granted by this Court
We must make it clear at the very outset that the first question raised before the Tribunal and decided by it against the assessee does not now fall for consideration
Whatever income Nandlal and Girdharlal received from the two businesses at Bombay and Banaras was income in their hands of the Hindu undivided family
With that income we are not now concerned
We are concerned with the second question namely whether the Hindu undivided family of Gandalal was resident in the taxable territories in the 626 relevant year so as to make the sum of Rs 150000 taxable under section 4 1 b iii of the Act on the basis of such residence
Clearly enough if the Hindu undivided family of Gandalal was not resident in the taxable territories in the relevant year the sum of Rs 150000 would not be taxable under section 4 1 b iii of the Act
We must therefore keep in mind the narrow scope of the question before us which is whether the Hindu undivided family of Gandalal could be said to be resident in the taxable territories i e British India in the relevant year under the provisions of section 4Ab of the Act even though the family carried on its own cloth business wholly outside the taxable territories
It is necessary as well as convenient to read section 4Ab at this stage  4A
For the purposes of this Act ba Hindu undivided family firm or other association of persons is resident in the taxable territories unless the control and management of its affairs is situated wholly without the taxable territories In V V R N M Subbayya Chettiar vs Commissioner of Income tax Madras1 this Court held that the test for deciding the residence of a Hindu undivided family laid down in section 4A b of the Act was based very largely on the rule which had been applied in England to cases of corporations and though normally a Hindu undivided family would be taken to be resident in British India such presumption would not apply if the case could be brought under the second part of the provision
It was also observed therein that the word  affairs  must mean affairs which are relevant for the purpose of the Income tax Act and which have some relation to income  it was stated that in order to bring the case under the exception the court has to ask whether the seat of the direction and control of the affairs of the family is inside or outside British India and the word  wholly  suggests that a Hindu undivided family may have more than one residence in the same way as a corporation may have
The position in Hindu law with regard to a coparcener even when he is the Karta entering into partnership 1  627 with others in carrying on a business is equally well settled
The partnership that is created is a contractual partnership and will be governed by the pro 
visions of the 
The partnership is not between the family and the other partners it is a partnership between the coparcener individually and his other partners see Kshetra Mohan Sannyasi Charan Sadhukhan vs Commissioner of Excess Profits Tax West Bengal 1
The coparcener is undoubtedly accountable to the family for the income received but the partnership is exclusively one between the contracting members including the individual coparceners and the strangers to the family
On the death of the coparcener the surviving members of the family cannot claim to continue as partners with strangers nor can they institute a suit for dissolution of partnership  nor can the stranger partners sue the surviving members as partners for the coparcener s share of the loss
Therefore so far as the partnership is concerned both under Partnership law and under Hindu law the control and management is in the hands of the individual coparcener who is the partner and not in the family
Now it is undisputed that but for the partnership business at Bombay or Banaras the Hindu undivided family of Gandalal was not resident in the taxable territories in the relevant year
The point for decision therefore is does the existence of the said partnership establish the residence of the family  This raises two questions before us firstly whether the firm of Amulakh Amichand  Co is one of the affairs of the Hindu undivided family of Gandalal because that is the only affair which has relation to the income sought to be taxed and on which the appellant relies for determining the residence of the family secondly where the control and management of the said affair looked at from the point of view of the Hindu undivided family is situate
We think that in the context of the facts found in the case these two questions are interlinked
The expression  control and management  under section 4Ab signifies controlling and directive power the head and brain 628 as it is sometimes called
Furthermore it is settled we think that the expression control and management  means de facto control and management and not merely the right or power to control and manage see B R Naik vs Commissioner of Income tax 1
It is also quite clear we think that if a coparcener becomes a partner on behalf of the joint family with strangers in a firm which carries on business in the taxable territories that by itself will not determine the residence of the family unless the control and management of the firm is at least in part in the Hindu undivided family
