9911796707
TMI Blog1983 (6) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas, the land belonged to the limited company, Shri Mehta got 20 per cent of the income from the farming operations. 4. In 1971, Escorts Farms (Ramgarh) Ltd., sold all the agricultural lands, belonging to it to 74 persons and each person purchased 12.5 acres of this land. Shri Mehta, his sons and his wife were independently partners in several agricultural farms. After the sale of land by the limited company, four partnership firms were brought into existence, which were named as (i) Northern Farms, (ii) Western Farms, (iii) Southern Farms, and (iv) Eastern Farms. In each firm, there were 19 partners and one member of Shri P.N. Mehta's family was taken as managing partner. While the land owning partners contributed land and some small capital, the members of the Mehta family joined as managing partner and became entitled to 20 per cent of the profit. Loss was to be shared by all the partners equally. 5. In the beginning, the result of these farms was not very satisfactory and some of the farms incurred losses, whereas, the others had only nominal profits. The four partnerships were the result of four different agreements and, as mentioned above, in each of the farms, one me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come arising in the hands of the guarantors. There is no dispute regarding the nature of the income in the hands of the partners of the firm and, admittedly, it has been treated as agricultural income. The assessee, as well as other guarantors, claimed that the income which arose in their hands, was also agricultural income and was, therefore, exempt from tax. In the case of Shri P.N. Mehta, there was a receipt of Rs. 21,530 from the Western Farms, Eastern Farms and Southern Farms. This amount was received as per guarantee agreement. According to the assessee's submission, all the guarantors were jointly in possession of all the land and were participating in farming activity. According to the submissions of the assessee, the possession of land and agricultural operations on it were the important factors to be taken into consideration. 9. The ITO was of the view that the guarantors had not contributed even an inch of land and they had received the above amount as guarantors, according to the agreement. The ITO did not accept the plea of the assessee that the amount received was in the nature of ' revenue ' and fell under section 2(1) of the Income-tax Act, 1961 (' the Act '). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Subhash Mehta 4. Shri Deepak Mehta 5. Smt. V.V. Mehta Northern Farms 18 Shri P.N. 1. Shri Ashok Mehta Mehta 2. Shri Subhash Mehta 3. Shri Rajan Mehta 4. Shri Deepak Mehta 5. Smt. V.V. Mehta It was submitted before the AAC that the ITO had totally ignored, the factual background, which culminated in the execution of these documents and also the material facts relating to the cultivation and the farming of these lands. The AAC had also forwarded the affidavit of the assessee as well as the written submissions to the ITO, who were representing the department. In the affidavits, as well as the written submissions, it had been contended that the guarantors along with the managing partners had taken possession of the land and had carried on farming operations from tilling to sale of the agricultural produce. It was pointed out that the guarantors could not have guaranteed a minimum return without ensuring the manner in which the farms were to be run and better results were to be achieved. It was further submitted before the AAC that the guarantee agreement was mainly for distribution of farms and these were a sort of supplementary deeds of partnership. In effect, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO. The AAC further held that the managing partners could alone not ensure efficient running of the farms and all of them combined together to produce better results. Shri P.N. Mehta, who was managing partner in Northern Farms, was acting as guarantor in other three Farms and similar was the position of other three persons. The AAC also accepted the plea of the assessee that there was an AOP carrying on the whole agricultural activity and the income arose to each member of the association according to the agreement. He, therefore, held that the income arising to the guarantors was agricultural income as it had direct relationship with the land and agricultural operations on it. 13. The departmental representative, besides relying on the order of the ITO, has submitted that the income in the hands of the guarantors has arisen from the guarantee agreements and the immediate source of such income was the guarantee given and not the agricultural activity on the agricultural lands. It was contended that the guarantors were not the partners of the firm, carrying on farming operations and they were to get some money because they had guaranteed certain minimum amount to the land ownin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were maintained for the joint operations and which showed purchase of inputs, like seed and fertilizers, payment to the labour and other persons working on the land and also the sale proceeds of the agricultural produce including sugarcane. It was, therefore, contended that the guarantee agreement modified the partnership deeds and these documents have to be considered along with the joint operations by all the guarantors on these lands. It was submitted that this resulted in a sort of joint venture on the agricultural land in which the partners of the firms and the guarantors came together to pool their lands as well as their experience and skill to produce agricultural income. It was pointed out that the guarantors did not become partners of the firm, but, as a result of the guarantee agreements, started sharing the agricultural income if there were adequate profits. 