Deductibility of maintenance payments: amounts paid after receipt are not diverted income and are not deductible.

The text addresses whether maintenance payments made by an assessee are deductible, clarifying that deductions require income to be diverted by an enforceable charge so it never becomes the assessee's income. Applying the diverted income doctrine and the charging provisions, the analysis distinguishes cases where an express charge diverts income before receipt from those where the assessee receives income and thereafter applies it to personal obligations. The conclusion is that the payments were applications of received income, not amounts diverted by an overriding charge, and therefore the deduction claim is disallowed.

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Issues: Whether sums of Rs. 1,350 and Rs. 18,000, paid by the assessee pursuant to a maintenance decree, are deductible from his total income for the relevant assessment years.

Analysis: The Court analysed precedents distinguishing payments which are diverted by an overriding charge before income reaches the assessee from payments which the assessee receives and thereafter applies to discharge a personal obligation. The governing legal framework includes the charging provisions of the Income-tax Act and the established doctrine that a deduction is permissible only where income is diverted by an enforceable charge so that it never becomes the assessee's income. The Court examined authorities including the Privy Council decision in Bejoy Singh Dudhuria (where an express charge diverted income before it reached the taxpayer) and contrasted those with cases where the payer merely applied received income to discharge obligations. Applying this principle to the facts, the Court found no overriding charge on property or its income in the present case; the wife and children received portions of income only after the assessee had received it, so the payments were applications of his income to meet personal obligations and not amounts that never became his income.

Conclusion: The claim for deduction of Rs. 1,350 and Rs. 18,000 is disallowed; the question referred to the High Court is answered in the negative and the appeal by the Revenue is allowed (decision against the assessee).

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