COMMISSIONER OF INCOME-TAX Vs. TSFIRM, TANJORE

JUDGEMENT

(1.) The question propounded for our decision is as follows: In the circumstances of this case, can the assessee, the T.S. Firm, be said to be resident in British India?

(2.) The Income-tax Acts take residence as the test which is no doubt easy enough to apply in the case of an individual but leads to difficulties when you are dealing either with a limited company or a partnership because, as Lord Loreburn pointed out in De Beers Consolidated Mines Co., Ltd. V/s. Howe (1906) AC 455 it is artificial to talk of the residence of a company which is necessarily a metaphorical expression as: a company cannot eat or sleep though it can keep house and do business.

(3.) He goes on to cite some earlier decisions and concludes thus (earlier decisions which he holds as laying down the rule that a company resides for the purpose of income-tax where its real business is carried on) and he adds: I regard that as the true rule, and the real business is carried on where the central management and control actually abides.