BACHA F. GUZDAR vs COMMISSIONER OF INCOME-TAX, BOMBAY.

The Supreme Court held that under Section 2(1) of the Indian Income-tax Act, 1922, agricultural income must be directly derived from land cultivation, and not merely connected to agricultural operations. The Court ruled that dividends from a tea company do not qualify as agricultural income under Section 4(3)(viii) since they arise from the shareholder's contractual rights rather than direct land association. The judgment emphasized the distinction between shareholders and partners, affirming that the nature of a company as a juristic entity differs fundamentally from that of a partnership.