Overriding title and maintenance liability: income subject to a pre-existing legal charge was diverted before vesting in the assessee.

Maintenance paid to the assessee's adoptive mothers was held to be diverted by overriding title, not a mere application of income, because the liability arose from a statutory order under Section 9 of the Madhya Bharat Abolition of Jagirs Act, 1951 and was recognised by a civil court decree. The right to maintenance was treated as a pre-existing charge attached to the late jagirdar's property, so the income never vested absolutely in the assessee before payment and was subject to a legal obligation at source.

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Issues: Whether maintenance paid to the assessee's adoptive mothers was an application of income or a diversion of income by overriding title under a legal obligation.

Analysis: The maintenance liability arose from the statutory order under Section 9 of the Madhya Bharat Abolition of Jagirs Act, 1951, and was recognised by the civil court decree. The right of the adoptive mothers to receive maintenance was treated as a pre-existing right attached to the property of the late jagirdar, so the assessee's obligation was not merely personal. Income subject to such an overriding obligation never vested absolutely in the assessee before payment.

Conclusion: The maintenance amount was diverted by overriding title under a legal obligation and was not merely an application of income.

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