15. The learned counsel submitted that the ITO wrongly considered that agricultural income could arise only in the hands of the owner of the land. It was submitted that even the managing partners, in whose hand the income has been considered as agricultural income, were not owning any land. The position of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of K. Simrathmull v. CIT [1 967] 64 ITR 166. In this case, a money-lender had purchased some coffee estates and derived income and rent from them. The department considered the income to be income from money-lending business, but the Court held that it was agricultural income. It was observed by the Court that the character of agricultural income depends on its source and on the fact that it is derived from the possession of the agricultural land rather than from other circumstances. Neither the character of the recipient nor the fact that it was received in the course of money-lending business can alter the character as agricultural income. The Court further observed that the motive with which it is derived can hardly neutralise the character of the receipt and convert what is in truth and fact agricultural income into business income or income from other sources. The essence of the question as to the character of the income will be whether the income is derived from agricultural lands by actual agricultural operations. 18. The ITO had referred to the decision of the Supreme Court in the case of Raja Benoy Kumar Sahas Roy. We, however, do not consider it necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws on the question of AOP, and has submitted that, in the present case, all the members of the AOP were directly related to the agricultural land and agricultural operations. As the principle regarding the existence of AOP is very well established, we are not discussing them here. 23. The learned counsel for the assessee has relied upon the decision of the Bombay High-Court in the case of Manubhai A. Sheth v. N.D. Nirgudkar, Second ITO [1981] 128 ITR 87, wherein the scope of the word ' revenue ' has been discussed at page 104. It has been observed that ' revenue ' is used for income, as opposed to capital and all incomes were to be considered as ' revenue '. 24. We have considered the facts of the case and the arguments advanced by both the sides. In the present case, there is no dispute that the land belonging to the four farms were agricultural lands. It is also not in dispute that there have been agricultural operations on them, in the sense that there has been the basic operations necessary for tilling the land, sowing of the seeds, planting and then harvesting and selling the produce. All the activities, which go with the agricultural operations, have taken place in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income, which he received from the Northern Farm, is admittedly, agricultural income. Having regard to the joint operations and agricultural activity, it is difficult to hold that, in respect of the other forms, the assessee was carrying on some other type of activity. The nature of the activity for managing was the same as in the case of a managing partner. The joining of so many persons and their efforts was only to ensure better results and insurance against loss or small profits. The guarantors, along with the managing partners had taken control of the lands and but for such a control and joint activity, they would not have entered into guarantee agreements, which put a liability on them to make a specific payment to all the land owners. The guarantors acted as a body and took all the actions, which were necessary to make this agricultural venture a success. The payment, which has been made to the guarantors, is not by way of remuneration, as, if it had been so, they would have been entitled to it, even in the case of a loss or of inadequate profits. Under the guarantee agreement, they were to share agricultural income as such, whenever there was adequate and sufficient profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, if it otherwise falls under it. It was further held in the case of CIT v. Sir Kameshwar Singh [1935] 3 ITR 305 (PC) that there was no inherent contradiction between agriculture and business. I have, therefore, to hold that, in the present case, the AAC was justified in holding that the income arising to the assessee and similar other guarantors was agricultural income and the same was exempt under the provisions of section 10 of the Act, read with the definition as given in section 2(1). The order of the AAC is, therefore, upheld and the departmental appeal is dismissed. 27. The appeal is dismissed. Per Shri O.P. Garg, Judicial Member --- Having gone through the opinion recorded by my learned brother, I find myself unable to agree. 