Residence of Hindu Undivided Family under tax law turns on where control and management are actually situated.

A Hindu undivided family is treated as resident in British India under Section 4A(b) unless the control and management of its affairs is shown to be wholly outside British India. The decisive test is the seat of direction and control over the family's income-related affairs, not mere physical presence, attendance in litigation or tax proceedings, or isolated business activity in British India. The party seeking the statutory exception bears the burden of proving exclusive foreign control with proper evidence. On the facts discussed, the absence of material showing continuous control from Colombo meant the presumption of residence was not displaced.

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Issues: Whether the assessee Hindu undivided family was resident in British India under Section 4A(b) of the Income-tax Act, and whether the assessee had discharged the burden of showing that the control and management of its affairs was situated wholly outside British India.

Analysis: Section 4A(b) treats a Hindu undivided family as resident in British India unless the control and management of its affairs is situated wholly without British India. The decisive inquiry is the seat of direction and control of the income-related affairs of the family. Mere physical presence in British India, attendance to litigation or income-tax proceedings, or carrying on isolated business activity there does not by itself establish a second centre of management. The party claiming the benefit of the statutory exception bears the onus of proving, by proper evidence, that the control and management of the family affairs was wholly outside British India. In the absence of the material that would normally show continuous control from Colombo, the presumption of residence was not displaced.

Conclusion: The assessee was resident in British India within Section 4A(b), and the finding that the exception was not proved was upheld against the assessee.

Final Conclusion: The appeal failed, and the assessment based on residence in British India was sustained, while leaving open the possibility of a different conclusion for future years on proper evidence.

Ratio Decidendi: Under Section 4A(b), a Hindu undivided family is resident in British India unless the assessee affirmatively proves that the control and management of its affairs was wholly outside British India; mere occasional activity in British India does not displace the statutory presumption without cogent evidence of exclusive foreign control.

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