HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bombay City v. Nandlal Gandalal
Civil Appeal No. 788 of 1957
[1960] 3 SCR 620 ·
Indian Income-tax Act, 1922: sections 4A(b), 4(1)(b)(iii)
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. K. Das · J. L. Kapur · M. Hidayatullah
Assessment years: 1945-46
01 · Facts of the case
Coparceners of a Kathiawar HUF entered partnerships with strangers in Bombay and Banaras using family funds. Revenue treated the family as resident and taxed Rs. 1,50,000 remitted into British India. The Tribunal and High Court held the family non-resident.
Source: Primary report: SCR 622–626
02 · Discussion by the Hon’ble Court
The majority distinguished income ownership from control of the partnership. The HUF as such could not control or manage those firms; their existence alone did not locate control of the family’s affairs in British India. Hidayatullah J dissented: the family’s investment and continuing business activity through coparceners constituted family affairs managed partly within India.
Source: Primary report: Majority SCR 626–629; dissent SCR 630–640
03 · Judicial decision
By a two-to-one majority the family was not made resident by these partnerships; the High Court’s negative answer was upheld. The ownership of partnership income as HUF income was not reopened.
Source: Primary report: SCR 625–629, 640
04 · Outcome / in whose favour
Revenue’s appeal was dismissed with costs in accordance with the majority; the dissent’s proposed affirmative answer and contrary costs order were not operative.
Source: Primary report: SCR 639–640
05 · AKHB REVIEW POINT
Keep residential status distinct from beneficial ownership of income, and distinguish the majority holding from the dissent’s family-activity analysis. The result turns on the facts and the historical statutory test.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 21-page Supreme Court Reports scan. Any adjoining report fragments remain in the unchanged original and are excluded from this analysis.
Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.