Actual control in British India is required to tax foreign business income; mere presence of the karta is insufficient.

The ordinary meaning of "control" under the relevant proviso to section 4(1) requires actual control in British India over a foreign business; mere physical presence of the karta or manager in British India is not enough. The text states that income arising without British India remains outside assessment unless the business was controlled or set up in British India or the income was brought into British India during the year. Copies of day-books sent to British India were also insufficient where management abroad continued with the eldest son. On that basis, the question was answered in favour of the assessee.

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Issues: Whether the mere presence of the karta or manager of a joint Hindu family in British India, without any act of control there, is sufficient to treat a foreign business as controlled in British India for the purposes of assessment.

Analysis: The relevant proviso to section 4(1) excludes income arising without British India unless it is derived from a business controlled or set up in British India or brought into British India during the year. The expression "control" was held to bear its ordinary meaning. It was not enough that the karta was physically present in British India for part of the accounting year. There had to be evidence of actual control in British India over the foreign business, and the finding of the Tribunal was that no such control was exercised after his return. Receipt of copies of day-books was also insufficient to establish that control had been exercised, particularly when the eldest son had been left in management abroad.

Conclusion: Mere presence of the manager or karta in British India does not by itself justify a finding that control of a foreign business was exercised within British India. The question was answered in favour of the assessee.

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