The tenant deposited the amount as per the sub-lease agreement with the Income-tax Department in spite of the assessee terminating the agreement. In the year 1984, the assessee filed a suit for eviction against the tenant and claimed various reliefs, including compensation for wrongful use and occupation of the flats. On May 3, 1999, on an application made by the tenant an order came to be passed by the Small Causes Court in the declaratory suit filed by the tenant which stated that the tenant was to be allowed to deposit the lease rent in court and to go on depositing it till the rights of the parties were decided. The order of deposit of the rent was without prejudice to the rights and contentions of the parties. The assessee was at liberty to withdraw the amount deposited in the court. However, the assessee did not withdraw any amount. Both suits, namely, the suit filed by the tenant and the suit filed by the assessee were pending. The assessee did not offer the lease rent as its income in the return of income filed for the assessment years 1982-83 to 1985-86 in view of the termination of the sub-lease by the assessee. The proceedings with respect to the assessment year became final and no addition was made on account of the subject sub-lease rent by the Revenue. The assessee did not offer the rent for tax in its return of income for the assessment year 1986-87. Thereafter, the case of the assessee for the assessment year 1986-87 was reopened under section 148 of the Act for assessing the sub-lease rent. An assessment order under section 143 read with section 148 of the Act for the assessment year 1986-87 was passed and the rent on account of the sub-lease agreement of the assessee with tenant amounting to Rs. 3,42,720 was added as income of the assessee. The order was confirmed by the Tribunal. On appeal to the High Court,  held, that it was not disputed that the cross-suits filed by the assessee and the tenant against each other were pending before the Small Causes Court. It was also not disputed that the assessee had not accepted the rent from the tenant post termination of the sub-lease agrement in the year 1981. The Small Causes Court had permitted the tenant to deposit the lease rent in the court till the rights of the parties were decided and the order of deposit of the rent was without prejudice to the rights and contentions of the parties. In the light of these facts, whether the sub-lease agreement between the tenant and the assessee subsisted post 1981 termination by the assessee, was itself a subject matter of dispute between the assessee and the tenant which was pending adjudication. In the light of these facts, it could not be said that the assessee was entitled to receive a sum of Rs. 3,42,720 under the sub-lease agreement with the tenant or a right was vested in the assessee to that sum. The determination of the amount payable by the tenant to the assessee as prayed for by the assessee in its suit was to be determined by the Small Causes Court and when the court passed a final decree one could say that the right to receive the sum decreed by the Small Causes Court had accrued to the assessee. Till then, the right to receive any sum by the assessee was in jeopardy and sub judice before the Small Causes Court. Therefore the Revenue was not justified in bringing to tax the sum of Rs. 3,42,720 as accrued income for the assessment year 1986-87 and for the other years, that is to say, the assessment years 1988-89 to 1991-92 and 1993-94. (AY.1986-87 to 1991-92, 1993-94)