Varun Ltd. paid fees for technical services of ₹6 lakh but omitted to deduct tax at source and such omission continued till the 'due date' for filing the return of income specified in section 139(1). The amount of expend

CS Executive · Tax Laws and Practice · PYQS · December 2016
Varun Ltd. paid fees for technical services of ₹6 lakh but omitted to deduct tax at source and such omission continued till the 'due date' for filing the return of income specified in section 139(1). The amount of expenditure liable for disallowance would be —
(A) ₹1,80,000
(B) ₹6,00,000
(C) ₹1,20,000
(D) Nil.

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A), (B). Official source note: Two options (A & B) are correct. The question is silent about the residential status of paye e, if assumed payee as 'resident', the answer is ₹ 1,80,000 i.e. option A. If assumed payee as 'non- resident', the answer is ₹ 6,00,000 i.e. option B. Note : The inconsistency or ambiguity in the Question(s), if any, is/are taken care of while evaluating the answer sheets.

Topics: Income Tax

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