#real estate development

The Bombay High Court has ruled that a Memorandum of Understanding lacking a No Objection Certificate from the Collector and formal registration cannot create any vested interest in government land for redevelopment, even if partial payment has been made. This clarifies that mere intent to enter a future development agreement does not equate to enforceable contractual rights under the Arbitration Act, impacting developers and housing societies relying on informal arrangements.

ITAT Mumbai rules that interest paid on loans for land acquisition by real estate developers qualifies as a business expense under Section 36(1)(iii) of the IT Act, as land held for development constitutes inventory, not a capital asset. This decision clarifies the tax treatment of financing costs for developers and may impact similar pending assessments.