EGBERT SINGH, A.M.: In these appeals by Revenue common grounds have been raised as facts of case in all years are identical. appeal by Revenue is that CIT (A) erred in holding that claim of assessee that it was not receiving nor money was accrued to assessee in respect of lease rent, was correct. This is first common ground of appeal. facts of case are discussed below. For asst. yr. 1973-74, assessment was made earlier by ITO under s. 144 which was reopened under s. 146 and ultimately order was passed under s. 143(3) of IT Act, 1961. In order of assessment, ITO indicated that assessee is company and accounts were maintained on mercantile basis. assessee in compliance with notice under s. 143(2) made written submission to explain return. It was stated that assessee company gave away its plant and machinery on lease to M/s Amrit Paper Mills (P) Ltd. for ten years on rent for Rs. 10,000 per month from 12th Jan., 1971. It was also noted that lessee started neglecting payment of rent on certain grounds. case was instituted being title suit no. 423 of 1973 before Court of Sub-ordinate Judge at Howrah praying for temporary injunction which was allowed as prayed by lessee who was allowed to stay till questions formulated for reference to arbitration were determined. It was also noted that there was no order for payment of arrears or current rent to lessor. Thereafter assessee company filed civil revision application (CR No. 3520 of 1974) before Hon ble High Court praying inter alia, for rent, which was yet to be decided. Accordingly, assessee s representative submitted before ITO that in view of decisions of several Courts, lease income had not accrued and assessee had not shown income and, therefore, question of inclusion of rental income did not arise. According to assessee, lease rent income would be determined only/and when matter is decided by Court. ITO pointed out that assessee was following mercantile system of accounting and once lease agreement was signed by both parties, it should be presumed that income from lease rent definitely accrued irrespective of fact that assessee got it or not. ITO mentioned that in respect of several claims and counter-claims, assessee and lessee company had gone before Court not to determine status as lessor or lessee, but to come to agreement for receipt of arrear rent as well as getting back plant and machinery by assessee. He noted that relation between lessor and lessee had not become fluid out of above situation. He pointed out that lower Court gave injunction not to collect arrear lease rent, but in no way finally decided regarding final payment. He mentioned that though decision of Hon ble High Court is still awaited, Lease Deed remains operative and rent would continue to accrue to assessee. He, therefore, included accrued lease rent of Rs. 10,000 per month which was treated as income of assessee from other sources. On similar reasons and facts, assessments, for asst. yr. 1976-77, 1977-78 and 1980-81 were completed under s. 143(3) by ITO. assessee took up matter before CIT (A) and objected to findings of ITO. It was pointed out that for asst. yr. 1975-76, predecessor CIT(A) has passed order on 8th Feb., 1979 in case of assessee in which assessment order for that year was set aside. Copy of order of Hon ble High Court dt. 24th July, 1981 was also placed before CIT(A). CIT(A) considered different aspects of matter. He was of view that order of Hon ble High Court is of crucial importance in which it was observed that liability of lessee to pay arrear rent was now part of dispute raised and that in view of arbitration agreement, it was not for Court to decide said dispute but to leave it for arbitration to do so as and when application under s. 20 of Arbitration Act was disposed of and reference was made to arbitration. Pending this, Hon ble High Court ordered that lessee would deposit to Court of Sub-ordinate Judge every month monthly rent in terms of agreement subject to results of proceedings under s. 20 of Arbitration Act. CIT (A) has also noted that Court has clearly observed that amount deposited would remain in Court and neither of party would be entitled to withdraw amount except with order of Court until disposal of proceedings under s. 20 of Arbitration Act. CIT (A), therefore, concluded that from above judgment, claim of assessee that it was not receiving nor money was accruing to assessee in respect of lease rent, was correct. CIT(A), therefore, agreed with his predecessor that position of lessor and lessee was extremely fluid and that receipt of lease rent is dependent on finding of Court. He, therefore, directed ITO to consider issue regarding taxability of lease rent after decision of Court is finally known. Hence, these appeals by Revenue remained under consideration. It is submitted by ld. Departmental Representative that CIT(A) erred in coming to above conclusion in spite of fact that lease rent had already accrued to assessee every month during years under consideration, on basis of lease agreement executed by both parties. It is stressed that assessee was maintaining accounts on mercantile basis. It is also submitted that in fact, relationship between assessee and above company as lessor and lessee was not in state of fluid as observed by CIT(A) as, in fact, dispute in pending suit is regarding recovery of rent and settlement of counter-claims by lessee against assessee. According to ld. Departmental Representative, assessee has got right to receive rental income and, therefore, income had already accrued under terms of agreement and as such, ITO was justified in including such lease income in computation of years under appeal. second ground of appeal by Revenue is also required to be taken up simultaneously, which is common to all years. In second ground o f appeal, it is contended that CIT(A) erred in giving above direction regarding issue of taxability of lease rental only after decision of Court is finally known in view of clear provisions of s. 153(2A) of IT Act. It is submitted by ld. Departmental Representative that in view of clear requirements of this section, ITO would not be able to wait till decision of Court is known, as such fresh assessments would have to be made not