Download GTU MBA 2018 Summer 3rd Sem 2830009 Corporate Taxation Question Paper

Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2018 Summer 3rd Sem 2830009 Corporate Taxation Previous Question Paper

1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3? ? EXAMINATION ? SUMMER 2018

Subject Code: 2830009 Date: 02/05/2018
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)
Multiple Choice Questions. (6 Marks)
1
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, 250000,3000
C. All assessee, 500000,5000 D. HUF,250000,5000

2
Number of digits in a PAN card are-
A. 9 B. 12
C. 8 D. 10

3
Resident/NR and they seek advance ruling in respect of impermissible avoidance
arrangement, has to make an application in form no.
A. 34E B. 34EA
C. 34C D. 34D

4 Identify odd one out for Arms length price methods

A Comparable Uncontrolled price method

B Resale price method
C Profit split method D Double Taxation Agreement

5 __________Exempt from tax unless expressly taxable.
A Capital receipt B Revenue Receipt
C Double Income D None

6 Tea income is chargeable to tax at___
A 40% B 35%
C 60% D 65%

Q.1 (b) Answer the following in brief.(1 Marks Each)
1. GST
2. Assessee
3. Double taxation
4. Finance Act.
04
Q.1 (c) State and explain briefly any 4 Deduction allowable under section 80 of
Income Tax Act.
04

Q.2 (a) List out different areas of Tax Planning and explain any two in detailed. 07
(b) Dividend referred under section 115-O vs Section 2(22)(e). 07
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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3? ? EXAMINATION ? SUMMER 2018

Subject Code: 2830009 Date: 02/05/2018
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)
Multiple Choice Questions. (6 Marks)
1
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, 250000,3000
C. All assessee, 500000,5000 D. HUF,250000,5000

2
Number of digits in a PAN card are-
A. 9 B. 12
C. 8 D. 10

3
Resident/NR and they seek advance ruling in respect of impermissible avoidance
arrangement, has to make an application in form no.
A. 34E B. 34EA
C. 34C D. 34D

4 Identify odd one out for Arms length price methods

A Comparable Uncontrolled price method

B Resale price method
C Profit split method D Double Taxation Agreement

5 __________Exempt from tax unless expressly taxable.
A Capital receipt B Revenue Receipt
C Double Income D None

6 Tea income is chargeable to tax at___
A 40% B 35%
C 60% D 65%

Q.1 (b) Answer the following in brief.(1 Marks Each)
1. GST
2. Assessee
3. Double taxation
4. Finance Act.
04
Q.1 (c) State and explain briefly any 4 Deduction allowable under section 80 of
Income Tax Act.
04

Q.2 (a) List out different areas of Tax Planning and explain any two in detailed. 07
(b) Dividend referred under section 115-O vs Section 2(22)(e). 07
2
OR
(b) X purchases 1000 equity shares in A ltd at the rate of Rs.16 per share
(brokerage: 1%) on December 10, 1979. He gets 500 bonus shares (by
virtue of holding of 1000 shares) on January 10, 1984. Fair market value of
shares of A ltd on 1.4.1981 is Rs.24. on the April 13, 2016; he transfers
1000original shares @Rs.300 per share (brokerage-1.5%) On the April 15,
2016, he transfers 500bonus shares at Rs.310 per share (brokerage-1.5%).
These shares are transferred in BSE. Find out the amount of capital gain.
07

