Diversion by overriding title rejected where statutory receipts remained assessee's own income and earmarked use was only application of income.

Receipts collected under the assessee's statutory powers were held to remain part of its own funds, because the office memorandum did not vest those amounts in the State Government or create a prior title in another entity. The direction merely required the sums to be credited to a designated account and spent for specified development purposes, so the arrangement amounted to application of income rather than diversion by overriding title. The claim that the infrastructure fund contributions were outside taxable income therefore failed. A separate unsigned document was also rejected, since it was unauthenticated and could not be admitted without compliance with the procedure for additional evidence.

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Issues: Whether contributions credited to the infrastructure fund were diverted at source by overriding title so as to fall outside the assessee's taxable income, and whether an unsigned additional document could be admitted without compliance with the prescribed procedure.

Analysis: The infrastructure receipts were held to arise from the assessee's own statutory powers to collect fees and charges under the governing development statute. The office memorandum did not transfer ownership of the receipts to the State Government or create a pre-existing title in another entity; it only regulated the manner in which the assessee was to apply and spend the amounts in a designated account for specified development purposes. The fund remained part of the assessee's own accounts, and expenditure from it was treated as application of income rather than diversion at source. The separate unsigned paper tendered as an opinion was also rejected because it was not authenticated and was sought to be introduced without following the procedure for additional evidence.

Conclusion: The claim of diversion by overriding title failed, and the infrastructure fund contributions were taxable in the hands of the assessee. The objection to the unsigned additional document was also rejected.

Ratio Decidendi: Where receipts collected under a statutory framework remain part of the assessee's own funds and the alleged government direction only governs their earmarked use, the case is one of application of income and not diversion of income by overriding title.

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