“Section 8(2)(iii)”

Exemption provisions under Chapter III, such as Section 10B(8), must be interpreted strictly, and any claim for such exemptions must be made in the return of income. The principles governing Chapter III (incomes not forming part of total income) differ from those for Chapter VIA (deductions in computing total income).

The legal form or ostensible autonomy of an entity does not prevent it from being classified as 'State' or 'authority' under Article 12 if it functions as an instrumentality of the Government, thereby attracting constitutional accountability under Part III.

Expenses are to be apportioned among various units based on turnover, a method approved by the Supreme Court. The method of allocating exempt income by way of dividends to total gross revenue is also upheld.

If agricultural operations are being carried out on land at the time of sale and revenue records indicate it is agricultural land, a presumption arises that it is agricultural in character, which the revenue must rebut. Permission to convert land to non-agricultural use does not render it non-agricultural if not obtained before the sale.

The potential non-agricultural value of land, or the large price a purchaser is willing to pay due to market conditions, does not change its essential character as agricultural land at the time of sale, provided it was used for agricultural purposes.