Q.3 (a) Discuss the provisions of tax planning with reference to repairs/ renewal/
renovation.
07
(b) X ltd a paper manufacturing concern, purchase a machine on March 1,1997
for Rs.610000 for its laboratory with view to improving the quality of art
paper manufactured by company.
1. What will be the amount of deduction under section 35 on account
of capital expenditure for the year 19997-1998
2. If the research activity for which machine was purchased ceases in
2015 and machine is brought into business on November 1,
2015(Market value-Rs.230000), depreciation is admissible at the
rate of 15%, Depreciated value of block of assets on 1.4.2015 is
Rs1407860, and the scientific machine is sold for Rs190000 on
4.4.2016, what would be the amount of depreciation?
3. If the research activity for which machine was purchased ceases on
1.11.2015(Market value-Rs.230000), and machine is sold on April
4,2016 without using it for another purpose, Sale price being
Rs190000, or 540000 or 810000 or 2200000.Compute capital gain.
07
OR
Q.3 (a) Throw light on provisions related DTAA and relief available under section
90,90A and 91 with reference to Income tax.
07
(b) Mr. DP (62 years), a non resident is engaged in business of shipping.
During the previous year 16-17 one of the ships owned by X collects
freight as follows:
? On 6.8.2016, a sum of Rs 40 lakh for shipping goods from cochin
part (it includes demurrage of Rs 10000 and handling charges of Rs
60000) and
? On 10.1.2017, a sum of Rs25lakh for shipping goods from Bombay
(it is paid to DP in New York)
? Besides, DP collects Rs 3270000 in India on 3.3.2017 for shipping
goods from Karachi to California.
Barring the cases noted above, DP does not have any other income in India.
DP incurs an expenditure of Rs 240000 in India (out of which Rs 65000 is
paid in cash). DP has brought forward loss of Rs 5000 from trading
business in India which was discontinued in 2015. Compute the tax liability
of DP for AY 2017-18. Assume Mr DP opts for normal assessment under
section 172(7).
07




Q.4 (a) Answer the questions for independent cases of Advance ruling.
1. Applicability of advance ruling and to whom it is binding on?
(2Marks)
2. Cases where Advance ruling to be void in certain circumstances.
(2Marks)
2+2+3
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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3? ? EXAMINATION ? SUMMER 2018

Subject Code: 2830009 Date: 02/05/2018
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)
Multiple Choice Questions. (6 Marks)
1
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, 250000,3000
C. All assessee, 500000,5000 D. HUF,250000,5000

2
Number of digits in a PAN card are-
A. 9 B. 12
C. 8 D. 10

3
Resident/NR and they seek advance ruling in respect of impermissible avoidance
arrangement, has to make an application in form no.
A. 34E B. 34EA
C. 34C D. 34D

4 Identify odd one out for Arms length price methods

A Comparable Uncontrolled price method

B Resale price method
C Profit split method D Double Taxation Agreement

5 __________Exempt from tax unless expressly taxable.
A Capital receipt B Revenue Receipt
C Double Income D None

6 Tea income is chargeable to tax at___
A 40% B 35%
C 60% D 65%

Q.1 (b) Answer the following in brief.(1 Marks Each)
1. GST
2. Assessee
3. Double taxation
4. Finance Act.
04
Q.1 (c) State and explain briefly any 4 Deduction allowable under section 80 of
Income Tax Act.
04

Q.2 (a) List out different areas of Tax Planning and explain any two in detailed. 07
(b) Dividend referred under section 115-O vs Section 2(22)(e). 07
2
OR
(b) X purchases 1000 equity shares in A ltd at the rate of Rs.16 per share
(brokerage: 1%) on December 10, 1979. He gets 500 bonus shares (by
virtue of holding of 1000 shares) on January 10, 1984. Fair market value of
shares of A ltd on 1.4.1981 is Rs.24. on the April 13, 2016; he transfers
1000original shares @Rs.300 per share (brokerage-1.5%) On the April 15,
2016, he transfers 500bonus shares at Rs.310 per share (brokerage-1.5%).
These shares are transferred in BSE. Find out the amount of capital gain.
07

