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2018 (6) TMI 1376 - AT - Income TaxEligibility for claiming exemption u/s.11 - excessive payments made to M/s. Amali Builders Private Limited - whether the payments effected to M/s. Amali Builders Private Limited were in the normal course of its activities at market rates and there was no violation as contained in Section 13(1)(c) - Held that:- Apart from saying that two of the trustees were also directors of the M/s. Amali Builders Private Limited, AO has no where shown as to how the said concern satisfied requirement of Explanation 3 to Section 13(1) (9). Just because two trustees were directors would not mean that they were entitled to 20% of the profit or were having 20% of its voting power. That apart, argument of the assessee all along was that payments effected to M/s. Amali Builders Private Limited were not excessive or unreasonable. Total construction cost incurred by the assessee was undisputedly ₹ 5,50,51,715/- and the payments to M/s. Amali Builders Private Limited came to ₹ 40,78,668/-. Excluding service tax ₹ 4,48,668/- the payment for services came to ₹ 36,30,000/-. This was only about 6.6% of the total construction cost. There is nothing on record to show how the Revenue came to a conclusion that such payments were excessive viz-a-viz services rendered by them. - Decided against revenue
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