JUDGMENT - Chagla, C.J.

1. The question that arises in this reference is whether the assessee company is a resident company. The assessment years are 1944-45 and 1945-46. The company is a subsidiary company of the Scindia Steam Navigation Co. Ltd. and its business is stevedoring in Ceylon. It is registered in Bombay and its registered office is also in Bombay. The meetings of the board of directors are held in Bombay and also the meetings of the shareholders.

2. In order that a company should be resident it is necessary that the control and management of its affairs should situated wholly in the taxable territories or its income earned in the taxable territories should exceed its income without the taxable territories in that year. In this case we are not concerned with the second part of the definition because the income of this company in India was Rs. 3,791 whereas its total world income was Rs. 3,28,108, the bulk of which was earned in Ceylon by the business which it did. In order to construe Section 4A(c) of the Income-tax Act, it is important to bear in mind that this section deals with residence and it deals with residence of individuals, Hindu undivided family, firms and oth

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