On the facts of this case the Hindu undivided family or for that matter the Karta of that family that is Gandalal could exercise no power of controlling management over the partnership firm either under Partnership law or under Hindu law
It seems to us that the word  affairs  in section 4Ab must mean affairs of a Hindu undivided family which are capable of being controlled and managed by the said Hindu undivided family as such
Where a coparcener enters into partnership with strangers the Hindu undivided family exercises no controlling power of management over the partnership firm
In that view of the matter the partnership firm cannot be an  affair  of the Hindu undivided family capable of being controlled and managed by the Hindu undivided family as such
It may be here observed that the decision in V V R N M Subbayya Chettiar vs Commissioner of Income tax Madras 2 proceeded on the basis of onus only and as was specifically stated therein it was confined to the year of assessment to which the case related and it was left open to the appellant of that case to show in future years by proper evidence that the seat of control and management of the affairs of the family was wholly outside British India
In the case before us the Tribunal no doubt found on the first question raised before it that Nandlal and Girdharlal joined the Bombay and Banaras firms as coparceners of the Hindu undivided family and the money for starting the business came from the Hindu undivided family
That finding by itself however does not determine the residence of the 1 19464 1TR 324
2  629 Hindu undivided family of Gandalal
Both under Hindu law and Partnership law the Hindu undivided family as such could exercise no control and management over the two businesses at Bombay and Banaras
These businesses belonged to the partners and on the facts found in this case it cannot be said that the businesses were the affairs of the Hindu undivided family of Gandalal within the meaning of section 4Ab of the Act
We agree with the High Court that the position would be different if the Hindu undivided family itself carried on the business as its own business
In that case the business would be an affair of the family because the family would be in control and management of the business
At first sight it may appear paradoxical that the income from the two businesses at Bombay and Banaras in the hands of Nandlal and Girdharlal should be treated as income of the Hindu undivided family and at the same time it should be hold that the two businesses were not the affairs of the Hindu undivided family within the meaning of section 4Ab of the Act
There is really no paradox because the place of accrual of income of such family and the place of its residence need not necessarily be the same under the Act
Residence under section 4Ab of a Hindu undivided family is determined by the seat of control and management of its affairs and in the matter of partnership business in British India the Hindu undivided family as such had no connexion whatsoever with its control and management
If the seat of control is divided the family may have more than one place of residence and unless it is wholly outside the taxable territories the family will be taken to be resident in such territories for the purposes of the Act
But whereas in this case in respect of the partnership business the family as such has nothing to do with its control and management we fail to see how the existence of such a partnership will determine residence of the family within the meaning of section 4Ab Therefore we are of the opinion that the High Court correctly answered the question The appeal fails and is dismissed with costs 82 630 HlDAYATULLAH J The Commissioner of Incometax Bombay City has filed this appeal after obtaining special leave from this Court against the judgment and order of the High Court of Bombay dated February 16 1955 in a Reference under section 661 of the Indian Income tax Act
By the judgment under appeal the High Court in agreement with the decision of the Income tax Appellate Tribunal Bombay given earlier answered in the negative the following question  Whether the Hindu undivided family of Gandalal represented by Nandlal in the firm of Amulakh Amichand  Co of Bombay was resident in the taxable territories in the year of account relevant for the assessment year 1945 46  The facts briefly stated are as follows There was in Wadhwan State in Kathiawar a Hindu undivided family consisting of Gandalal and his four sons Girdharlal Hangraj Nandlal and Ramniklal
This family was doing business in cloth
In 1944 Nandlal went to Bombay and started on April 25 1944 a cloth business in partnership with three strangers known as Amulakh Amichand  Co Nandlal s sare was ten annas and that of his three partners six annas
All the capital of the new firm was supplied by Nand lal and for this purpose he received two remittances of Rs 50000 each on April 13 and 27 in the year 1944 and two other remittances aggregating to Rs 50000 on June 8 and 29 in the same year
Thus a total sum of Rs 150000 was sent from Wadhwan to Bombay
Subsequently Girdharlal also went to Bombay and joined Amulakh Amichand  Co and he was given five annas  share out of Nandlal s share of ten annas
In 1946 Amulakh Amichand  Co started another firm at Banaras under the same name
