Agricultural income exemption does not cover partner's managerial remuneration, which is taxed as salary-like service income.

Remuneration paid to a partner for supervising and managing agricultural property was held taxable as salary or service compensation, not exempt agricultural income under Section 4(3)(viii) of the Income-tax Act, 1922. The decisive factor was the character of the receipt: it was paid for extra work done in managing the concern, rather than as a profit share arising as of right from ownership of agricultural assets. The mere fact that the underlying source was agricultural property did not change the immediate nature of the payment, so the exemption for agricultural income was unavailable.

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Issues: Whether remuneration paid to a partner for supervision and management of an agricultural concern is exempt from taxation as agricultural income under Section 4(3)(viii) of the Income-tax Act, 1922.

Analysis: The payment was found to be remuneration for extra work done by one partner in managing the agricultural property, and not a share of profit received as of right from ownership of the agricultural asset. Although the ultimate source of the payment was agricultural property, the decisive character of the receipt was that of salary or remuneration for services rendered. A receipt of that nature falls within the charging provisions applicable to salary and does not become agricultural income merely because the underlying property is agricultural. The Court applied the principle that the character of the receipt depends on the immediate source and the nature of the payment, not merely on the nature of the asset from which it is derived.

Conclusion: The sum was not exempt from taxation under Section 4(3)(viii) of the Income-tax Act, 1922 and was taxable as salary or remuneration.

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