Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2019 Summer 3rd Sem 2830009 Corporate Taxation Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 2830009 Date:06/05/2019
Subject Name: Corporate Taxation
Time: 02:30 PM To 05:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) Objective Questions 06
1.
The liability of tax payer is determined with reference to his or her .
A. Residential status B. Aadhar card
C. Bank account details D. Education
2.
Income received in India by a non-resident company is .
A. Taxable B. Non-taxable
C. Partly taxable D None of the above
3.
OECD stands for
A. Organisation for Ecological Co-
operation and Development
B. Organisation for Economic Co-
operation and Degradation
C. Organisation for Economic
Commerce and Development
D. Organisation for Economic Co-
operation and Development
4.
In India, Authority for Advance Rulings is constituted by .
A. State Government B. Central Government
C. Union Territory D. General Public
5.
Relief from double taxation is available as .
A. Unilateral relief B. Bilateral relief
C. Both (a) and (b) D. None of the above
6.
?The double taxation avoidance agreements entered into by the Government of
India override the domestic law?. This statement is .
A. True B. False
C. Both (a) and (b) D. Neither true nor false
Q.1 (b) Short / Definition Questions 04
1. What is meant by arm?s length price?
2. What is Place of Effective Management?
3. What is advance ruling?
4. What is tax avoidance?
Q.1 (c) Distinguish between Tax Planning and Tax Evasion. 04
Q.2 (a) Discuss tax planning considerations in respect of employees?
remuneration.
07
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Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 2830009 Date:06/05/2019
Subject Name: Corporate Taxation
Time: 02:30 PM To 05:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) Objective Questions 06
1.
The liability of tax payer is determined with reference to his or her .
A. Residential status B. Aadhar card
C. Bank account details D. Education
2.
Income received in India by a non-resident company is .
A. Taxable B. Non-taxable
C. Partly taxable D None of the above
3.
OECD stands for
A. Organisation for Ecological Co-
operation and Development
B. Organisation for Economic Co-
operation and Degradation
C. Organisation for Economic
Commerce and Development
D. Organisation for Economic Co-
operation and Development
4.
In India, Authority for Advance Rulings is constituted by .
A. State Government B. Central Government
C. Union Territory D. General Public
5.
Relief from double taxation is available as .
A. Unilateral relief B. Bilateral relief
C. Both (a) and (b) D. None of the above
6.
?The double taxation avoidance agreements entered into by the Government of
India override the domestic law?. This statement is .
A. True B. False
C. Both (a) and (b) D. Neither true nor false
Q.1 (b) Short / Definition Questions 04
1. What is meant by arm?s length price?
2. What is Place of Effective Management?
3. What is advance ruling?
4. What is tax avoidance?
Q.1 (c) Distinguish between Tax Planning and Tax Evasion. 04
Q.2 (a) Discuss tax planning considerations in respect of employees?
remuneration.
07
2
(b) Calculate taxable income in the hands of Mr. John, a non-resident, from
his following sources of income:
i. Income from a business in Chennai Rs. 20,000
ii. Interest on UK Development Bonds Rs. 10,000 (received in UK)
iii. Dividend from British company received in India Rs. 10,000
iv. Income from a business in New Jersey Rs. 50,000
v. Interest on debentures in an Indian company Rs. 5000
vi. Income from a business in Mumbai, managed from London Rs.
30,000
vii. Income from property situated in Leicester, received there Rs.
15,000
07
OR
(b) Examine the correctness or otherwise (with reason) of the following with
reference to the provisions of the Income-tax Act, 1961:
i. Transfer pricing rules shall have no implication where income is
computed on the basis of book profits.
ii. Assessing Officer can complete the assessment of income from
international transaction by disregarding the order passed by the
Transfer Pricing Officer and accepting the argument of assessee.
07
Q.3 (a) How tax planning can be helpful in financial management decisions?
Discuss.
07
(b) The following are the details of income earned by Ms. Vidhi, a resident
Indian, aged 25, for assessment year 2019-20:
Income from playing snooker matched in country M Rs. 12,00,000
Tax paid in country M Rs. 1,80,000
Income from playing snooker tournaments in India Rs. 19,20,000
Life insurance premium paid Rs. 1,10,000
Compute her taxable income for assessment year 2019-20. There is no
Double Taxation Avoidance Agreement between India and country M.