Q.3 (a) Discuss the provisions of tax planning with reference to repairs/ renewal/
renovation.
07
(b) X ltd a paper manufacturing concern, purchase a machine on March 1,1997
for Rs.610000 for its laboratory with view to improving the quality of art
paper manufactured by company.
1. What will be the amount of deduction under section 35 on account
of capital expenditure for the year 19997-1998
2. If the research activity for which machine was purchased ceases in
2015 and machine is brought into business on November 1,
2015(Market value-Rs.230000), depreciation is admissible at the
rate of 15%, Depreciated value of block of assets on 1.4.2015 is
Rs1407860, and the scientific machine is sold for Rs190000 on
4.4.2016, what would be the amount of depreciation?
3. If the research activity for which machine was purchased ceases on
1.11.2015(Market value-Rs.230000), and machine is sold on April
4,2016 without using it for another purpose, Sale price being
Rs190000, or 540000 or 810000 or 2200000.Compute capital gain.
07
OR
Q.3 (a) Throw light on provisions related DTAA and relief available under section
90,90A and 91 with reference to Income tax.
07
(b) Mr. DP (62 years), a non resident is engaged in business of shipping.
During the previous year 16-17 one of the ships owned by X collects
freight as follows:
? On 6.8.2016, a sum of Rs 40 lakh for shipping goods from cochin
part (it includes demurrage of Rs 10000 and handling charges of Rs
60000) and
? On 10.1.2017, a sum of Rs25lakh for shipping goods from Bombay
(it is paid to DP in New York)
? Besides, DP collects Rs 3270000 in India on 3.3.2017 for shipping
goods from Karachi to California.
Barring the cases noted above, DP does not have any other income in India.
DP incurs an expenditure of Rs 240000 in India (out of which Rs 65000 is
paid in cash). DP has brought forward loss of Rs 5000 from trading
business in India which was discontinued in 2015. Compute the tax liability
of DP for AY 2017-18. Assume Mr DP opts for normal assessment under
section 172(7).
07




Q.4 (a) Answer the questions for independent cases of Advance ruling.
1. Applicability of advance ruling and to whom it is binding on?
(2Marks)
2. Cases where Advance ruling to be void in certain circumstances.
(2Marks)
2+2+3
3
3. Fees and Form to be filed for advance ruling. (3Marks)
(b) Mr X (28 Years) is ROR in India. His income is Rs896000 from a business
in India and Rs192000 from business in Foreign country with whom India
has ADT agreement. According to ADT, income is taxable in the country
in which it is earned and not in the other country. However, in the other
country, such income can be considered for tax. Business income of
Rs192000 is taxable at 23%. During the PY, X has deposited Rs42000 in
PPF out which Rs10000 is deposited out of foreign income. He has also
received Rs32000 on Govt securities. Find out the tax liabilities for AY17-
18
7
OR
Q.4 (a) Elaborate Associated Enterprise with reference to Transfer Pricing. 07
(b) X ltd is a manufacturing company. On April 1,2016 it owns Plant A and
Plant B (Rate of Depreciation-15%, Depreciated value of block being
Rs.240000). Plant c (Rate of depreciation-15%) is purchased by company
on June 10,2016 for Rs.60000 and put to use on same day. Find out tax
consequences in following cases:
1. Plant B is destroyed by fire on January 25, 2017.Rs.10000 being
insurance compensation is paid by insurance company on February
10, 2017.
2. Suppose insurance compensation in situation (1) is Rs.370000.
3. All plants are destroyed by fire on January 25, 2017. The
compensation paid by insurance company on February 10, 2017 is
Rs.20000.
07

Q.5 X ltd is a closely held company engaged in manufacture of insecticides and
fertilizers. The value of plant and machinery owned by company is
Rs.55lakh.Compute Book profit.
Particulars Rs.
Domestic sales
Export sales
Amount withdraw from General reserve (Reserve
created in 1996-97 by debiting P&L account)
Amount withdrawn from revaluation reserve
Less:
Depreciation (Normal)
Depreciation (Due to revaluation)
Salary and wages
Wealth tax
Income tax
Outstanding custom duty
Proposed dividend
Consultation fees paid to tax consultant
Other exp
2223900
576100
200000

