Question

Diversion of income by overriding title section

Answer 1

There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation, cannot be said to be a part of the income of the assesse. ... This typically may be a case of application of incomerather than a case of diversion byoverriding title.

Answer 2

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One such concept is application of income. Closely related to it is another fundamental concept called diversion of income by overriding title. In case of diversion of income by overriding title, the income before coming to the hands of the assessee is diverted from the source itself and hence is not liable for tax.