Section 25
Collector may disregard certain transaction and dispositions
(1)
Where the Collector is satisfied that the purpose or effect of any arrangement is directly or indirectly —
(a)
to alter the incidence of any tax which is payable by, or which would otherwise have been payable by, any person;
(b)
to relieve any person from any liability to pay tax or to make a return under this Act; or
(c)
to reduce or avoid any liability imposed or which would otherwise have been imposed on any person by this Act,
Income Tax 62
he may, without prejudice to such validity as it may have in any other respect or for any other purpose, disregard or vary the arrangement and make such adjustment as he considers appropriate, including the computation or re-computation of gains or profits, and the imposition of liability to tax, so as to nullify any tax advantage obtained or obtainable from or under that arrangement.
(2)
In subsection (1), “arrangement” includes any scheme, trust, grant, convenant, agreement, disposition transaction and all steps by which it is carried into effect.
(3)
Nothing contained in this section shall prevent the decision of the Collector in the exercise of any discretion given to him by this section from being questioned in an appeal against an assessment in accordance with Part 12.