What is the overriding problem with the three traditional methods when trying to set a transfer price?

List out from the given statements the important ethical principles that a business should follow:
1. To take the necessary action for the development of the concerned industry or business
2. Pay taxes and discharge other obligations promptly
3. To ensure the best utilisation of the human resources
4. Refrain from secret kickbacks or pay-offs to customers, suppliers, administrators, etc.
5. Ensure payment of fair wages and fair treatment of employees

A. 3, 4 and 5

B. 2, 4 and 5

C. 1, 2 and 3

D. 1, 3 and 5

Entertainment allowance for non-government employees are:

A. Fully exempted

B. Fully taxable

C. Partially taxable

D. Fully exempted in specified

E. Partially exempted in selected areas

In tax laws, donation to approved and notified association for scientific research is allowed as:

A. 125% of the donation

B. 100% of the donation

C. 175% of the donation

D. 150% of the donation

Statement (I): If the tax liability has been reduced within the legal framework, it is tax planning.
Statement (II): If tax liability has been reduced to get benefit of deduction available under the income tax, it is called tax evasion.
In the context of the above two statements, which one of the following is correct?

A. Both the Statements (I) and (II) are correct

B. Statement (I) is correct, but (II) is incorrect

C. Both Statements (I) and (II) are incorrect

D. Statement (II) is correct, but (I) is incorrect