The Disco Biscuit Company is a resident company that owns and operates a car dealership. During...

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Accounting

The Disco Biscuit Company is a resident company that owns andoperates a car dealership. During the year, the company hasprovided the use of a car to a number of people. The details areshown below. For each of the below transactions, explain byreferencing to legislation and case laws applicable whether theprovision of the vehicle represents a fringe benefit. a. Mary, thewife of Damon who is a salesperson of the company, received a carto use. b. Gabby operates the business of providing an advertisingconsulting services to clients. The Disco Biscuit Company givesGabby the use of a Mercedes for her services provided to it insteadof paying a fee for her service upon their mutual agreement. c.Nigel, a salesperson, receives the use of a Lexus, a luxury car. d.Tristan, the managing director, is given the use of a Jaguar (car)instead of receiving a director’s fee

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Fringe benefit can be defined as form of payment usually made from employers to employees and is considered as compensation for services beyond the employees normal rate of pay They can be made in the any form for eg property services cash or cash equivalents Following provision of Income Tax Act1961 will apply As per section 172V of Income tax act 1961 If the automobilecar provided by employer to employee or his family is used for own purpose and if the expenditure is borne by employer utterly then whole amount will be taxable as See Answer

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