The partners of the Banaras firm were the partners of the firm at Bombay an outsider from Banaras and a third brother of Nandlal
He did not bring any capital and presumably received a share along with his other two brothers
For the assessment year 1945 46 the Income tax Officer treated the Hindu undivided family as resident in British India under section 4Ab of the Indian Incometax Act and assessed the family after adding the sum of Rs 150000 to the income from the firm of 631 Amulakh Amichand  Co Bombay
The appeal to the Appellate Assistant Commissioner failed
On further appeal the Appellate Tribunal Bombay held that Nandlal was still a coparcener and not a separated member because the partition which was set up by him was not meant to be acted upon
The Tribunal however held that the decision of the Income tax Officer and the Appellate Assistant Commissioner that the Hindu undivided family was resident in British India in the relevant account year was not sound
The Appellate Tribunal therefore ordered that the sum of Rs 150000 included under section 41b iii of the Income tax Act could not be included and must be deleted
According to the Tribunal the business at Bombay and later the business at Banaras could not be considered to be I the affairs of the Hindu undivided family of Gandalal  so as to bring the matter within section 4Ab of the Act
The Appellate Tribunal held that these two businesses belonged to different entities  namely the Bombay and Banaras firms and that these firms could not be said to be  the affairs of the Hindu undivided family  but the affairs of Nandlal and his brothers under the law of Partnership
At the instance of the assessee the Tribunal referred the above question for the opinion of the High Court
The Bombay High Court referred to the decision of this Court in V V N M Subbayya Chettiar vs Commissioner of Income tax Madras 1 and pointed out that by the expression  the affairs of the Hindu undivided family  was meant not the private or domestic affairs of the family but some affairs which had some reference to the Income tax Act
The word  affairs  must it was held be construed in relation to taxation
The learned Judges then referred to the position of a coparcener entering into partnership with strangers and observed that when a coparcener carried on such business in partnership on behalf of the Hindu family  the affair  was of the coparcener and not of the family but when the business was carried on by the family itself then it was  the affair  of the family and not of the coparcener or coparceners
They pointed out that in the cited case Fazl Ali J seemed to have held that even though a partnership 1  632 business might be an activity  of the Hindu family it would not be  the affair  of the Hindu family in the sense in which the expression was used in the Indian Income tax Act
They however held that it did not follow that every activity of a coparcener or of a Karta even if the activity resulted in profit became  the affair  of the Hindu undivided family
Thus treating the business of Amulakh Amichand  Co as  the affair  of the coparceners concerned and not of the Hindu undivided family the High Court in agreement with the opinion of the Appellate Tribunal answered the question in the negative
Before dealing with the arguments addressed in the case and the interpretation of the relevant provision it will be useful to summarise the findings
It is found that the Hindu undivided family did riot disrupt and partition the assets
Nandlal and Girdharlal continued to be coparceners and the sum of Rs 150000 represented the funds of the Hindu undivided family
There is no finding that besides the entering into partnership by some of the coparceners with outsiders there was in the taxable territories any other business
There is also no finding by the Tribunal that no part of the control and management was exercised in British India though the High Court did find this to be so
We are concerned in this case with the application of section 4Ab which deals with residence  in the taxable territories of Hindu undivided family firm or other association of persons
Before the present amendment the section read as follows 4A
For the purposes of this Act      ba Hindu undivided family  firm or other association of persons is resident in British India unless the control and management of its affairs is situated wholly without British India
The words  British India  have now been replaced by the words  taxable territories   but the reasoning applicable to them is the same
The section was plain in so far as its intent and purpose was concerned
It made a Hindu undivided family resident in British India unless the control and management of its affairs 633 was situated wholly without British India
If the control and management was wholly or partly situated in British India then the family was treated as a resident
The words  wholly without British India  showed that even if a part of the control and management be it ever so small a part was exercised in British India the provision was satisfied
So far there is no dispute and it is further clear that the St affairs  of the Hindu undivided family refer to something connected with the law of Income tax
The section does not refer to the domestic or private affairs of the Hindu undivided family
