Place of effective management not proved in India; company's residency finding and global income addition could not be sustained.

Place of effective management in India was not established where the factual bases relied on for residential status were not supported by the documentary record. The appellate authority noted that the earlier view of a three-member collegium had been followed, but the underlying factual foundation remained unsound and unrebutted. On that basis, the finding that the company was resident in India for the relevant year could not be sustained, and the addition of its global income was liable to be deleted.

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Issues: Whether the assessee-company's place of effective management was in India so as to treat it as resident in India and tax its global income in India.

Analysis: The appellate authority recorded that the factual bases relied upon to conclude that the assessee's place of effective management was in India were not borne out by the documentary material placed on record. It nevertheless sustained the assessment only because the earlier collegium comprised of three Commissioners of Income-tax and the authority considered itself bound by that view. Since the factual foundation for the residential finding was itself found to be unsound and remained unrebutted, there was no sustainable basis to uphold the conclusion that the assessee had its place of effective management in India for the relevant year.

Conclusion: The finding that the assessee was resident in India on the basis of place of effective management was not sustained, and the addition of its global income was liable to be deleted.

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