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Issues:
1. Whether the remuneration received by the appellant as Mutawalli is exempt from taxation as agricultural income? 2. Interpretation of Section 2(1) of the Indian Income-tax Act, 1922 in relation to the appellant's case. The judgment involves a dispute regarding the tax exemption of the appellant's remuneration as Mutawalli of a wakf estate. The appellant claimed that the income received is exempt from taxation as agricultural income under Section 2(1) of the Income-tax Act. The High Court rejected the appellant's claim, leading to the appeal before the Privy Council. The wakf estate's income is acknowledged as agricultural income. The appellant's remuneration was fixed under a Scheme of Administration, providing a monthly amount and allowances. The appellant argued that his remuneration qualifies as agricultural income under the Act, thus exempt from taxation. The appellant referred to a previous decision by the Privy Council regarding agricultural income derived from agricultural lands. In that case, it was established that the nature of the business does not affect the exemption of agricultural income under the Act. However, the Privy Council distinguished the present case from the previous decision. The appellant's role as Mutawalli does not directly involve collecting rents from agricultural lands but is tied to the wakf estate's income and his duties as a manager. The appellant's remuneration is not dependent on the nature or income of the wakf estate, unlike the direct collection of rents in the previous case. The Privy Council agreed with the High Court's decision that the appellant's remuneration, although derived from agricultural income of the wakf estate, does not qualify as agricultural income received by the appellant individually. Therefore, the appellant's claim for tax exemption on his remuneration was denied. The judgment emphasized that a different scenario would arise if the remuneration was based on a fraction of the wakf estate's income or a percentage commission. However, in this case, the fixed remuneration does not align with the definition of agricultural income for individual taxation purposes. As a result, the Privy Council advised affirming the High Court's judgment and dismissing the appeal with costs.
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