2. This appeal has been preferred by the revenue against order dated 21-4-1981 of the AAC. 3. 1975-76 is the assessment year concerned. The assessee is an individual deriving interest income, income as guarantor, share income from agriculture from two firms, namely Northern Farms and Family Farming. Previous year shown in the tabular statement over the assessment order is the year ended 31-3-1975. However, according to common case of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived under contracts of guarantee, as aforesaid. The learned AAC accepted the assessee's contention as correct. Vide para 12 of his order, the AAC enumerated three grounds of ITO's finding as follows : " i. The assessee has not contributed even an inch of land in the firms from where he received guarantee money. He has received the guarantee money simply because of an agreement between the partners and the guarantors vide separate guarantee deeds. ii. The assessee has not performed any basic operations nor any subsequent operations on land. iii. The nature and character of guarantee money is not that of agriculture as the assessee has not performed activities involving basic operations on land. The firms have appointed a managing partner to look after such activities on land." 7. Thereafter the learned AAC proceeded to note the assessee's version and accepted his claim. Vide para 19 of his order, the AAC after referring to K. Simrathmull's case rejected the ITO's reasoning that for earning agricultural income, ownership of agricultural land was a condition precedent. It was in para 25 onwards of his order that the AAC proceeded to record his own findings as follows : " T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in point. The assessee's learned counsel was asked as to on which of the portions of section 2(1), the assessee based his case. According to the assessee, the claim was based on sub-clause (a) and sub-clause (b)(i) and (ii) of section 2(1). Said provisions read as under : " In this Act, unless the context otherwise requires,---- (1) ' agricultural income ' means--- (a) any rent or revenue derived from land which is situated in India and is used for agricultural purposes ; (b) any income derived from such land by--- (i) agriculture ; or (ii) the performance by the cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market ; or " 11. The learned departmental representative submitted that the source of income of Rs. 12,374 received by the assessee was the contract of guarantee (copy at pages 37 to 41 of the assessee's compilation) entered into by Western Farms, the assessee and four other co-guarantors. According to the department, it was by virtue of the said contract of guarantee that each of the five co-guarantors, including the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived from land, which was used for agricultural purposes. Their Lordships of the Supreme Court categorically rejected the said contention of the assessee, Mrs. Guzdar, observing " such a position if accepted would extend the scope of the vital words ' revenue derived from land ' beyond its legitimate limits." Their Lordships further held that agricultural income as defined in the 1922 Act was obviously intended to refer to the revenue received by direct association with the land, which was used for agricultural purposes, and not by indirectly extending it to cases where that revenue or part thereof changed hands either by way of distribution of dividends or otherwise. We find that in the instant case, Western Farms after deducting expenses other than the amounts that were payable to the co-guarantors earned certain amounts by way of agricultural income and that when out of that agricultural income guarantee moneys were paid to five co-guarantors, including the assessee, that payment involved, what may be technically described, as second passage of income and the character of that income in the hands of recipient co-guarantors would depend on the contract of guarantee itself. In Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al operation as such on the part of the present assessee or any performance of cultivator's process on his part, as aforesaid. 14. Secondly, the learned counsel for the assessee referred as to the AAC's finding contained in paragraphs 25 onwards of his order and emphasised that the department has not been able to put dents in those findings. The only positive finding of primary facts by the AAC, as contained in said para 25, has been reproduced in extenso in para 6 of this order. That finding, as indicated above, does not, according to us, help to establish the ingredients requisite under sub-clause (b)(i) and/or (ii) of section 2(1). 