later than 31st March, 1988. IT is, therefore, urged that on facts of case, order of CIT(A) cannot be sustained and may be reversed and those of ITO may be restored. ld. representative of assessee supports order of CIT(A). It is submitted that present CIT(A) has given direction as done by predecessor CIT(A) for asst. yr. 1975-76 in cased of assessee as mentioned above. assessee has also field different papers in support of submissions in statement of facts for asst. yr. 1973-74. Amongst other things at item 1, it is stated that order of CIT(A) for earlier year was accepted by Department inasmuch as it was not taken up Department inasmuch as it was not taken up before high authorities by Department and, therefore, ITO, while passing assessment order in question, failed to take into consideration order of CIT(A) passed earlier. It is clarified further that lessee company denied to pay lease rent to assessee and in fact, said lessee filed counter-claims against assessee will be about Rs. 38 lakhs. assessee s ld. counsel, therefore, submits that question of taxability or otherwise could be considered after passing of decree. In this connection, reference is made to decisions as reported in Salig Ram Kanhaya Lal vs. CIT (1956) 29 ITR 467 (SC): 1982 133 ITR 915 (P&H) and Chooharmal Wadhuram (Decd.) vs. CIT (1968) 69 ITR 88 (Guj). In circumstances, it is urged that lease rent for years under consideration has not accrued although assessee maintained mercantile method of accounting. It is submitted, therefore, that order of CIT(A) may be sustained. We have heard both sides and have gone through orders of authorities below for our consideration. We have also gone through different papers placed by assessee before us including lease deed and supplementary deeds in respect of lease. From lease deed, it is seen that originally, it was stipulated that monthly lease rent was payable at Rs. 12,500 which was reduced to Rs. 10,000 per month from Feb., 1972. mode of payment was also specified that same would be payable by 10th day of month for which same shall be due. In other words, lease rent because due to assessee every month during subsistence of lease. ITO as indicated earlier, has noted that method of accounting by assessee was mercantile. finding by ITO remains uncontroverted. In circumstances, it cannot be said that lease rents have not become due or accrued to assessee from month to month during years under consideration. But contention of assessee, however, before authorities below was that there was dispute and lessee filed suit against assessee to show cause why arbitration agreement should not be filed as contained in original lease deed. case of assessee is also that due to disputes and difference which had arisen between assessee and lessee company, lessee started neglecting payment of rent and also breached certain conditions of agreement and that on lessor s pointing out such breaches, lessee filed suit in Court of Subordinate Judge o f Howard seeking temporary injunction to prohibit lessor from re-entering factory premises. It is also stated that assessee filed revision petition before Hon ble High Court claiming, inter alia, payment of rent which was withheld by lessee. In such circumstances, it is urged on behalf of assessee that ITO went wrong in stating that lease rent was taxable during year under appeal on ground that method of accounting followed by assessee was mercantile. It is reiterated before us that due to legal position, relation between assessee was mercantile. It is reiterated before us that due to legal position, relation between assessee and lessee has become fluid and verdict of Hon ble High Court is being awaited. It is submitted, therefore that on these premises, order of CIT(A) who followed order of predecessor CIT(A) for earlier year, was quite proper and reasonable and same requires to be sustained. We have gone through orders of authorities below along with other papers placed before us for our consideration. As indicated earlier, in assessment order method of accounting followed by assessee was shown as on mercantile basis. lease agreement also stipulated payment of lease rent by 10th of every month by which rent was due. In other words. assessee as lessor has legal right which is enforceable or recognisable which, in fact, in present case is ascertainable claim which can be enforced according to law. Of course, enforceability by legal process is subject to certain qualifications, particularly in present case, lessees made counter-claim against assessee on strength of contentions that there were breaches of terms of contract for which lessee had to make payments on account of various items. But even then on facts of present case it cannot be said that assessee has not been vested with right to claim lease rent. In case of any assessee of following mercantile system of accounting even interest on loan when due, accrues and becomes assessable even if same has not been received. This in view of Hon ble Allahabad High Court in case of Balraj Virmani vs. CIT (1974) 97 ITR 69 (All), on facts of that case. It may be useful to refer to decision of Hon ble Supreme Court of India in case of CIT vs. Jaiprakash Omprakash Co. Ltd. (1964) 52 ITR 23 (SC) in which assessee who maintained accounts on mercantile basis, entered into forward contract for sale of certain quantity of goods at particular rates and within specified date. price of goods soon thereafter fell down and purchaser cancelled contract before due date but that assessee refused to accept cancellation. That assessee instituted suit for recovery and trial Court decreed amount and on date of assessment order appeal was pending before concerned High Court. ITO included amount involved in total income of assessee, which was excluded by Tribunal on ground that liability was still being in dispute, sum in question could not be said then to have accrued. Reference under s. 62(2) was rejected. On appeal by Department, to Hon ble Supreme Court directed that Tribunal should refer case as point of law was involved. In another case of Morvi Industries Ltd. vs. CIT (Central) 1974 CTR (SC) 149: 82 ITR 835 (SC) on facts of that case, it was held that mercantile system of accounting