It refers to an activity resulting in the making of income
Parties are agreed and I think rightly that this aspect of the law is clear and unambiguous
It is also settled after the decision of this Court in Subbayya Chettiar s case 1
Parties are however at variance when one comes to the interpretation of the words  its affairs  in the section and tries to find the situs of the control and management
In cases where the Hindu undivided family itself or through its Karta controls and manages business in the taxable territories no difficulty arises but where as here the Hindu undivided family is represented by one of its coparceners as a partner in a firm one faces some difficulties
Two questions then arise which are aIs there any  affair of the Hindu undivided family in the taxable territories in such circumstances and bIs the fact that the coparcener controls and manages the partnership wholly or partly sufficient to enable one to say that the control and management of the family is located in the taxable territories  Now it is settled law that a Hindu undivided family cannot be a partner under the law of Partnership
Such of the coparceners who join the partnership are regarded quoad the other partners as individuals in their own names and rights
Yet the benefits that arise to them from the partnership belong to the family and their rights are the asset of the family
We have recently held in Charandas Haridas V com missioner of Income tax Bombay 2 that in such a situation the matter has to be looked at in the light of three 1  2 196O 3 SCR 296
634 separate and independent branches of law
They are the law of Partnership the Hindu law and the law relating to Income tax
The implications of a coparcener joining as partner with strangers are different when one views the matter from the angle of the law of Partnership or from the angle of the Hindu law or the law of Income tax
In so far as the law of Partnership is concerned the coparcenary has no place in the partnership and the coparcener partner is everything
But viewed from the angle of Hindu law the position is entirely different
In this connection we have to bear in mind two principles of the law relating to a coparcenary which are well settled
The first is contained in a well known passage in the judgment of Lord Westbury in Appovier vs Rama Subba Aiyan which reads  According to the true notion of an undivided family in Hindu law no individual member of that family whilst it remains undivided can predicate of the joint and undivided property that he that particular member has a certain definite share
The proceeds of undivided property must be brought according to the theory of an undivided family to the common chest or purse and then dealt with according to the modes of enjoyment by the members of an undivided family
 The second is equally well known and is found stated in the judgment of Turner L J in Katama Natchiar vs Rajah of Shivaganga 2 in the following words  There is community of interest and unity of possession between all the members of the family and upon the death of any one of them the others may well take by survivorship that in which they had during the deceased s life time a common interest and a common possession
 No doubt there are other principles also which qualify those quoted as for example the right of a coparcener to claim a partition or where such usage obtains to alienate his interest which give rise to the expression that the coparcener has a share
In point of Hindu law however a coparcener cannot claim 1 1866 11 MIA 75 89
2  61 1 635 any item of property or even a share of it as his own and his dealings with the assets are in so far as he is concerned for the benefit of the family
The law of Income tax makes the sole test for purpose of residence of a Hindu undivided family the existence of an a affair  and its control and management even partly in the taxable territories
For this purpose one may look at the actual facts and an inference from facts in the light of Hindu law is equally open
It is thus plain that whilst in the eye of the law of Partnership the coparcener who is a co partner is everything in the eye of Hindu law he is no more than a member of a body of owners
In attempting to find out if there is any affair  of the Hindu undivided family we can consider the matter from the point of view of Hindu law
If this is the true position of a coparcener in Hindu law it is difficult to accept the view of the High Court and of the Tribunal that there was no affair  of the family in British India
The High Court with respect posed the wrong question when it asked itself  was Amulakh Amichand  Co an affair of the family 
That question is self evident and the answer is no  from the point of view of the law of Partnership
The proper question to ask was as I have framed it viz  was there an affair of the Hindu undivided family in British India
To search and find this affair  it is not necessary to look for it within the partnership any more than to look for it in the affairs of a bank where the family keeps its money with which it does business
That this was not a mere activity  but an activity involving expenditure of family funds in British India and resulting in the earning of money is admitted on all hands