15. Contract of guarantee in the instant case was not a verbal one. Copy of the contract, as indicated earlier, is available at pages 37 to 41 of the assessee's compilation. Firstly, we note whereas as per the terms of the partnership deed dated 4-12-1971, copy at pages 21 to 36, there were as many as 20 partners, namely, 19 persons being co-owners of the land cultivated by the partnership firm and one Shri Ashok Mehta, who had no share or interest in the said land, parties to the contract of guarantee were only 24 persons, 19 persons described in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where written documents exist they shall be produced as being the best evidence of their own contents. Similarly, at page 1919 of the said commentary, it is stated that when parties have deliberately put their mutual engagements into writing, it is only reasonable to presume that they have introduced into the written instrument every material term and circumstance. Consequently, other and extrinsic evidence is to be rejected, because such evidence, while deserving far less credit than the writing itself, would invariably tend, in many instances, to substitute a new and different contract for the one really agreed upon. In view of the said legal position, the assessee's contention that the terms of the contract of guarantee came to be simultaneously or subsequently varied as between the parties to that contract, cannot be entertained in the absence of a formal writing to that effect. The assessee's learned counsel also submitted that even if it is assumed that the terms and stipulations of the contract of guarantee as such did not come to be modified or varied by mutual agreement of the parties, it was essential for the guarantors to act in a particular manner involving agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri P.N. Mehta became the managing partner of Escorts Farms, a firm in which Escorts Farms (Ramgarh) Ltd. and Shri P.N. Mehta became partners He was getting 20 per cent of the income for managing the farm. Thus it is seen that the limited company, Escorts Farms and Shri P.N. Mehta became partners in a separate firm. The limited company Escorts Farms (Ramgarh) Ltd. in 1977 decided to sell the lands and they were in fact sold to about 74 persons, each of the purchaser obtained 12.5 acres of land. Most of the purchasers of the-land from the limited company were housewives and, therefore, they are not conversant with the agricultural operations. In the circumstances, Shri P.N. Mehta and his four sons, namely, Ashok, Subhash, Rajan and Deepak, entered into partnerships with those 74 buyers of land with an understanding that Mehta's family will do agricultural operations. Accordingly four separate partnerships were entered into under the name and style : (i) Northern Farms ; (ii) Western Farms ; (iii) Southern Farms ; and (iv) Eastern Farms. The constitution of these firms is as follows ---------------------------------------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. It was further decided that a minimum guaranteed profit of Rs. 2,800 per annum to each of the partners of the partnership firms would be given. If there is more profit after meeting all the expenses, it would be divided in the following manner : 90 per cent to the guarantors, 10 per cent will be distributed among the partners of the partnership firms. This document was made retrospective in operation from 1-7-1972 though it was actually executed on an anterior date. The guarantee agreement is totally silent as to the details of management of the farms or as to the possession of the farms to be taken over by the guarantors or such other details. Obviously the parties seem to have taken for granted that except that there is a guarantee agreement for giving a minimum profit to the partners, the earlier arrangement of managing the firms continued. At any rate I will advert to this aspect in some detail later. 3. In the year under appeal the guarantor (who is admittedly not a partner of the partnership firm) received his share of profit since there was excess profit after meeting the minimum guaranteed amount paid to the partners. The question that arose before the ITO is abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere fact that the amount was expressed in terms of a share of the surplus produce would not make the receipt in the hands of the assessee agricultural income, Mr. Nagarajan submitted. Mr. Nagarajan also referred to me the definition of agricultural income under section 2(1) and pointed out that since its character is retained in the hands of the recipient, it will not be treated as agricultural income exempt under section 10. 5. Mr. Ahuja for the assessee at the outset pointed out that the decision in Major Conville's case is not good law in view of the decision of the Supreme Court in CIT v. R.M. Chidambaram Pillai [1977] 106 ITR 292. Thereafter, he submitted that though the guarantee agreement does not speak of various other details as it was not intended to be a formal document, the matter must be understood in the background of all the facts. It was also pointed out that the guarantor was already managing the farms along with his other family members and a small change has been brought about in order to satisfy the land owners, who wanted the dissolution of the partnership firms. According to Mr. Ahuja the guarantee agreement is nothing but to bring about a joint venture be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. In fact the assessee filed an affidavit before the AAC giving all the details and this was examined by giving due opportunity to the ITO. The learned Judicial Member, however, while deciding the second appeal stated in his order that in view of section 91 of the Evidence Act, no evidence can be given beyond what is contained in the guarantee agreement which is reduced into writing. With great respect to the learned Judicial Member, I must observe that the correct position of law is otherwise. 