Statutory definition of residence controls tax liability; international law cannot widen taxable territories without express legislative support.

The taxing statute expressly defined residence in the taxable territories and the scope of taxable territories, so the statutory test in section 4A had to be applied as written. The High Court held that international law could not be used to enlarge that definition or create a wider deeming fiction without statutory support, and the special rule for Government servants posted outside the territories did not extend to their family members. On those facts, the assessee was not a resident of the taxable territories for the relevant assessment years and was not liable to be taxed on that basis.

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Issues: Whether the assessee was a resident of the taxable territories for the assessment years 1960-61 and 1961-62 and liable to be taxed on that basis.

Analysis: The relevant provisions of the Indian Income-tax Act, 1922 contained an express definition of residence in the taxable territories and also defined the scope of taxable territories. The conditions for residence laid down in section 4A were not satisfied by the assessee. The Court held that where the statute itself provides a clear rule, there is no room to resort to principles of international law to enlarge the definition of residence. The special provisions dealing with Government servants posted outside the taxable territories further showed that no similar deeming rule existed for family members of such servants.

Conclusion: The assessee was not a resident of the taxable territories for the relevant assessment years and could not be taxed on that basis. The answer to the reference was against the assessee and in favour of the Revenue.

Ratio Decidendi: Where the taxing statute expressly defines residence and taxable territories, that definition must be applied as written, and international law cannot be invoked to create a wider deeming fiction in the absence of statutory support.

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