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2018 (5) TMI 1269 - GUJARAT HIGH COURTAllowability to exemption u/s. 11 & 12 - rent paid by the assessee to the trustees or to the HUF where the karta was the trustee of the respondent-trust - as per AO payment of such rent would fall foul of section 13(1)(c) income of the trust not qualify for exemption - Held that:- A total amount of valuation of land and building came to ₹ 25.66 crores. It was pointed out that the current fair market value of the property would come to ₹ 36.28 crores and the rent had been valued as per the prevailing rate fixed for the purpose of stamp duty. The assessee also pointed out that if 10% fair return on the investment was considered, the rent would come to ₹ 3.60 crores per annum as against which, rent of ₹ 1.98 crores was paid. The CIT (Appeals) was also influenced by the fact that the lease had a locking period of 30 years. It can be seen that the entire issue is in the realm of appreciation of materials on record. CIT (Appeals) and the Tribunal concurrently came to the conclusion that the rent was not excessive. The application under section 13(1)(c) of the Income Tax Act therefore would be ruled out. - Decided in favour of assessee.
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