150000

616000
270000
210000
10000
350000
17500
60000
21000
139000
Net Profit 1456500
The assessee claims the following as deductions:
? Deduction under section 80IB-30% of 1456500
? Depreciation under section 32 is Rs.536000
? The company wants to set up following losses
Particulars For Tax Purpose For Accounting Purpose
B/F loss of 2010-11 1480000 400000
Unabsorbed depreciation Nil 70000
Compute the tax liability.
14
OR


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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3? ? EXAMINATION ? SUMMER 2018

Subject Code: 2830009 Date: 02/05/2018
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)
Multiple Choice Questions. (6 Marks)
1
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, 250000,3000
C. All assessee, 500000,5000 D. HUF,250000,5000

2
Number of digits in a PAN card are-
A. 9 B. 12
C. 8 D. 10

3
Resident/NR and they seek advance ruling in respect of impermissible avoidance
arrangement, has to make an application in form no.
A. 34E B. 34EA
C. 34C D. 34D

4 Identify odd one out for Arms length price methods

A Comparable Uncontrolled price method

B Resale price method
C Profit split method D Double Taxation Agreement

5 __________Exempt from tax unless expressly taxable.
A Capital receipt B Revenue Receipt
C Double Income D None

6 Tea income is chargeable to tax at___
A 40% B 35%
C 60% D 65%

Q.1 (b) Answer the following in brief.(1 Marks Each)
1. GST
2. Assessee
3. Double taxation
4. Finance Act.
04
Q.1 (c) State and explain briefly any 4 Deduction allowable under section 80 of
Income Tax Act.
04

Q.2 (a) List out different areas of Tax Planning and explain any two in detailed. 07
(b) Dividend referred under section 115-O vs Section 2(22)(e). 07
2
OR
(b) X purchases 1000 equity shares in A ltd at the rate of Rs.16 per share
(brokerage: 1%) on December 10, 1979. He gets 500 bonus shares (by
virtue of holding of 1000 shares) on January 10, 1984. Fair market value of
shares of A ltd on 1.4.1981 is Rs.24. on the April 13, 2016; he transfers
1000original shares @Rs.300 per share (brokerage-1.5%) On the April 15,
2016, he transfers 500bonus shares at Rs.310 per share (brokerage-1.5%).
These shares are transferred in BSE. Find out the amount of capital gain.
07

Q.3 (a) Discuss the provisions of tax planning with reference to repairs/ renewal/
renovation.
07
(b) X ltd a paper manufacturing concern, purchase a machine on March 1,1997
for Rs.610000 for its laboratory with view to improving the quality of art
paper manufactured by company.
1. What will be the amount of deduction under section 35 on account
of capital expenditure for the year 19997-1998
2. If the research activity for which machine was purchased ceases in
2015 and machine is brought into business on November 1,
2015(Market value-Rs.230000), depreciation is admissible at the
rate of 15%, Depreciated value of block of assets on 1.4.2015 is
Rs1407860, and the scientific machine is sold for Rs190000 on
4.4.2016, what would be the amount of depreciation?
3. If the research activity for which machine was purchased ceases on
1.11.2015(Market value-Rs.230000), and machine is sold on April
4,2016 without using it for another purpose, Sale price being
Rs190000, or 540000 or 810000 or 2200000.Compute capital gain.
07
OR
Q.3 (a) Throw light on provisions related DTAA and relief available under section
90,90A and 91 with reference to Income tax.
07
(b) Mr. DP (62 years), a non resident is engaged in business of shipping.
During the previous year 16-17 one of the ships owned by X collects
freight as follows:
? On 6.8.2016, a sum of Rs 40 lakh for shipping goods from cochin
part (it includes demurrage of Rs 10000 and handling charges of Rs
60000) and
? On 10.1.2017, a sum of Rs25lakh for shipping goods from Bombay
(it is paid to DP in New York)
? Besides, DP collects Rs 3270000 in India on 3.3.2017 for shipping
goods from Karachi to California.
Barring the cases noted above, DP does not have any other income in India.
DP incurs an expenditure of Rs 240000 in India (out of which Rs 65000 is
paid in cash). DP has brought forward loss of Rs 5000 from trading
business in India which was discontinued in 2015. Compute the tax liability
of DP for AY 2017-18. Assume Mr DP opts for normal assessment under
section 172(7).
07




