Municipal value not binding for tax assessment: Bombay HC upholds higher fair rent determination

The Bombay High Court ruled that municipal ratable value is not conclusive for determining the annual letting value (ALV) under Section 23(1)(a) of the Income Tax Act. The Assessing Officer can adopt a fair market-based rent if justified. The Court upheld the AO’s higher fair rent determination, clarifying that property tax assessments serve a different purpose. The ruling provides clarity on property income computation and reinforces the principle that tax assessments must reflect realistic market conditions, not administrative valuations.