Remuneration for managing agricultural property is treated as salary, not agricultural income, and is taxable accordingly.

Remuneration paid to a partner for supervision and management of agricultural property constitutes salary/remuneration for services and not agricultural income under the statute; consequently such fixed managerial payments are taxable as income from salary rather than being treated as an appropriation of profit by reason of ownership. The analysis applies the statutory concept of salary and the scheme for firm profit appropriation, distinguishing an owner's share of agricultural profit from contractual or fixed payments for management services, and concludes that fixed managerial remuneration does not acquire agricultural-income character merely from its agricultural source.

---

---

Issues: Whether remuneration paid to a partner for supervision/management of agricultural property (Rs. 5,805) is exempt as agricultural income under Section 4(3)(viii) of the Income-tax Act.

Analysis: The payment is admitted to be remuneration for extra work performed by a partner in management of agricultural property and is treated as salary or remuneration rather than as a share of profit arising by right of ownership. Precedent distinguishes income received as an appropriation of ownership share from sums received as remuneration for services; fixed remuneration or salary payable for managing agricultural property does not become agricultural income merely because its source is agricultural property. The analysis applies the statutory concept of salary under Section 7 and the scheme for appropriation of firm profits under Section 10(4)(b), and relies on authorities holding fixed managerial remuneration to be taxable rather than agricultural income.

Conclusion: The remuneration paid to the partner for supervision/management is not exempt under Section 4(3)(viii) and is taxable as salary.

---