TMI Blog2007 (12) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstanding with M/s Arora Builders (alias M/s Sukhmani Construction) for the development of immovable property situated at Andheri, Mumbai, vide development agreement dt. 28th Nov., 2003. The said agreement was registered with the office of the sub-Registrar, Mumbai. As per development agreement there are two phases of construction'one for rehabilitation and second for sale. The entire expenses for Phase-I, i.e. rehabilitation, were borne by the company on behalf of M/s Sukhmani Construction and for Phase-II, i.e. sale, the entire expenses were borne by the assessee company. As per the development agreement dt. 28th Nov., 2003, it was agreed upon that the developer would deposit with the owner a sum of ₹ 1,28,80,000, which is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Phase-II, sale building of the agreement, the assessee company had agreed and confirmed having deposited with the owner a further sum of ₹ 1,28,80,000 refundable by the owner in the manner stated for a period of fifteen months as security deposit for the development of the project and the owners shall have to pay interest at the rate of 12 per cent per annum from the date of payment of the same amount by the developer to the owner until completion or the construction of the said building. However, on subsequent development, the Slum Rehabilitation Authority and the Urban Land Development Department of Maharashtra refused to grant FSI vide letter dt. 29th Oct., 2003, as the project was legally not practicable and due to legal restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 99.90 lakhs as on 31st March., 2003, but no interest was paid to the assessee because the project was legally not feasible and due to legal restriction the whole amount invested might not have been realized in the said project. Accordingly, the owner did not make any payment to the assessee. Under the facts and circumstances, the assessee cannot be subjected to be taxed on notional income. There is nothing on record, to suggest that any such interest income was materialized. The assessee has pointed out that because of non-availability of FSI on the said plot of land for which the assessee had entered into development agreement with M/s Arora Builders (Sukhmani Construction), the assessee company could not develop the said property in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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