07
OR
Q.3 (a) Explain various measures for tax planning of non-residents. 07
(b) Mr. Balram is a non-resident. His appeal pertaining to assessment year
2014-15 is pending before Income-tax Appellate Tribunal. The issue
involved computation of export profit and tax thereon. The same issue
pertains for assessment year 2015-16 as well. Mr. Balram?s brother Mr.
Krishna has obtained an advance ruling from the Authority of Advance
Rulings. Mr. Balram proposed to use the said ruling for his assessment of
assessment year 2015-16. Can he do so?
07
Q.4 (a) What is international transaction as per Income-tax Act, 1961? What is
included in its scope?
07
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Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 2830009 Date:06/05/2019
Subject Name: Corporate Taxation
Time: 02:30 PM To 05:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) Objective Questions 06
1.
The liability of tax payer is determined with reference to his or her .
A. Residential status B. Aadhar card
C. Bank account details D. Education
2.
Income received in India by a non-resident company is .
A. Taxable B. Non-taxable
C. Partly taxable D None of the above
3.
OECD stands for
A. Organisation for Ecological Co-
operation and Development
B. Organisation for Economic Co-
operation and Degradation
C. Organisation for Economic
Commerce and Development
D. Organisation for Economic Co-
operation and Development
4.
In India, Authority for Advance Rulings is constituted by .
A. State Government B. Central Government
C. Union Territory D. General Public
5.
Relief from double taxation is available as .
A. Unilateral relief B. Bilateral relief
C. Both (a) and (b) D. None of the above
6.
?The double taxation avoidance agreements entered into by the Government of
India override the domestic law?. This statement is .
A. True B. False
C. Both (a) and (b) D. Neither true nor false
Q.1 (b) Short / Definition Questions 04
1. What is meant by arm?s length price?
2. What is Place of Effective Management?
3. What is advance ruling?
4. What is tax avoidance?
Q.1 (c) Distinguish between Tax Planning and Tax Evasion. 04
Q.2 (a) Discuss tax planning considerations in respect of employees?
remuneration.
07
2
(b) Calculate taxable income in the hands of Mr. John, a non-resident, from
his following sources of income:
i. Income from a business in Chennai Rs. 20,000
ii. Interest on UK Development Bonds Rs. 10,000 (received in UK)
iii. Dividend from British company received in India Rs. 10,000
iv. Income from a business in New Jersey Rs. 50,000
v. Interest on debentures in an Indian company Rs. 5000
vi. Income from a business in Mumbai, managed from London Rs.
30,000
vii. Income from property situated in Leicester, received there Rs.
15,000
07
OR
(b) Examine the correctness or otherwise (with reason) of the following with
reference to the provisions of the Income-tax Act, 1961:
i. Transfer pricing rules shall have no implication where income is
computed on the basis of book profits.
ii. Assessing Officer can complete the assessment of income from
international transaction by disregarding the order passed by the
Transfer Pricing Officer and accepting the argument of assessee.
07
Q.3 (a) How tax planning can be helpful in financial management decisions?
Discuss.
07
(b) The following are the details of income earned by Ms. Vidhi, a resident
Indian, aged 25, for assessment year 2019-20:
Income from playing snooker matched in country M Rs. 12,00,000
Tax paid in country M Rs. 1,80,000
Income from playing snooker tournaments in India Rs. 19,20,000
Life insurance premium paid Rs. 1,10,000
Compute her taxable income for assessment year 2019-20. There is no
Double Taxation Avoidance Agreement between India and country M.
07
OR
Q.3 (a) Explain various measures for tax planning of non-residents. 07
(b) Mr. Balram is a non-resident. His appeal pertaining to assessment year
2014-15 is pending before Income-tax Appellate Tribunal. The issue
involved computation of export profit and tax thereon. The same issue
pertains for assessment year 2015-16 as well. Mr. Balram?s brother Mr.
Krishna has obtained an advance ruling from the Authority of Advance
Rulings. Mr. Balram proposed to use the said ruling for his assessment of
assessment year 2015-16. Can he do so?
07
Q.4 (a) What is international transaction as per Income-tax Act, 1961? What is
included in its scope?
