Agricultural income exemption denied where shebait remuneration was contractual management pay, not rent or revenue from land.

A payment received by a shebait as remuneration under a trust deed was held not to be agricultural income merely because it was calculated as a share of trust income from agricultural land. The Court reasoned that the trust income itself may have been agricultural in the trustee's hands, but the assessee received the amount under a contractual covenant for management, without any beneficial interest in the trust property. Once appropriated as personal remuneration, the receipt lost the character of rent or revenue derived from agricultural land and was taxable. Exemption was therefore unavailable because the payment itself did not retain the required agricultural source character.

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Issues: Whether the amount received by the assessee in his character as shebait, being remuneration calculated as a share of the trust income, was exempt from income-tax as agricultural income.

Analysis: The trust income derived from agricultural lands was agricultural income in the hands of the trustee, but the amount paid to the assessee as remuneration arose from the covenant in the deed of trust conferring a right to compensation for management. The assessee had no beneficial interest in the trust properties and did not receive the amount as rent or revenue derived from land used for agricultural purposes. The source from which the remuneration arose and the character in which it was received were altered when the trust income was appropriated for personal remuneration, even though the remuneration was computed by reference to agricultural income.

Conclusion: The amount received as shebait remuneration was not exempt agricultural income and was taxable.

Final Conclusion: The appeal failed, and the assessee was not entitled to exemption in respect of the remuneration received from the trust.

Ratio Decidendi: A payment received under a contractual covenant for management is not agricultural income merely because it is quantified by reference to agricultural receipts; exemption applies only where the receipt itself retains the character of rent or revenue derived from agricultural land.

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