Judgment ( 1. ) THE questions referred, at the instance of the Revenue are : "1, Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the provision of Rs. 2,19,163 made to the Molasses Storage Fund is an allowable deduction ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the incentive, received by way of rebate on excise duty payable and increased percentage of levy-free quota of sugar, is not assessable as income of the assessee ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the initial depreciation allowed prior to the assessment year 1983-84 and earlier years should not be deducted from the written down value of the assets ? 4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the bank interest earned on the Molasses Storage Fund does not constitute the assessees income ?" ( 2. ) THE assessment year is 1986-87. ( 3. ) SO far as the first question is concerned, it is required to be and is answered in favour of the assessee having regard to the law laid down by this court in CIT v. Salem Co-operative Sugar Mills Ltd. [1998] 229 ITR 285, wherein it was held that as the Molasses Control Order provides that a portion of the sale price should be accounted for and funded separately for providing adequate storage facilities in accordance with the guidelines prescribed by the Government and the schedule to the order has specified varying rates per quintal for different grades of molasses for determining the quantum to be transferred from the sale proceeds to the storage fund, that amounts stood diverted by overriding title to that fund. That view has been reiterated in a subsequent decision of this court in the case of CIT v. Sakthi Sugars Limited [2001] 251 ITR 166. ( 4. That view has been reiterated in a subsequent decision of this court in the case of CIT v. Sakthi Sugars Limited [2001] 251 ITR 166. ( 4. ) IN so far as the second question is concerned, it has been held by this court in the case of CIT v. Ponni Sugars and Chemicals Ltd. [2003] 260 ITR 605 that the incentive given by the Government in the form of higher free sugar and allowing the owner to collect excise duty on the sale price of free sale sugar in excess of normal quota but to pay to the Government only the excise duty payable on the price of levy sugar, were incentives given exclusively for the purpose of repayment of loan borrowed for the purpose of meeting part of the capital cost from financial institutions and therefore were not revenue receipts. Following that decision, the second question is required to be and is answered in favour of the assessee. ( 5. ) REGARDING the third question, that question is also required to be answered in favour of the assessee in view of the decision of this court in the case of CIT v. Sri Ganapathy Mills Co. Ltd. [2002] 256 ITR 657. It was held the amendment to Section 32 (1) (iv) of the Income-tax Act which came into force with effect from April 1, 1984, had no impact on the assessments for earlier years, and consequently in those earlier years the assessee was not required to deduct the initial depreciation from the cost of assets for the purpose of computing the written down value of the asset. ( 6. ) AS regards the last question, though the amount on which interest was received did not belong to the assessee, the assessee admittedly had treated the interest received, as belonging to it, and utilised the interest for its own purposes, and had not treated the interest as forming part of the Molasses Storage Fund. The interest had been transferred to the savings bank account of the assessee and used by the assessee for its business purposes. Having regard to this conduct of the assessee, this question is required to be and is answered in favour of the Revenue and against the assessee.