State with reason, whether the following acts can be considered as an act of Tax Planning, Tax Management, Tax Avoidance or Tax Evasion : (c) Installation of Air Conditioner costing ₹75,000 at the residence of Director a
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2019
State with reason, whether the following acts can be considered as an act of Tax Planning, Tax Management, Tax Avoidance or Tax Evasion : (c) Installation of Air Conditioner costing ₹75,000 at the residence of Director as per terms of appointment; but treating it as Plant installed in Quality Control Section in the factory.
Answer & Explanation:
Installation of Air Conditioner costing ₹75,000 at the residence of Director as per the terms of appointment but treating it as plant installed in Quality Control Section in the factory is an act of Tax Evasion because of suppression of fact. This is with the objective to treat factory asset for claiming depreciation to be deducted from business income.
Topics: Income Tax Act, 1961
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