LexTHE COMMISSIONER OF INCOME-TAX, BOMBAY CITY, BOMBAY versus NANDLAL GANDALAL.
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1960 Sahetzi!da Mohammad Kamgar _Shah v. Jagdish Chandra Deo Dhabal Deo Das Gupta J. 1960 April 21. 620 SUPREME COURT REPORTS [1960] In the present case the suit .is based on the second lease of 1919 which was executed in favour of the then Receiver. The acknowledgments by which limitation is claimed to have been saved is by a previous Receiver of the Estate through whom the appellant who is the present Receiver has derived his liability to pay the debt. Section 19 is therefore in terms appli- cable as the acknowledgments have been signed personally by those previous Receivers, and no recourse is needed by the p!Jintiff to the second part of Expla- nation II. This position was indeed fairly concluded by Mr. .Jha who agreed that in view of this it was not necessary for us to decide whether the Receiver of an Estate is by that fact itself an agent of the owners of the estate duly authorised to make acknowledgments under s. 19 of the Limitation Act. There can be no' doubt that the acknowledgments on which the plaintiff relies are acknowledgments within the meaning of s. 19 of the Limitation Act and save limitation in respect of the period prior to August 12. l 935. The Courts below were therefore right in rejecting the defendant's plea of limitation. As both the contentions raised before us fail, the appeal is dismissed with costs. Appeal dismissed. THE COMMISSIONER OF INCOME-TAX, BOMBAY CITY, HOMBAY v. NANDLAL GANDALAL. (S. K. DAS, J. L. KAPUR and M. HIDAYATULLAH, .JJ.) Income-fax-Assessment-Hindu undivided family carrying on business outside British India-Partnership entered into by coparce- ners with strangers in British India financed by remittances received from undivided family funds-Hindu undivided family, if resident m taxable territories-Indian Income-tax Act, 1922 (XI of 1922), ss. 4A(b). . N, a coparcener of the Hindu undivided family of G, carry- ing on business in Kathiwar, then outside British India, entered into a partnership with strangers in Bombay in 1944. A total sum of Rs. 1,50,000 was remitted to N from the undivided family - l ,.. .. ;., - '.i> ) - 3 S.C.R. SUPREME COURT REPORTS 621 funds and utilised as capital in the partnership business. N's brother joined the partnership in Bombay. The partnership started another firm in Banaras and a third brother of N joined the firm. For the year of assessment 1945-46 the Income-tax Officer held that the Hindu undivided family of G was resident in the taxable territories and included the said sum in the income of the family under s. 4(l)(b)(iii) of the Indian Income-tax Act, 1922, as having been brought into or received in British India in the relevant year and made the assessment on that basis. On appeal by the assessee the Appellate Assistant Commissioner affirmed the assessment but the Income-tax Appellate Tribunal holding that in the year of assessment the family was not resi- dent in the taxable territories deleted the said sum from the assess- ed income. The decision of the Appellate Tribunal was upheld by the High Court in a reference under s. 66(1) of the Act made at the instance of the appellant: Held (per S. K. Das and J. L. Kapur, JJ.), that the expres- sion 'control and management' occurring in s. 4A(b) of the Indian Income-tax Act means de facto control and management and the word "affairs" means the affairs of the Hindu un- divided family capable of being controlled and managed by the said family as such. It is .well-settled that a Hindu undivided family cannot exercise any controlling power of management of a partnership entered into by a coparcener with strangers either under the Indian Partnership Act, 1932, or under the Hindu law. The partnerships in the instant case could not, therefore, constitute affairs of the Hindu undivided family within the meaning of s. 4A(b) of the Act, although the incomes from the said partner- ships might belong to the said family, and could not determine its residence. The place of accrual of income of a Hindu undivided family and the place of its residence need not necessarily be the same under the Indian Income-tax Act, 1922. V. V. R. N. M. Subbayya Chettiar v. Commissioner of Income- tax, Madras, [1950) S.C.R. 961, Kshetra Mohan Sannyasi Charan Sadhukhan v. Commissioner of Excess Profits Tax, West Bengal, [1953] 24 I.T.R. 488 and B. R. Naik v. Commissioner of Income- tax, [1946] 14
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