JUDGMENT

1. These four references involve a common question of law, namely, whether the dividends distributed by a company to its shareholders out of agricultural income can themselves be treated as agricultural income within the meaning of the Income-tax Act. It is admitted that the only income which the companies have is agricultural income within the meaning of the companies have is agricultural income and that, as such, it is exempt from tax in the hands of the companies themselves.

2. Upon a reading of the relevant provisions of the Act, we should have had no difficulty in returning an affirmative answer. But two recent decisions of Indian High Courts and one of the Supreme Court of India, to the contrary, have given us considerable food for thought; and having examined them again and again. We have ventured to differ from them. We had to be very clear in our mind before we could differ from decisions of such weight and authority, and at the very outset I should state that I am clear about two matters. Firstly, in emphasizing the distinction between the company and its shareholders, the Indian Courts have been carried away more by the outward form than by the substance of the di