Law:

Section:

JUDGMENT The question that has been referred to us is in these terms:- "Whether the assessee firm is a resident in British India within the meaning of Section 4A(b) of the Income-tax Act". With reference to income-tax, the assessment years in question are 1939-40, 1940-41, 1941-42 and 1942-43. With reference to excess profits tax, the chargeable accounting periods are 1st September, 1939 to 31st December, 1939, 1st January, 1940 to 31st December, 1940, 1st January, 1941 to 31st December, 1941. Though the assessments relate to different accounting periods, both before us and the Income-tax authorities as well as the Appellate Tribunal, the case has been presented on the footing that the essential facts and circumstances are the same throughout. The facts are shortly these. The assessee is a registered firm of seven partners carrying on the business of tea planters in Ceylon. The partnership owns tea estates compendiously styled "The Erin Estate". Tea is grown on this estate and is manufactured into a marketable product and sold in Ceylon through brokers or commission agents. The price is realised in Ceylon. These trading operations are carried on in Ceylon on behalf of the firm by an agent Ponnambalam Pillai who is residing there. It is not correct to state, as has been done in the statement of the case drawn up by the Appellate Tribunal, that Ponnambalam Pillai had a power-of-attorney from the partners empowering him to manage and control the business in Ceylon. Such a statement is opposed to the express sworn statement of the two major partners, Andiappa Pillai and Nagalingam Pillai. The power-of-attorney, to which apparently a reference was meant, has been placed before us and we find it is not a power-of-attorney executed by the firm or by any of the partners of the firm in their capacity as such partners. Though the partnership had been in existence from before 1938, a deed of partnership dated 5th March, 1942, was drawn up setting out the shares of the partners in the Erin Estate and providing for sundry matters connected with the partnership business. Clause 3 of the partnership deed ran thus:- "The estate shall be managed by the Superintendent Sriman…

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