The income received from the partnership belonged to the family as is wellsettled
See Mangalchand Mohanlal In re 1 Murugappa Chetty  Sons vs Commissioner of Income tax 2 and Kaniram Hazarimull vs Commissioner of Incometax 3  and the numerous cases cited there
The affair if any which we have to find is not to be found within the four corners of the partnership but outside 1 2 3 636 it
The partnership was only the result of the business activity of the family and evidence of it
The affair we have to find must be regulated by Hindu law and not by the law of Partnership because a partnership is regulated by the two laws considered the other way round
The section we have to interpret speaks of the affairs of the Hindu undivided family whatever shape it may take and the enquiry is thus limited to what is the dictate of Hindu law
It is an error to think that one can ignore a palpable conclusion of that law and go to find the answer from the law of Partnership
Nor do I think that the decision of this Court in Subbayya Chettiar s case 1 laid down any contrary proposition
There the karta who visited India for a short period dealt with some matters including the starting of certain businesses
The Hindu undivided family was all the time in Ceylon and it was held that his actions could be described as  activities 
Indeed the matter was not decided as to whether the  affair  if there was one was of the family or of the coparceners and the case went against the assessee on the burden of proof which he had failed to discharge to bring his case within the exception
If the karta had lived in India or some other coparcener or coparceners had stayed on permanently to manage the  affairs  then the question would have been considered perhaps differently
In this case we are not concerned with the affairs  of the firm of Amulakh Amichand  Co but with the  affairs  of the Hindu undivided family
The coparceners who became partners could not say that they were not concerned with the Hindu undivided family to which they belonged and an undivided asset of which they owned in common with others
Their investing moneys becoming partners and running the partnership starting other partnerships were from the view point of the coparcenary according to Hindu law as much the affair of the rest of the family as their own
In view of what I have said the first of the two questions posed earlier must be answered in the affirmative that is to say that there was an 1  637 affair  of the Hindu undivided family in the taxable territories then British India in the circumstances of this case
The question then is where was the control and management of the Hindu undivided family located  If it was wholly located without the taxable territories then British India then the family would be nonresident
The burden was on the assessee to establish this and we were not shown any evidence in this behalf
The question can be decided here also on the burden of proof alone as was done in Subbayya Chettiar s case 1
It need not however be decided on that narrow issue for reasons  which will presently appear
Section 4A deals with residence of an individual at one end and of a corporation like the company at the other
It also deals with the residence of three entities viz Hindu undivided family firm and association of persons in the remaining part
The tests for these three categories are different
Special tests have been provided for individuals based on residence for a certain number of days
Two alternative tests have been provided for companies the first being that the control and management of their affairs must be situated wholly within the taxable territories
Where the control is without a company can still be taxed if its income within the taxable territories in the year of account omitting capital gains is greater than its income without the taxable territories with the same omission
The first provision is necessary because a company can have more than one residence its residence being where it  keeps house and does business 
The test is reversed for a Hindu undivided family which is non resident only if the whole of its control and management is situate without the taxable territories
The residence of the members of the coparcenary is not a relevant factor but if control and management is exercised by them within the taxable territory the family as a whole is treated as resident
In Subbayya Chettiar s case 1 this Court observed that  situated  implies functioning somewhat permanently though the management and control may be exercised 1  83 638 in more than one place
To prove that management and control is within the taxable territories something more than a casual activity  is needed
The same tests also apply to a firm and an association of persons
The words control and management  have been figuratively described as  the head and brain 
In the case of an individual the test is not necessary because his residence for a certain period is enough it being clear that within the taxable territories be would necessarily bring his  head and brain  with him
The  head and brain  of a company is the Board of Directors and if the Board of Directors exercised complete local control then the company is also deemed to be resident
