Compensation for requisitioned agricultural land is not agricultural income when it does not arise from cultivation or rent.

Compensation received for requisition of agricultural land was held not to retain the character of agricultural income because it did not arise from agricultural operations, cultivation, rent, or revenue derived from land used for agriculture. The amount was paid as statutory compensation for deprivation of possession and income, not as income generated by the land's actual agricultural use. An indirect link to agricultural land was insufficient to bring the receipt within the statutory definition of agricultural income. It was therefore assessable to tax and fell outside section 2(1)(a) and section 2(1)(b)(i) of the Indian Income-tax Act.

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Issues: Whether compensation received for requisition of agricultural land retained the character of agricultural income and was exempt under the definition of agricultural income in the Income-tax Act.

Analysis: Agricultural income under the Act must be rent or revenue derived from land used for agricultural purposes, or income derived from such land by agriculture. The decisive requirement is that the income must arise as a direct result of agricultural operations or from the actual use of the land for agriculture. Compensation paid for requisition of land by military authorities was not paid because of cultivation, tenancy, or agricultural use by the recipient, but as statutory compensation for deprivation of possession and income. Indirect reference to agricultural land is insufficient. The land was not used by the requisitioning authority for agricultural operations, and the amount received did not arise from cultivation or from rent from a tenant carrying on agriculture.

Conclusion: The compensation was not agricultural income within section 2(1)(a) or section 2(1)(b)(i) of the Indian Income-tax Act and was assessable to tax.

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