07
3
(b) Specify with reason, whether the following acts can be considered as (a)
tax planning, or (b) tax management, or (c) tax evasion:
i. Mr. P deposits Rs. 1,00,000 in PPF account so as to reduce his
total income from Rs. 3,40,000 to Rs. 2,40,000.
ii. XYZ Ltd. maintains register to record tax deduction at source to
enable time compliance.
iii. An individual tax payer making tax saver deposit in a
nationalized bank.
iv. A partnership firm obtaining declaration from lenders/ depositors
in Form No. 15G/15H and forwarding the same to income-tax
authorities.
v. A company installed air-conditioner costing Rs. 75,000 at the
residence of director. The same was shown as being fitted in the
quality control section of the factory, to claim depreciation.
vi. ABC Ltd. issued a credit note for Rs. 80,000 as brokerage payable
to Mr. Aditya who is the son of the managing director of the
company. This is done to increase the total income of Mr. Aditya
from Rs. 4,00,000 to Rs. 4,80,000 and reduce the income of ABC
Ltd.
vii. A company remitted provident fund contribution of both its own
contribution and employees? contribution on monthly basis
before due date.
07
OR
Q.4 (a) Explain various methods for determining Arm?s Length Price. 07
(b) Q, a non-resident, made an application to the Authority for Advance
Rulings on 02/07/18 in relation to a transaction proposed to be
undertaken by him. On 31/08/18, he decides to withdraw the said
application. Can Q withdraw the application on 31/08/18? Explain with
reason.
07
Q.5 Cosmos Ltd., a company incorporated in Mauritius, has a branch office in
Hyderabad opened in April 2018. The Indian branch has filed return of
income for assessment year 2019-20 disclosing income of Rs. 50,00,000.
It paid tax at the rate applicable to domestic company i.e. 30% plus
education cess on the basis of the clause in Double Taxation Avoidance
Agreement between India and Mauritius, which read as follows:
?The taxation on a permanent establishment which an enterprise of a
contracting state has in the other contracting state shall not be less
favorably levied in that other State than the taxation levied on
enterprises of that other State carrying on the same activities in the same
circumstances.?
However, the Assessing Officer computed tax on Indian branch at the
rate applicable to a foreign company i.e. 40% plus education cess.
Is the action of the Assessing Officer in accordance with law?
14
OR
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Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 2830009 Date:06/05/2019
Subject Name: Corporate Taxation
Time: 02:30 PM To 05:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) Objective Questions 06
1.
The liability of tax payer is determined with reference to his or her .
A. Residential status B. Aadhar card
C. Bank account details D. Education
2.
Income received in India by a non-resident company is .
A. Taxable B. Non-taxable
C. Partly taxable D None of the above
3.
OECD stands for
A. Organisation for Ecological Co-
operation and Development
B. Organisation for Economic Co-
operation and Degradation
C. Organisation for Economic
Commerce and Development
D. Organisation for Economic Co-
operation and Development
4.
In India, Authority for Advance Rulings is constituted by .
A. State Government B. Central Government
C. Union Territory D. General Public
5.
Relief from double taxation is available as .
A. Unilateral relief B. Bilateral relief
C. Both (a) and (b) D. None of the above
6.
?The double taxation avoidance agreements entered into by the Government of
India override the domestic law?. This statement is .
A. True B. False
C. Both (a) and (b) D. Neither true nor false
Q.1 (b) Short / Definition Questions 04
1. What is meant by arm?s length price?
2. What is Place of Effective Management?
3. What is advance ruling?
4. What is tax avoidance?
Q.1 (c) Distinguish between Tax Planning and Tax Evasion. 04
Q.2 (a) Discuss tax planning considerations in respect of employees?
remuneration.
07
2
(b) Calculate taxable income in the hands of Mr. John, a non-resident, from
his following sources of income:
i. Income from a business in Chennai Rs. 20,000
ii. Interest on UK Development Bonds Rs. 10,000 (received in UK)
iii. Dividend from British company received in India Rs. 10,000
iv. Income from a business in New Jersey Rs. 50,000
v. Interest on debentures in an Indian company Rs. 5000
vi. Income from a business in Mumbai, managed from London Rs.
30,000
vii. Income from property situated in Leicester, received there Rs.
15,000
07
OR
(b) Examine the correctness or otherwise (with reason) of the following with
reference to the provisions of the Income-tax Act, 1961:
i. Transfer pricing rules shall have no implication where income is
computed on the basis of book profits.
ii. Assessing Officer can complete the assessment of income from
international transaction by disregarding the order passed by the
Transfer Pricing Officer and accepting the argument of assessee.
07
Q.3 (a) How tax planning can be helpful in financial management decisions?
Discuss.
