Mr. Nylon, a citizen of Country X, came to India on 14.07.2025. On 13.10.2025, he left India for China on a business trip. He came back on…

Mr. Nylon, a citizen of Country X, came to India on 14.07.2025. On 13.10.2025, he left India for China on a business trip. He came back on 28.02.2026 and stayed in India till 14.4.2026. He visits India every year for 85 days for providing technical services to Indian customers. During his visits to India, Mr. Nylon carried on his professional activities from the same premises where he stayed as a paying guest. The premises were used as his base for rendering technical services, meeting client, and performing professional work relating to M/s PQR LLP only. He paid rent of 85,000 per month or part thereof to Mr. Amit (a salaried employee) for use of premises, and accordingly, the said premises constituted his fixed place of profession in India. He earned the following income in India during the Previous Year 2025–26: S. No. Particulars of Income Amount (₹) (i) Fees for technical services from XYZ Ltd. (under an agreement approved by Government of India) 25,00,000 (ii) Fees for technical services from M/s PQR LLP (agreement not approved by the Government of India) 14,00,000 (iii) Expenditure incurred for providing services at (i) above 4,00,000 (iv) Expenditure incurred for providing services at (ii) above 4,00,000 (v) Rental Income a let-out property located in Country X 12,50,000 (vi) Interest on loan borrowed for let-out house property located in Country X (2,80,000) (vii) Dividend income from Indian companies 8,00,000 (viii) Income from mutual funds specified under section 10(23D) (units purchased in foreign currency) 75,000 (xi) Interest on debentures of Indian company subscribed in foreign currency 1,50,000 Mr. Nylon is paying tax as per section 115BAC(1A). His sister Mrs. Nile married to an Indian Citizen and reside in India. She is proprietor of M/s Dynasty Beauty Lounge. The assessment for the A.Y. 2024-25 of M/s Dynasty Beauty Lounge, was made under section 143(3) on 01.12.2025. The Assessing officer added - 16,00,000 on account of unexplained expenditure. However, she contended before the CIT(A) that this is professional fees paid to a consultant but could not substantiate with any invoice. The CIT(A) did not accept the contention of the assessee and pass the order against her on 15.03.2026. Note - DTAA between India and Country X need not be considered while answering the MCQs unless specified. From the information given above, choose the most appropriate answer of MCQs 1 to 6: