TMI Blog2004 (10) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... mit. On the identical issue, the appeals are pending before us for previous years. The following question of law is required to be determined by this Court: Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of ₹ 10,69,542 credited to molasses storage fund out of the sale proceeds of molasses was to be included in the income of the appellant ? In the other two appeals, the question is identical except the amount. IT Appeal No. 588 of 2004 and IT Appeal Nos. 4 99 of 2002 At the request of the learned counsel appearing for the assessed as well as the Revenue, we are disposing of all the three appeals, namely, IT Appeal Nos. 4 of 2002 and 99 of 2002 and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T ; 4. CIT v. New Horizon Sugar Mills (P) Ltd. (2000) 244 ITR 738 (Mad); 5. CIT v. Sakthi Sugars Ltd. (2001) 251 ITR 166 (Mad); 6. CIT v. Madurantakam Co-op. Sugar Mills Ltd. (2003) 263 ITR 388 (Mad); 7. CIT v. Nizam Sugar Factory Ltd. . 4. It is also indicated by the learned counsel that the SLP preferred by the Revenue in the case of CIT v. Pandavapura Sahakara Sakkare Karkhane Ltd. and CIT v. Hiranyakeshi Sahakari Sakkare Kharkhane were dismissed. Civil appeal preferred against the decision rendered by the Madras High Court in CIT v. New Horizon Sugar Mills (P) Ltd. has been dismissed [(2004) 269 ITR 397 (SC)] 5. The learned counsel has placed before us a copy of the order of the Supreme Court in Civil Appeal No. 2499 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose. The fund has got to be utilised for the purpose of constructing a storage tank as per the specifications given by the Central Government. If the assessed failed to collect such amount as directed by the Molasses Control (Amendment) Order, the Central Government will construct a molasses storage tank and recoup the construction charges from the assessed. Therefore, there is diversion of title even at the source of the income collected as per the directions given under the Molasses Control (Amendment) Order. But according to the facts arising in the decision of the Supreme Court cited supra, the amount will be standing to the credit of the contingency reserve. The reserve is only for the utilisation by the assessed at a later stage when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also, after the amounts were collected as per the directions given by the Molasses Control (Amendment) Order, it goes to the molasses storage fund over which the assessed has no control and domain. Inasmuch as the assessed cannot utilise the same for its own business purpose, we have also here to hold that there is diversion by overriding title at the source itself. Even before the amount reached the hands of the assessed, the assessed was directed to transfer the same towards the molasses storage fund. Therefore, the collection made by the assessed belongs to the molasses storage fund. 7. In view of what is stated hereinabove, the answer is required to be given in favor of the assessee in all these appeals and against the Revenue. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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