In the case of firms association of persons and Hindu undivided family the control and management can be exercised by one or more of the group
So long as this control and management even partly is found and it must be so when some coparceners reside in British India and manage the affair the family must be treated as resident
The necessity for the test is thus obvious
The Income tax law anticipated that control and management of the affairs of Hindu undivided families firms and association of persons might easily be in two or more places one or more coparceners being within the taxable territories and the other or others without
To prevent the escape of tax and to get at the income of such families having multiple places of control and management it was provided that the whole of the control and management must be without the taxable territories to avoid the implication of residence
Otherwise different coparceners can manage different businesses in the taxable territories and the family cannot be regarded as resident if the karta lived outside an anomaly which does not really arise
In the present case can one say that the control and management was wholly without the taxable territories then British India  If one goes by the case set up by the assessee one finds that the clam was that there was a partition in the family and that Nandlal came to 639 Bombay as a separated member
This claim involves the admission that the affairs such as they were were not controlled from Wadhwan
Since however the case of partition pleaded by the assessee was not accepted it might be held that the family at Wadhwan was perhaps also in control
But it is equally clear that a part of the control of the affairs of the family was done in British India by those coparceners who became partners in the business and through whom and not directly from Wadhwan the partnership business at Bombay was run to the benefit of the family
Those partners who were also coparceners of the family arranged to start this business at Bombay and stayed on and managed it they started a fresh business at Banaras admitted a stranger as partner at the new place and presumably supplied capital from the Bombay firm or from the family  coffers
There is no claim at all that they supplied their own separate funds
All these actions were acts of control and management
They were not casual but permanent in character
Thusthe control and management of family affairs vis a vis the partnership was being done by them
The coparceners who Januslike face two ways cannot shelter behind the law of Partnership and claim that their action had no reference to the affairs  of the family which was at their back
I am not equating the affairs of the partnership with the affairs of the family
But the entire business involved a family undertaking and those affairs were being managed in British India
This control and management of the businesses was in fact and for purposes of the law of Income tax control and management of the  affairs  of the Hindu undivided family within British India and the family must therefore be regarded as resident in the accounting year within British India
In my judgment the decision of the Bombay High Court with respect was erroneous
The answer to the question ought to have been in the affirmative
I would therefore dissolve the answer given by the Bombay High Court and instead would answer the question in the affirmative
I would also order that 640 the respondent bear his own costs and pay those of the appellant here and throughout
ORDER OF COURT
In accordance with the majority judgment of the Court the appeal is dismissed with costs
Appeal dismissed


Summary:
Section 117 of the Representation of the People Act 1951 provided  The petitioner shall enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees has been made by him in favour of the Secretary to the Election Commission as security for the costs of the petition The respondent who filed an election petition challenging the validity of the appellant s election deposited the amount as required under section 117 of the Act
In the deposit receipt the words  Secretary to the Election Commission  were put in as against the name of the person on whose behalf money was paid
The appellant contended that the receipt in this form showed that the money had been paid by the respondent acting for the 517 Secretary to the Election Commission and not by him in favour of the latter and that as the receipt was therefore not in terms Of section 117 the election petition should be dismissed
The Tribunal accepted the appellant s contentions and dismissed the election petition under the provisions of section 903 of the Act
Held that the words  on whose behalf  in the deposit receipt in the context must mean  in whose favour  and that the receipt was in full compliance with section 117 of the Act
Held further that the order passed by the Tribunal under the powers contained in section 903 Of the Act dismissing the election petition is an order under section 98 and is appealable under section 116A
The word  trial  in section 98 of the Act means the entire pro ceeding before the Tribunal from the reference to it by the Election Commission to the conclusion
Harihar Singh vs Singh Ganga Prasad AIR 1958 Pat 287 disapproved
Harish Chandra Bajpai vs Triloki Singh   relied on