Law: Income Tax Act, 1922

Section: 2(1),4(3)(viii)

Income tax Act (XI of 1922)-----Ss. 2(1), 4(3) (viii) " Agricultural income Income of assessee in whatever character he receives must itself be of that character to earn exemption Source of receipt or method of calculation not relevant. Where an assessee receives income, not itself of a character to fall within the definition of agricultural income contained in the Act, such income does not assume the character of agricultural income by reason of the source from which it is derived, or the method by which it is calculated. But if the income received falls within the definition of agricultural income it earns exemption, in whatever character the assessee receives it. Where the assessee received no agricultural income as defined by the Act ; it received remuneration under a contract for personal service calculated on the amount of profits earned by the employer, pay¬able, not in specie out of any item of such profits, but out of any moneys of the employer available for the purpose, the remuneration is not agricultural income and is not exempt from tax. Gopal Saran Narain Singh v. Commissioner of Income tax, Bihar and Orissa 62 I A 207 ; Commissioner of Income tax, Bihar and Orissa v. Maharajadhiraj of Darbhanga 62 I A 215 ; Nawab Habibullah v. Commissioner of Income tax, Bengal (i942) L R 70 I A 14 and Muhammad Isa v. Commissioner of Income¬-tax, Central and United Provinces I L R (1942) All. 425 ref. JUDGMENT SIR JOHN BEAUMONT. This is an appeal from a judgment of the High Court of Judicature at Bombay dated the 27th March, 1945, given upon the reference of a question of law made to the Court under section 66 (1) of the Indian Income tax Act by the Appellate Tribunal. The question referred to the High Court was in the following terms: " Whether, in the circumstances of this case, that portion of the income received by the assessee from the principal company of Marsland Price and Company Limited which is proportionate to the agricultural income earned by the principal company, is agricultural income within the meaning of section 2 (t) of the Indian Income tax Act, 1922, and exempt from assessment under the provisions of section 4 (3) (viii) of the Act." The High…

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