8. First of all it is well settled that strict rules of evidence laid down under the Evidence, Act have no application to the determination of issues in the income-tax proceedings. The Tribunal also is not bound to observe the technical rules of evidence. Secondly, from a bare perusal of the provisions of section 91 read with section 92 of the Evidence Act, it is clear that the assessee can adduce evidence regarding the other terms of the contract entered into by the parties including the background. If we carefully see the following provisos to section 92 the position is further made clear : " Proviso (2).---The existence of any separate oral agreement as to any matter on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, in view of the fact that they still have the same freedom of contract that they had originally. Subsequent ' interpreting ' statements might not always change the meaning of a word or a phrase. A word or a phrase is not always crystal clear, when both parties subsequently say that by the word or phrase which, in the context, is ambiguous, they meant this, it only supplies a glossary as to the meaning of the word or phrase. After all, the inquiry is as to what the intention of the parties was from the language used. And, why is it that parties cannot clear the latent ambiguity in the language by a subsequent interpreting statement ? If the meaning of the word or phrase or sentence is clear, extrinsic evidence is not admissible. It is only when there is latent ambiguity that extrinsic evidence in the shape of interpreting statement in which both parties have concurred should be admissible." ([1975] 1 SCC 199). I have, therefore, no doubt in my mind that the assessee was entitled to adduce evidence in regard to the other terms and conditions and also various other related matters which ultimately culminated into the guarantee agreement. That is the reason why there was no objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of innumerable decisions by Courts in India and since both sides have made submissions based on those decisions, it, may be necessary to have a look at them. However, I do not think it is necessary to refer to all the decisions cited by both the sides since in my opinion they have been more or less considered by their Lordships of the Supreme Court in the case of Maharajadhiraja Sir Kameshwar Singh v. CIT [1961] 41 ITR 169. As taken from the headnote the facts are as follows : " The assessee, who executed a deed of trust settling certain properties including agricultural lands in trust for certain temples and thakoorbaries, received 15 per cent of the estimated net income from the trust properties as remuneration under a covenant in the deed of trust. He had no beneficial interest in the lands which were the subject-matter of the trust ; nor had he a right to receive and appropriate to himself the income of the properties or a part thereof :" Their Lordships on the basis of the relevant facts observed as follows : " The appellant has no beneficial interest in the lands which are the subject-matter of the trust : nor is he given under the trust a right to receive and appropr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in the case of R.M. Chidambaram Pillai. In Major Conville's case their Lordships stated as follows : " . . .Even a co-owner can employ another co-owner on the business of the joint ownership, and similarly a partner can be employed by another partner on the business of the firm. Whatever his position may be, the son is an employee of his father qua that portion of the work which he does exclusively for his father and for which he is paid an extra amount." Insofar as the observations regarding partnership are concerned, they must be deemed to have been overruled by the decision of the Supreme Court referred to above. Similarly the decision of the Patna High Court in the case of E.C. Danby also must be understood in the like manner. 12. Copious references have been made to the decision of the Madras High Court in K. Simrathmull's case. The facts therein are entirely different. The only question was whether the income was derived from land. Their Lordships held that merely because a person carrying on money-lending business has invested in some coffee estates, receipt of rents therefrom do not cease to be agricultural income. This is what their Lordships observed : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the assessee though basically the income in the abstract sense was derived from agriculture. The entire income initially came out of agriculture. It is more on the application of the principle noticed by the Supreme Court in Maharajadhiraja Sir Kameshwar Singh's case that the matter has to be decided. However, I would like to make a short reference to the two decisions relied on by the assessee. The first one is All India Tea Trading Co. Ltd.'s case. The general principles laid down therein are : " The general principles applicable it determining whether a particular income is agricultural income are : (i) Rent or revenue which is directly derived from any land which is used for agricultural purposes will be agricultural income for purposes of income-tax. (ii) Revenue which is derived must also be directly and not indirectly associated with the land which is used for agricultural purposes before it can be said to be agricultural income, and (iii) The effective source is the decisive factor." These are undisputed principles which have been earlier laid down by the Courts. The second one is Gauri Shankar Agrawal's case. The same principle is discernible on the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what was the real nature of the transaction from the point of view of two businessmen who were carrying out this transaction. In all taxation matters more emphasis must be placed upon the business aspect of the transaction rather than on the purely legal and technical aspect ; . . ." 