07
(b) The following are the details of income earned by Ms. Vidhi, a resident
Indian, aged 25, for assessment year 2019-20:
Income from playing snooker matched in country M Rs. 12,00,000
Tax paid in country M Rs. 1,80,000
Income from playing snooker tournaments in India Rs. 19,20,000
Life insurance premium paid Rs. 1,10,000
Compute her taxable income for assessment year 2019-20. There is no
Double Taxation Avoidance Agreement between India and country M.
07
OR
Q.3 (a) Explain various measures for tax planning of non-residents. 07
(b) Mr. Balram is a non-resident. His appeal pertaining to assessment year
2014-15 is pending before Income-tax Appellate Tribunal. The issue
involved computation of export profit and tax thereon. The same issue
pertains for assessment year 2015-16 as well. Mr. Balram?s brother Mr.
Krishna has obtained an advance ruling from the Authority of Advance
Rulings. Mr. Balram proposed to use the said ruling for his assessment of
assessment year 2015-16. Can he do so?
07
Q.4 (a) What is international transaction as per Income-tax Act, 1961? What is
included in its scope?
07
3
(b) Specify with reason, whether the following acts can be considered as (a)
tax planning, or (b) tax management, or (c) tax evasion:
i. Mr. P deposits Rs. 1,00,000 in PPF account so as to reduce his
total income from Rs. 3,40,000 to Rs. 2,40,000.
ii. XYZ Ltd. maintains register to record tax deduction at source to
enable time compliance.
iii. An individual tax payer making tax saver deposit in a
nationalized bank.
iv. A partnership firm obtaining declaration from lenders/ depositors
in Form No. 15G/15H and forwarding the same to income-tax
authorities.
v. A company installed air-conditioner costing Rs. 75,000 at the
residence of director. The same was shown as being fitted in the
quality control section of the factory, to claim depreciation.
vi. ABC Ltd. issued a credit note for Rs. 80,000 as brokerage payable
to Mr. Aditya who is the son of the managing director of the
company. This is done to increase the total income of Mr. Aditya
from Rs. 4,00,000 to Rs. 4,80,000 and reduce the income of ABC
Ltd.
vii. A company remitted provident fund contribution of both its own
contribution and employees? contribution on monthly basis
before due date.
07
OR
Q.4 (a) Explain various methods for determining Arm?s Length Price. 07
(b) Q, a non-resident, made an application to the Authority for Advance
Rulings on 02/07/18 in relation to a transaction proposed to be
undertaken by him. On 31/08/18, he decides to withdraw the said
application. Can Q withdraw the application on 31/08/18? Explain with
reason.
07
Q.5 Cosmos Ltd., a company incorporated in Mauritius, has a branch office in
Hyderabad opened in April 2018. The Indian branch has filed return of
income for assessment year 2019-20 disclosing income of Rs. 50,00,000.
It paid tax at the rate applicable to domestic company i.e. 30% plus
education cess on the basis of the clause in Double Taxation Avoidance
Agreement between India and Mauritius, which read as follows:
?The taxation on a permanent establishment which an enterprise of a
contracting state has in the other contracting state shall not be less
favorably levied in that other State than the taxation levied on
enterprises of that other State carrying on the same activities in the same
circumstances.?
However, the Assessing Officer computed tax on Indian branch at the
rate applicable to a foreign company i.e. 40% plus education cess.
Is the action of the Assessing Officer in accordance with law?
14
OR
4
Q.5 Arif is a resident of both India and another foreign country in the
previous year 2018-19. He owns immovable properties (including
residential houses) in both the countries. He earned income of Rs.
50,00,000 from rubber estates in the foreign country during the financial
year 2018-19. He also sold some house property situated in foreign
country resulting in short-term capital gain of Rs. 10,00,000 during the
year. Arif has no permanent establishment of business in India. However,
he has derived rental income of Rs. 6,00,000 from property let out in
India and he has a Lucknow where he stays during his visit to India.
Double Taxation Avoidance Agreement between Indian and the foreign
country where Arif is resident, provides that ?where an individual is a
resident of both the contracting state, then he shall deemed to be resident
of the contracting state in which he has permanent home available to
him. If he has permanent home in both the contracting states, he shall be
deemed to be resident of the contracting state with which his personal
and economic relations are closer.?
You are required to examine with reasons whether the business income
of Arif arising in foreign income and the capital gains in respect of sale
of the property situated in foreign country can be taxed in India.
14
*************
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This post was last modified on 19 February 2020