AOP formed for Diwali bash is assessed:
AExempt from tax
BIn the following AY
CIn the same year under Section 174 (per relevant Section)
DAggregated with members (per relevant Section)
Answer & Solution
Correct answer: C. In the same year under Section 174 (per relevant Section)
1. Section 174 covers AOP/BOI formed for a particular event/purpose.
2. If AO finds AOP likely to be dissolved in the AY, he may assess from beginning of PY to date of dissolution.
3. Income is taxed in the same year, not following AY.
_Source: ICAI BoS CA Final Paper 7, Ch 1 "Basic Concepts"_
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