Reserve fund contributions are not deductible when they remain society assets and no substantial question of law arises.

Contribution transferred to the reserve fund under cooperative law was treated as part of the society's own assets and retained for its own purposes, so it was neither diverted by an overriding title nor excluded on a real income basis. On that reasoning, the amount was not allowable as a deduction in computing taxable business income. The Court also held that no substantial question of law arose from the Tribunal's deletion of the disallowance.

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Issues: Whether the contribution transferred to the reserve fund was allowable as a deduction in computing taxable income, and whether any substantial question of law arose from the Tribunal's deletion of the disallowance.

Analysis: The Court followed its earlier decision holding that the reserve fund created under the cooperative law remains part of the society's assets and is retained for the society's own purposes. It applied the principle that such an amount is neither diverted by an overriding title nor removed from the computation of business income on the theory of real income, and it is not deductible as business expenditure.

Conclusion: The contribution to the reserve fund was not allowable as a deduction, and no substantial question of law arose for consideration.

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