Agricultural income exemption applies to thika profits, even when received through a money-lending business.

Agricultural income derived as thika profits from land used for agricultural purposes remained exempt under the taxing statute, because the exemption attaches to the character of the receipt itself. The fact that the recipient was engaged in money-lending did not convert the receipt into taxable business income, since agricultural income is expressly excluded from the scope of the Act. The amount therefore could not be assessed merely because it was received in the course of a business activity, and the claimed exemption was upheld.

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Issues: Whether the receipt characterised as thika profits from land used for agricultural purposes was agricultural income exempt from tax, and whether its receipt in the course of a money-lending business made it taxable as business income.

Analysis: The receipt formed part of rents derived from land used for agricultural purposes and therefore fell within the statutory definition of agricultural income. The taxing provisions were subject to the express exclusion of agricultural income, and that exemption attached to the character of the income itself, not to the character of the recipient or the business through which it was received. The fact that the respondent was a money-lender did not alter the statutory exemption, because agricultural income was excluded altogether from the scope of the Act.

Conclusion: The receipt was not taxable and remained exempt as agricultural income, notwithstanding that it arose in the course of the respondent's money-lending business.

Final Conclusion: The appeal failed and the exemption claimed by the respondent was upheld.

Ratio Decidendi: Agricultural income retains its exempt character under the taxing statute regardless of the recipient's business activity, and cannot be assessed as business income merely because it is received in the course of a money-lending business.

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