Case: Commissioner of Income Tax, Madras Vs. K. S. Ratnaswamy

consequent right to occupy it without anything more would not be sufficient to satisfy the requirements of s. 4A(a)(ii), for, the requirements thereof are : not only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home. The material on record shows that the family house in which he stayed was neither his abode or home nor was it maintained by Ganesa at the instance of the assessee or for his benefit. 8. Turning to the two decisions--one of the Madras High Court and the other of the Gujarat High Court--on which reliance was placed by counsel for the revenue, we may at once say that both the decisions are clearly distinguishable. The decision of the Madras High Court in Zackariah Sahibs case [1952] 22 ITR 359 dealt with a case of an assessee who was a Muhammadan merchant. He carried on business in Ceylon and resided there. His parents lived in British India, as it then was, in a house owned by his mother. The assessees wife also lived in British India--sometimes with his parents and sometimes with her parents. The assessee was remitting monies now and then to his parents for their maintenance. He visited British India during the year of account and stayed in his mothers house with his parents. The Appellate Tribunal held that the assessee was resident in British India within the meaning of s. 4A(a)(ii). Reversing this decision, the Madras High Court held that the assessee did not maintain a dwelling place in British India and that his mothers house was maintained for the parents of the assessee and not for the assessee himself. Obviously, the house belonged to the mother of the assessee, which he had no legal right to occupy, and, therefore, it could not be said that the assessee maintained a dwelling place in British India. Counsel, however, relied upon certain observations made by Viswanatha Sastri J., in that judgment, which run thus: The expression maintains a dwelling place connotes the idea that the assessee owns or has taken on rent or on a mortgage with possession a dwelling house which he can legally and as of right occupy, if he is so minded, during his visit to British India ...... In our opinion, the expression has maintained for him would certainly cover a case where the assessee has a right to occupy or live in a dwelling place during his stay in British India though the expenses of maintaining the dwelling place are not met by him in whole or in part. A member of an undivided Hindu family ... has a right to live in the family-house when he goes there, though the house is maintained by the manager of the family and not by the assessee from his own funds .... In such cases it can be said that the assessee has a dwelling place maintained for him by the manager of the family for he has a right to occupy the house during his visits to British India. 9. Relying on the aforesaid passage, counsel urged that, in the instant case, the house at Orathanadu was maintained by Ganesa as a karta of the family and since the assessee as a coparcener had a right to live in it during his visits to India, it must be held that the assessee had maintained for him a dwelling place in India. It is not possible to accept this contention, for, in our view, the aforesaid passage, taken in its content, does not lay down as a proposition of law that mere ownership of a fractional share in a family house with a consequent right to occupy the same with nothing more would constitute it a dwelling house of such owner within the meaning of s. 4A(a)(ii) ; for, it must further be shown that it was maintained by the manager at the instance of the assessee and for his benefit. That is how the aforesaid passage has been partly explained and, in our view, rightly, by the Madras High Court in a subsequent decision in CIT v. Janab A. P. Mohamed Noohu [1961] 43 ITR 88 . The Gujarat decision in Ramjibhai Hansjibhais case [1964] 53 ITR 547 was clearly a case where the joint family house was maintained as a dwelling place for the benefit of all the members of the joint family, including the assessee. The main contention urged on behalf of the assessee in that case was that the dwelling house was not maintained for the assessee as an individual but it was maintained not only for him but for other members of the joint family as well and, therefore, the requirements of the section were not satisfied. The contention was negatived. In other words, it was not disputed in the Gujarat case that a dwelling house was maintained by the manager of the family for the benefit of the assessee. In the instant case, on the facts, it has been found that the family house was maintained by Ganesa not for the assessee nor for his benefit but for the other family membersHaving regard to the above discussion, it is clear that though the assessee could be said to have had a share in the joint family house with a consequent right to occupy the same, it could not be said that the said family house was maintained by Ganesa as the karta of the family as a dwelling place for the assessee or for his benefit nor was it maintained by him at the instance of the assessee. Moreover, his stay in the family house has been found to be as a guest enjoying the hospitality of his kith and kin rather than as an inhabitant of his abode or home. In this view of the matter, the assessee, in our, view, was rightly regarded as a non-resident. 10.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]At the outset it may be pointed out that the section uses the expressiondwelling place , a flexible expression, but the expression must be construed according to the object and intent of the particular legislation in which it has been used. Primarily, the expression meanswhere an individual is supposed usually to live and sleep and since the expression has been used in a taxing statute in the context of a provision which lays down a technical test of territorial connection amounting to residence, the concept of an abode or home would be implicit in it. In other words, it must be a house or a portion thereof which could be regarded as an abode or home of the assessee in the taxable territories. In our view, this aspect of the matter has been rightly emphasized by the Bombay High Court in Fulabhai Khodabhais case [1957] 31 ITR 771, 776, 777It is, therefore, not possible to accept the contention of learned counsel for the revenue that it is erroneous to introduce the concept of home or abode into the sectionSecondly, the section uses two expressions :he maintains a dwelling placehas maintained for him a dwelling place . The latter expression obviously means he causes to be maintained for him a dwelling place. This is clear from the fact that the relevant provision in the 1961 Act has now been altered and it sayshe causes to be maintained for himand in the Notes on Clauses to the concerned Bill it has been explained that the wordsin s. 4A(a)(ii) have been replaced in the draft by the wordscauses to be maintained , which express the intention better. Now, in either of these expressions the volition on the part of the assessee in the maintenance of the dwelling place emerges very clearly; whether he maintains it or he causes it to be maintained, the maintenance of the dwelling place must be at his instance, behest or request and when it is maintained by someone else other than the assessee, it must be for the assessee or for his benefitIt is true that the house at Orathanadu was at the material time a joint family house in which the assessee as a coparcener had a share and interest ; it is also true that as a coparcener he had a right to occupy that house without any let or hindrance, but mere ownership of a fractional share or interest in the family house with the consequent right to occupy it without anything more would not be sufficient to satisfy the requirements of s. 4A(a)(ii), for, the requirements thereof are : not only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home. The material on record shows that the family house in which he stayed was neither his abode or home nor was it maintained by Ganesa at the instance of the assessee or for his benefitIt is not possible to accept this contention, for, in our view, the aforesaid passage, taken in its content, does not lay down as a proposition of law that mere ownership of a fractional share in a family house with a consequent right to occupy the same with nothing more would constitute it a dwelling house of such owner within the meaning of s. 4A(a)(ii) ; for, it must further be shown that it was maintained by the manager at the instance of the assessee and for his benefit. That is how the aforesaid passage has been partly explained and, in our view, rightly, by the Madras High Court in a subsequent decision in CIT v. Janab A. P. Mohamed Noohu [1961] 43 ITR 88  In the instant case, on the facts, it has been found that the family house was maintained by Ganesa not for the assessee nor for his benefit but for the other family membersHaving regard to the above discussion, it is clear that though the assessee could be said to have had a share in the joint family house with a consequent right to occupy the same, it could not be said that the said family house was maintained by Ganesa as the karta of the family as a dwelling place for the assessee or for his benefit nor was it maintained by him at the instance of the assessee. Moreover, his stay in the family house has been found to be as a guest enjoying the hospitality of his kith and kin rather than as an inhabitant of his abode orn this view of the matter, the assessee, in our, view, was rightly regarded as a non-resident.