#annual letting value

ITAT Mumbai rules that Section 14A disallowance cannot apply without exempt income, and actual rent under genuine agreements prevails over notional Annual Letting Value (ALV). The decision reinforces that tax disallowances must be grounded in real income, not hypothetical valuations, impacting tax assessments for commercial property owners.

The ITAT Mumbai has ruled that Assessing Officers cannot impose notional rent on rent-controlled properties beyond the municipal ratable value prescribed under the Maharashtra Rent Control Act, 1999. This sets a critical precedent for taxpayers and tax authorities alike, ensuring that statutory rent ceilings override arbitrary income estimations under the Income Tax Act.