14. If we look to the guarantee agreement in the background in which it has been brought about, it is abundantly clear that the assessee wanted to carry on agricultural operations as before but with some extra obligation on their part in that they agreed to pay the minimum amount to the land owners. Instead of remuneration as managing partner to manage the farms, they juxtaposed themselves as guarantors. However, at the same time they saw that all the members of the family are associated with all the partnership firms as before though in the capacity as guarantors. If we closely analyse the arrangement which has been made since after the execution of the guarantee agreement, there was practically not much of difference from what it existed earlier. Their position changed from that of managing partners to guarantors. Their entire object was to carry on the agricultural operations and cultivate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the first group of individuals while rest of the labour is undertaken by the second group. In what circumstances an AOP is to be inferred is fairly well settled. The leading case on the point is that of the Supreme Court in CIT v. Indira Balkrishna [1960] 39 ITR 546. Mr. Nagarajan referred to me a decision of the Madras High Court in T. Periaswamy Gounder v, Agrl. ITO [1982] 134 ITR 155 but that case is clearly inapplicable. There was only common management of the properties of different individuals and their Lordships ruled out the possibility of treating the group as an association of individuals. 16. Mr. Nagarajan's argument is that the guarantee agreement should be understood as a mere agreement for services to be rendered for which the assessees received certain remuneration, may be in the shape of a share in produce but when he was confronted with the factual position that the guarantors continued in possession of lands as before, invested moneys, used their agricultural equipments and carried on agricultural operations, Mr. Nagarajan termed the guarantee agreement as guarantee-cum-financial-cum- service agreement. I do not think there is much in the nomenclature to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be non-agriculture on the ground that it is for services rendered. 17. Mr. Nagarajan also laid great stress on the basis that in order that the income should be agricultural income in one's hand, the person must have some interest in the land. This proposition is too broadly stated to be accepted. It is not as if a person should have some interest in land in all cases. Reference in this connection has been made by Mr. Nagarajan to the case in Maddi Venkatasubbayya's case. However, the observations in that case to the effect that rent, revenue or income derived from land by agriculture has reference to the rent, revenue or income derived by a person having some interest in land and that by virtue of the fact that he is the owner of the land, have to be understood in the context of the facts of that case. Justice Viswanatha Sastri observed : ". . . A merchant who purchases the standing crop derives profit from his contract of purchase at an advantageous price and resale of the produce at a higher price. The land is not the direct or immediate or effective source of his income. Agricultural income cannot be said to accrue to every person into whose hands the produce of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered. According to him the income is not derived from agriculture and the source is different. The source according to him is the guarantee agreement. In my opinion, this argument is devoid of any substance. The source of income is not guarantee agreement. The source is really agriculture (sic) derived from land. In order that income may be agriculture [income] the effective source is relevant. The effective source in this case is land. The income arises out of the land by agriculture. The terms under which the income is sought to be distributed and divided is reduced into writing and that document in writing cannot be the source for the income. Mr. Nagarajan invited my attention to the decision of the Gujarat High Court in Ahmedabad Mfg. and Calico Printing Co. Ltd. v. CIT [1982] 137 ITR 616, only to explain what is meant by ' derive '. Their Lordships stated that derivation should be direct and not indirect. It is true that these observations have been made in altogether a different context but Mr. Nagarajan wants to take support from those observations in the context of the word ' derive ' occurring in section 2(1). In my opinion, those observations are to be limited to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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