Srinivasa Aiyangar, J.
1. The question propounded for our decision is as follows:
In the circumstances of this case, can the assessee, the T.S. Firm, be said to be resident in British India?
2. The Income-tax Acts take residence as the test which is no doubt easy enough to apply in the case of an individual but leads to difficulties when you are dealing either with a limited company or a partnership because, as Lord Loreburn pointed out in De Beers Consolidated Mines Co., Ltd. v. Howe (1906) AC 455 it is artificial to talk of the residence of a company which is necessarily a metaphorical expression as:
a company cannot eat or sleep though it can keep house and do business.
3. He goes on to cite some earlier decisions and concludes thus (earlier decisions which he holds as laying down the rule that a company resides for the purpose of income-tax where its real business is carried on) and he adds:
I regard that as the true rule, and the real business is carried on where the central management and control actually abides.
4. The question was carried further in the case of The Swedish Central Railway Company, Ltd. v. Thompson (1925) AC 495. There the contention was that a company could have more than one residence because the central management and control might be divided between two places of business, so that a company could be said to have two residences. I cite a passage from the judgment of Viscount Cave, the last paragraph of page 501:
The effect of this decision is that, when the central management and control of a company abides in a particular place, the company is held for purposes of income-tax to have a residence in that place; but it does not follow that it cannot have a residence elsewhere. An individual may clearly have more than one residence : see Cooper v. Cadwalader (1904) 5 Tax Cases 101; and on principle there appears to be no reason why a company should not be in the same position. The central management and control of a company may be divided, and it may 'keep house and do business' in more than one place; and if so, it may have more than one residence.
5. If therefore it can be shown that the central management and control of a company or partnership, by which words I understand the management and control of the whole of its business, was divided between two localities, each of them may be said to be a residence of the company for the purposes of the Income-tax Act. But I read the learned Lord Chancellor as emphasising the words 'central management and control' by which I understand that the suggested second residence must not merely have a delegation of management of some portion of the partnership business, however extensive, but delegation of some portion of the management of the business as a whole. With these considerations to guide me I approach the Commissioner's findings of fact in this case. Unfortunately he had directed himself to the view that what he was largely concerned with was the question of where the individual partners actually had physical places of residence and part of his reasoning, at any rate, the finding that the concern was assessable at Madras, was because the partners from time to time came over to Madras to look into the affairs of the Madras branch or perhaps of all the branches in British India and resided in a house in Madras belonging to the firm in Coral Merchant Street for varying periods. That, in my opinion, is a wholly irrelevant consideration. The firm for the present purposes may be considered to have had three classes of activities. In Ramachandrapuram the partners regularly resided in what the Commissioner calls palatial residences and there exercised a general supervising and directing power over the whole of the business. Secondly, it had many branches in British India, which, I think he means to suggest, were generally controlled from Madras. Finally there were branches entirely outside British India in the Malay States and elsewhere and it is with the profits earned in these branches that we are concerned in this case. Had it been found as a fact that the control of the whole business, that is to say, the business including the branches outside British India was exercised both from Ramachandrapuram and Madras, it may very well be that the principle of the Swedish Central Railway Company's case would apply and that the central management of the business as a whole might be considered to be split up between Ramachandrapuram and Madras. I cannot see anything in the findings to give the slightest colour to any suggestion of the kind or to hint that any part of the control of the overseas branches even passed through the Madras or any other branch in British India. In these circumstances I am of opinion that the question propounded to us must be answered in the negative.
6. It was suggested in the course of the argument that the case might be sent back for fresh findings of fact in view of the observations of this Court and the test laid down by us. I cannot accept such a course because I think that the findings of fact must be taken to be complete and, though no doubt the Commissioner's mind was not applied to the exact point to which we think it ought to have been applied, I cannot doubt that if any evidence had been available as to any kind of management or supervision being exercised from British India over the overseas branches, the Commissioner would have stated it as supporting his case and set it out.
7. The Commissioner will pay the assessee's costs of this reference. Fees Rs. 250.
8. My learned brothers have seen this judgment and concur in it.