Overriding title diverted molasses storage fund amounts at source, keeping them outside total income

Amounts set apart towards the molasses storage fund account and molasses storage tank fund account were held to be diverted at source by overriding title and, therefore, excluded from the assessee's total income. The Madras HC followed its earlier decision on identical facts and treated the relevant sums as not forming part of taxable income because they never accrued to the assessee as its own income. Accordingly, the amounts were not includible in total income.

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Issues: Whether the amount set apart towards the molasses storage fund account and molasses storage tank fund account was excludible from total income.

Analysis: The reference was reframed to decide whether the sums set apart by the assessee could be excluded from total income. The Court followed its earlier decision on identical facts and held that the relevant amounts were diverted at source by overriding title and, therefore, did not form part of the assessee's total income.

Conclusion: The amount set apart towards the molasses storage fund account and molasses storage tank fund account was not includible in total income.

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