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August 2024

Accrual of income — Meaning of accrual — Time of accrual — Assessee terminating lease following dispute — Assessee not accepting lease rent — Matter before Small Causes Court — Small Causes Court allowing lessor to deposit lease rent in Court specifying that deposit was allowed without prejudice to rights of contestants — Matter still pending in Small Causes Court — Lease rent did not accrue to the Assessee.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 7 mins

29 T. V. Patel Pvt. Ltd. vs. DCIT

[2024] 464 ITR 409 (Bom.):

A.Ys. 1986–87 to 1991–92, 1993–94

Date of order: 4th December 2023

Ss. 4 and 5 of the ITA 1961

Accrual of income — Meaning of accrual — Time of accrual — Assessee terminating lease following dispute — Assessee not accepting lease rent — Matter before Small Causes Court — Small Causes Court allowing lessor to deposit lease rent in Court specifying that deposit was allowed without prejudice to rights of contestants — Matter still pending in Small Causes Court — Lease rent did not accrue to the Assessee.

The assessee entered into a sub-lease agreement with IDBI on an annual lease rent of ₹3,42,720. The said income was offered for tax under the head “Income from Other Sources”. During the previous year 1980–81, dispute arose between the assessee and IDBI for breaches committed by IDB

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