SUNDARAM.V.V (ACCOUNTS) (60 Points)
15 May 2017
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171778 Points)
Replied 15 May 2017
Non Agricultural.
Supreme Court held that,
Agricultural income as defined in the Act is obviously intended to refer to the revenue received by direct association with the land which is used for agricultural purposes and not by indirectly extending it to cases where that revenue or part thereof changes hands either by way of distribution of dividends or otherwise.
In fact and truth dividend is derived from the investment made in the shares of the company and the foundation of it rests on the contractual relations between the company and the shareholder.
Dividend is not derived by a shareholder by his direct relationship with the land. Therefore whosoever receives profit from the land directly is entitled to the exemption .
A shareholder does not receives profit directly from land , though the company may be involved in agricultural activities and is not entitled for exemption. (1955 AIR 740)
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