IndigoLearn

Forums

MCQ

Please help me out with the answer and reasoning to the following question: XYZ Pvt Ltd, a company assessee pays Rs. 1.5 lakh per month to their employee Mr. J. In order to service their debt obligations timely, they held back Mr. J's remuneration for 3 years and paid it in the previous year. Mr. J claimed Rs 18 lakh as his income for each year and paid tax accordingly while XYZ Pvt Ltd claimed Mr J's salary as a deduction in each of the three years. The assessing officer is of the view that Mr. J's remeuneration for the previous year when he recieved the arrears in totality is Rs. 54 lakh and must pay surcharge. Further, he believes XYZ Pvt Ltd should not have been allowed the deduction in the years when salary was not paid but may claim so in the previous year. Which of the following is correct: (A) Mr. J's income for each of the 3 years is Rs. 18 lakhs and XYZ Pvt Ltd may claim deduction for Rs. 18 lakhs for each of the 3 years (B) Mr. J's income for each of the 3 years is Rs. 18 lakhs but XYZ Pvt Ltd may claim deduction for the entire remeuneration of Rs. 54 lakh in the previous year (C) Mr. J's income for the previous year is Rs. 54 lakh but XYZ Pvt Ltd may claim deduction for Rs. 18 lakhs for each of the 3 years (D) Mr. J's income for the previous year is Rs. 54 lakh and XYZ Pvt Ltd may claim deduction for the entire remeuneration of Rs. 54 lakh in the previous year


Suraj Narayanan

Suraj Narayanan

CA Inter

7K+

06-Sep-20 20:06

35

Answers (4)

Best Answer

A


Suraj Lakhotia

Suraj Lakhotia

Admin

08-Sep-20 05:25

Income each year is 18 lakhs and deduction will be allowed to th ecompany. Salary is taxable on receipt or accrual whichever is earlier.


Suraj Lakhotia

Suraj Lakhotia

Admin

07-Sep-20 11:37

Income each year is 18 lakhs and deduction will be allowed to th ecompany. Salary is taxable on receipt or accrual whichever is earlier.

May I please know which of the four options A-D is correct as well sir?


Suraj Narayanan

Suraj Narayanan

CA Inter

7K+

07-Sep-20 11:41

A

Thanks a lot sir


Suraj Narayanan

Suraj Narayanan

CA Inter

7K+

08-Sep-20 07:10

Happy Mother's Day
IL Pass percentages
Tally Free
Quote
Refer
EMI
Lazypay
Past_Exams