Seat No.: Enrolment No.
GUJARAT TECHNOLOGICAL UNIVERSITY
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MBA - SEMESTER 3 EXAMINATION - WINTER 2018
Subject Code: 2830009 Date: 06/12/2018
Subject Name: CORPORATE TAXATION
Time: 10:30 AM To 01:30 PM Total Marks: 70
Instructions:
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- Attempt all questions with reference to P.Y.2017-18 & A.Y.2018-19
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
Q.1
(a) Multiple Choice Questions. (1 Marks Each)
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- Rebate under section 87A is available to if net income does not exceed and subject to maximum limit of Rs
A. Resident Individual, 500000,5000 B. Resident Individual, 350000,2500
C. All assessee, 500000,5000 D. HUF,250000,5000 - Deduction in respect of specified business — section 35AD
A. 100% B. 120%--- Content provided by FirstRanker.com ---
C. 150% D. 105% - Estimated income of assessee engaged in any business except plying, hiring of vehicles under 44AD in case of non banking channel is
A. 8% of Turnover B. 2 % of Turnover
C. 5% of Turnover D. 2.5% of Turnover - Identify odd one out for Arms length price methods
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A Comparable Uncontrolled price' method B Resale price method
C Profit split method D Double Taxation Agreement - Loss from activity of owning and maintaining race horses can be carried forward for
A 2 years B 4 years
C 1 years D 10 years - GST is
A Direct tax B Indirect tax
C MAT D AMT
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(b) Answer the following in brief with reference to P.Y.2017-18 & A.Y.2018-19 (1 Marks Each)
- Rebate under section 87A
- Tax rate under section 115-0 (i.e. DDT)
- List out different Indirect Taxes in India
- Double Taxation Relief.
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Q.1 Differentiate whether following activities are considered as (i) Tax planning; or (ii) Tax management; or (iii) Tax evasion.
- 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.
- SQL Ltd. maintains register of tax deduction at source affected by it to enable timely compliance.
- An individual tax payer making tax saver deposit of Rs 1,00,000 in a nationalized bank.
- A partnership firm obtaining declaration from lenders/depositors in Form No. 15G/15H and forwarding the same to income-tax authorities.
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Q.2 (a) Explain specified domestic transactions Sec. 92BA of Income Tax Act, 1961 with reference to Transfer Pricing provisions. (07)
(b) Write brief note on provisions related to Advance Ruling as per Income Tax Act, 1961. (07)
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OR
(b) Mr. provides you the following information. Compute tax liability of MrX for A.Y.2018-19. (07)
- Income from salary Rs485000
- Income from house property Rs25000
- Other income Rs35000
- Investment in PF for deduction under section 80C Rs10000
- Mediclaim premium Rs3000
- TDS deducted Rs1000.
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Q.3 (a) Discuss the provisions of tax planning with reference Capital structure decisions. (07)
(b) On 1.4.2017 depreciated value of block of assets (Rate of depreciation- 15%) is Rs.80, 000. It consists Plant A and B. The assessee purchase plant C (Rate-15%) on December 28; 2017 for Rs.30, 000 and sells plant A on 3.5.16 for Rs.1, 80,000. Caleculate Amount of depreciation for PY 17-18 as it is very significant tax planning provision. (07)
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OR
Q.3 (a) Discuss different tax practices in India with reference to Tax Planning, Tax Evasion, Tax Avoidance and Tax Management. (07)
(b) Kakaji Co. is a limited liability partnership (date of commencement of business June.1,2017). It owns and operates retail outlets in different parts of North India. During the previous year 2017-18, it appoints the following persons (07)
| Date of appointment | No of employees | Post of person | Salary per person (Rs) |
|---|---|---|---|
| May 1,2017 | 8 | Storekeeper | 18,000 |
| June 1,2017 | 12 | Salesperson | 25,000 |
| July 1,2017 | 4 | Supervisor | 28,000 |
| October 1,2017 | 25 | Helper | 11,000 |
| Total 49 |
Determine the amount of deduction available under section 80JJAAfor deduction in respect of employment of new employees for the assessment year 2018-19 assuming that turnover of X & Co.for the previous year 2017-18 is Rs. 6 crore and tax audit under section 44AB is applicable.
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Q.4 (a) State any 7 exempted incomes of non-resident. (7)
(b) X Itd, a company providing telecommunication services obtains a telecom license on 20.4.2017 for the period of 10years which ends on 31.3.2027 (license fees being Rs.18lakh).Find out the deduction amount u/s35ABB if (7)
- Entire amount is paid on 6.5.2017 or
- Entire amount is paid on 1.4.2018
- Entire amount is paid in three equal installments on 30.4.2017, 30.4.2018, and 30.4.2019
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OR
(a) Elaborate Associated Enterprise with reference to Transfer Pricing. (07)
(b) Mr.Jagga Singh is engaged in business of plying goods carriages. On 1.4.2017, he owns 10 trucks (out of 6 are heavy goods). On 6.5.2017, he sold one of the heavy goods vehicle and purchase light goods vehicle on 10.5.2017. The new vehicle could however be put to use only on 17.6.2017. Compute total income of Mr.Jagga for A.Y2018-19 after considering followings: (07)
| Particulars | Amt.Rs |
|---|---|
| Freight charges collected | 445000 |
| Less: | |
| Operational exp | 320000 |
| Depreciation sec.32 | 95000 |
| Other office exp | 7500 |
| 422500 | |
| Net profit | 22500 |
| Other business and non business income | 335000 |
Q:5 Following is the profit and loss account of Z Ltd! for the year ended on 31-3-2018
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| To Raw material consumed | 23,25,000 | By Sale | 1,60,00,000 |
| To Rent | 3,50,000 | By Closing Stock | 10,00,000 |
| To Salary & Wages | 12,00,000 | By Revaluation Reserve | 25,000 |
| To Depreciation | 5,00,000 | By General Reserve | 65,000 |
| To Provision for contingencies | 75,000 | By Dividend (Domestic Co,) | 35,000 |
| To Wealth Tax | 50,000 | ||
| To Provision for bad debts | 40,000 | ||
| To Proposed dividend | 1,00,000 | ||
| To Provision for Income tax | 1,05,000 | ||
| To Net Profit | 1,23,80,000 | ||
| 1,71,25,000 | 1,71,25,000 |
Additional Information
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- Company is entitled to get exemption u/s 10(38) Rs1,00,000
- The amount of depreciation includes depreciation on revaluation of assets Rs 50,000.
- Further, for the purpose of Income tax, depreciation is Rs4,00,000.
- Turnover of the company during the previous year was Rs 53 crores
- In past few years, company had suffered losses, following balances are still unabsorbed: As per Income tax Act As per books of Accounts
- Depreciation Rs65,00,000 Nil
- Losses Rs35,50,000 Nil
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As a tax consultant you are required to compute book profit for AY 20180-19. (14Marks)
OR
Explain the following independent cases. (6+6+2 Marks)
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- Business profit of X Itd, a tea growing & manufacturing company is Rs.70lakh for the A.Y2017-18. It deposits Rs.25lakh in “special account” for claiming deduction u/s 33AB. It wants to claim set off of brought forward business loss of Rs.1200000.
- By withdrawing Rs.20lakh on 20™ Jan’2018 from the special account. X 1td purchase a non depreciable assets for Rs.18 lakh according to scheme framed by Tea board. The remaining amount of Rs.2lakh is not utilized up to 31.3.2018
- The assets which is purchased for Rs.18 lakh is sold to Y for Rs.31 lakh on 3™ Dec’2020.
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