differs substantially from that cash system. Under mercantile system credit entries are made in respect amount due immediately they become legally due and before they are actually received and where accounts were kept on mercantile system, profits and gains are credited though they are actually not received and entries thus made really show nothing more than accrual or arising out of said profit at material time. It was also held that income accrued and it became due and postponement of payment does not effect accrual of income and that t h e facts that amount of income is not subsequently received by assessee would not also detract from or efface accrual of income, although non-receipt may in appropriate cases be valid ground for claiming deduction. On facts of present case before us, as indicated earlier, monthly lease rent became payable for every month as per terms of Lease Deed. lease rent has thus accrued to assessee. In our opinion, conclusion of CIT(A) that receivablity of lease rent is dependent upon finding of Court, is not correct, in view of ratio in case of M o r v i Industries Ltd. (supra). Of course, in present case, there is postponement of receipt of lease rent by assessee. But as held in above cited case, postponement of payment would not affect accrual of income. In this view of matter, following ratio in case of Morvi Industries Ltd. (supra), we are of opinion that order of CIT(A) on this point common to all these years cannot be supported. But we have also to keep in mind all contentions made before us that lessee has lodged counter- claim that it had incurred expenditure on behalf of assessee as lessor, in respect of certain items of repairs, damages etc. According to assessee s ld. counsel such counter-claims of assessee against assessee would be more than Rs. 38 lakhs. Of course, this matter is pending for adjudication. As indicated in case of Morvi Industries Ltd. (supra), non-receipt may in appropriate case be valid ground for claiming deduction at material time. In his view of mater, consolidated order of CIT(A) on point is reversed and those of ITO for year under consideration, are restored. In view of what we have decided above relating to first ground of appeal by Revenue, second ground of appeal would become academic. Nevartheless, we have to deal with same in view of provisions of s. 153(2A) of IT Act which was brought into effect from 1st April,. 1971. provisions of s. 153(2A) are absolute. bar has been put on assessing authorities to make case after expire of period mentioned therein. This is in regard assessment proceedings relating to asst. yr. 1971-72 and onwards. assessment years before us are asst. yr. 1973-74 and onwards. Prior to insertion of this sub-section there was no time-limit for passing order to give effect to directions or orders of appellate authorities or Courts as held by Hon ble Bombay High Court in case of CIT vs. National Taj Traders (1980) 14 CTR ((SC)) 348: (1980) 121 ITR 535 (SC). bar of limitation was removed where there was finding or direction in appeal. This is view of Hon ble Supreme Court in case of Daffadar Bhagat Singh & Sons vs. ITO (1969) 71 ITR 147 (SC). above decisions of course were rendered in context of cases relevant to assessment years prior to 1st April,., 1971. But with insertion of s. 153(2A), position has been altered, apparently CIT(A) overlooked statutory requirements of this section in giving direction to ITO in present case to decision of Court is finally known. apprehension of ld. Departmental Representative is that in view of provisions of s. 153(2A), ITO may not be in position to pass orders for inclusion of such amount of rent after 31st March, 1988, as according to ld. Departmental Representative, litigation which is pending may take more time to be finally decided by Court. In our opinion, this apprehension is legitimate, as Revenue will be put to loss, if fresh assessments as directed by CIT(A) has to be kept pending and which may not be able to be disposed of by 31st March, 1988. In this connection we may refer to decision of Hon ble Supreme Court in case of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC). At this juncture it is necessary also to refer to decision of Hon ble Andhra Pradesh High Court in case of ITO vs. Khalid Mehdi Khan (Minor) (1977) 110 ITR 79 (AP), in which amongst other things, provisions of s. 153(2A) and s. 244 were dealt with and considered. At page 83 (middle portion), it was observed that it is obvious that provisions contained in sub-s. (2A) shall have to be additional factor which Tribunal has to take into consideration while passing order of stay or other interlocutory order pending appeal before it. It was also observed in that decision that it is always open to Department to being to notice of Tribunal that particular difficulties, if any which would be effected in case collection is stayed and Tribunal will of course shall consider such plea keeping in view ratio of decision in case of Mohammed Kunhi (supra). Thus, in view of legal position as dealt with by different Courts mentioned above, it would not be appropriate for CIT(A) to direct ITO to consider issue of taxability of lease rent after decision of Court is finally known, which may go beyond 31st March, 1988. finally known, which may go beyond 31st March, 1988. contentions of assessee amongst other things are also that ITO should have followed decision of predecessor CIT(A) who gave similar direction for other assessment years not presently before us, on basis of which present CIT(A) has given similar directions. In our opinion, this contention cannot be accepted as in taxation s, principle of res judicata cannot be applied. In this connection we may refer to decision of Hon ble Calcutta High Court in case on Namdang Tea Co. Ltd. vs. CIT (1982) 138 ITR 327 (Cal), at page 333 (middle portion) in which it was held that it is now well settled that decision of ITO or Tribunal in regard to particular year does not operate as res judicata for subsequent year. Thus, order of CIT(A) impugned before us for all years is reversed and those of ITO is restored. In result, appeals by Revenue are allowed. *** INCOME TAX OFFICER v. SWASTIK BOARD & PAPER MILLS (P) LTD.