Q.4 (a) Answer the questions for independent cases of Advance ruling.
1. Applicability of advance ruling and to whom it is binding on?
(2Marks)
2. Cases where Advance ruling to be void in certain circumstances.
(2Marks)
2+2+3
3
3. Fees and Form to be filed for advance ruling. (3Marks)
(b) Mr X (28 Years) is ROR in India. His income is Rs896000 from a business
in India and Rs192000 from business in Foreign country with whom India
has ADT agreement. According to ADT, income is taxable in the country
in which it is earned and not in the other country. However, in the other
country, such income can be considered for tax. Business income of
Rs192000 is taxable at 23%. During the PY, X has deposited Rs42000 in
PPF out which Rs10000 is deposited out of foreign income. He has also
received Rs32000 on Govt securities. Find out the tax liabilities for AY17-
18
7
OR
Q.4 (a) Elaborate Associated Enterprise with reference to Transfer Pricing. 07
(b) X ltd is a manufacturing company. On April 1,2016 it owns Plant A and
Plant B (Rate of Depreciation-15%, Depreciated value of block being
Rs.240000). Plant c (Rate of depreciation-15%) is purchased by company
on June 10,2016 for Rs.60000 and put to use on same day. Find out tax
consequences in following cases:
1. Plant B is destroyed by fire on January 25, 2017.Rs.10000 being
insurance compensation is paid by insurance company on February
10, 2017.
2. Suppose insurance compensation in situation (1) is Rs.370000.
3. All plants are destroyed by fire on January 25, 2017. The
compensation paid by insurance company on February 10, 2017 is
Rs.20000.
07

Q.5 X ltd is a closely held company engaged in manufacture of insecticides and
fertilizers. The value of plant and machinery owned by company is
Rs.55lakh.Compute Book profit.
Particulars Rs.
Domestic sales
Export sales
Amount withdraw from General reserve (Reserve
created in 1996-97 by debiting P&L account)
Amount withdrawn from revaluation reserve
Less:
Depreciation (Normal)
Depreciation (Due to revaluation)
Salary and wages
Wealth tax
Income tax
Outstanding custom duty
Proposed dividend
Consultation fees paid to tax consultant
Other exp
2223900
576100
200000

150000

616000
270000
210000
10000
350000
17500
60000
21000
139000
Net Profit 1456500
The assessee claims the following as deductions:
? Deduction under section 80IB-30% of 1456500
? Depreciation under section 32 is Rs.536000
? The company wants to set up following losses
Particulars For Tax Purpose For Accounting Purpose
B/F loss of 2010-11 1480000 400000
Unabsorbed depreciation Nil 70000
Compute the tax liability.
14
OR


4
Q.5 X ltd is a manufacturing company located in India. Business income of
company for the PY 16-17 under section 28 is Rs4000000. X ltd holds
share in few companies.
Investee
Companies
Country of
incorporation
of investee co
Shareholding
of X td in
Investee co %
Dividend
received
during PY
2016-17
Whether
investee
co has
paid tax
under sec
115O
A India 51 40000 Yes
B India 26 50000 Yes
C Country C 51 60000 No
D Country C 26 70000 No
E Country C 25 80000 No
On1.9.2016, X ltd declares a dividend of Rs500000 for its own shares. Find
out the tax liabilities(income tax and DDT sec.115O on assumption that
India has ADT agreement with country C and as per agreement dividend
income is taxable in India and not in Country C.
14


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