Download GTU MBA 2016 Summer 3rd Sem 2830009 Corporate Taxation Ct Question Paper

Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2016 Summer 3rd Sem 2830009 Corporate Taxation Ct Previous Question Paper

1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER (3) ? EXAMINATION ? SUMMER 2016

Subject Code:2830009 Date: 02/05/2016
Subject Name: CORPORATE TAXATION (CT)
Time: 10.30 AM TO 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.

Q. No. Answer the following multiple choice questions: 06
Q.1 (a) Tonnage tax scheme is applicable in the following cases:
1.
A. Foreign Shipping Company B. Indian Shipping Company
C. Limited Liability partnership in
shipping industry
D. None of the above
2.
A company want to purchase a plant (cost: 80 crore).It can out rightly
purchase it. Alternatively it can take the plant on lease. The following factors are
taken into consideration to find out which one is better.

A. Corporate tax rate B. Corporate tax rate and
depreciation rate

C. Corporate tax rate, depreciation
rate, lease rate, cost of capital
and useful life of plant
D. None of above
3.
If a firm is converted into company, capital gain in the hands of firm is not
chargeable to tax. This exemption is available, if a few conditions given by
section 47(xiii) are satisfied. One of the condition is-

A. All the shareholders in the
company should be partner in
the firm immediately before
succession
B. All the partners in the firm
should become shareholders in
the company

C. Both these conditions should
be satisfied
D. None of these conditions is
relevant

4.
Dividend paid by the Indian Company is:
A. Taxable in India in the hand of
recipients
B. Exempted in the hand of
recipients

C. Taxable in the hand of the
company but exempted in the
hand recipients
D. Taxable in the hand of recipients
but exempted for the company

5.
Income which accrue outside India from a business controlled from India is
taxable in case of :

A. Resident Only B. Not Ordinarily resident only
C. Both ordinarily resident and
NOR
D. Non-resident
6.
Unabsorbed depreciation which could not be set off in the same assessment
year, can be carried:

A. 8 Years B. Indefinitely
C. 4 Years D. 2 Years
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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER (3) ? EXAMINATION ? SUMMER 2016

Subject Code:2830009 Date: 02/05/2016
Subject Name: CORPORATE TAXATION (CT)
Time: 10.30 AM TO 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.

Q. No. Answer the following multiple choice questions: 06
Q.1 (a) Tonnage tax scheme is applicable in the following cases:
1.
A. Foreign Shipping Company B. Indian Shipping Company
C. Limited Liability partnership in
shipping industry
D. None of the above
2.
A company want to purchase a plant (cost: 80 crore).It can out rightly
purchase it. Alternatively it can take the plant on lease. The following factors are
taken into consideration to find out which one is better.

A. Corporate tax rate B. Corporate tax rate and
depreciation rate

C. Corporate tax rate, depreciation
rate, lease rate, cost of capital
and useful life of plant
D. None of above
3.
If a firm is converted into company, capital gain in the hands of firm is not
chargeable to tax. This exemption is available, if a few conditions given by
section 47(xiii) are satisfied. One of the condition is-

A. All the shareholders in the
company should be partner in
the firm immediately before
succession
B. All the partners in the firm
should become shareholders in
the company

C. Both these conditions should
be satisfied
D. None of these conditions is
relevant

4.
Dividend paid by the Indian Company is:
A. Taxable in India in the hand of
recipients
B. Exempted in the hand of
recipients

C. Taxable in the hand of the
company but exempted in the
hand recipients
D. Taxable in the hand of recipients
but exempted for the company

5.
Income which accrue outside India from a business controlled from India is
taxable in case of :

A. Resident Only B. Not Ordinarily resident only
C. Both ordinarily resident and
NOR
D. Non-resident
6.
Unabsorbed depreciation which could not be set off in the same assessment
year, can be carried:

A. 8 Years B. Indefinitely
C. 4 Years D. 2 Years
2
Q.1 (b) Define the following:
1.Tax Evasion
2.Double Taxation
3.Permissible deductions
4. Companies in which public are substantially interested.
04
Q.1 (c) 1. Who is liable to pay dividend tax?
2. Explain the provisions for Telecom Licence fees (Sec.35ABB).
04

Q.2 (a) Explain capital gain exemption under sections 54 to 54 GA.

07
(b) B joined a company, on 1-6-2014 and was paid the following
emoluments and allowed perquisites as under:
Emoluments: Basic pay 25,000 per month, D.A 10,000 per month,
Bonus 50,000
Perquisites:
i) Furnished accommodation in Delhi owned by the employer
and provided free of cost.
ii) Value of furniture therein 3,00,000.
iii) Motor-car owned by the company (with engine c.c less than
1.6 liters) along with chauffeur for official and personal
use.
iv) Sweeper salary paid by company 1,500 per month.
v) Watchman salary paid by company 1,500 per month.
vi) Educational facility for 2 children provided free of cost. The
school is owned and maintained by the company.
vii) Interest free loan of 6,25,000 given on 1-1-15 for purchase
of a house. No repayment was made during the year.
Assume SBI rate to be 8 % p.a.
viii) Interest free loan for purchase of computer of 50,000
given on 1-1-2015.No repayment was made during the
year. Assume SBI rate to be 10 % p.a.
ix) Corporate membership of club. The initial fee of 1,00,000
was paid by the company. B paid the bills for his use of
Club facilities.
You are required to compute the income of B under the
head? Salaries? in respect of assessment year 2015-
16.Suitable assumptions may be made, wherever
necessary.
07


OR
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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER (3) ? EXAMINATION ? SUMMER 2016

Subject Code:2830009 Date: 02/05/2016
Subject Name: CORPORATE TAXATION (CT)
Time: 10.30 AM TO 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.

Q. No. Answer the following multiple choice questions: 06
Q.1 (a) Tonnage tax scheme is applicable in the following cases:
1.
A. Foreign Shipping Company B. Indian Shipping Company
C. Limited Liability partnership in
shipping industry
D. None of the above
2.
A company want to purchase a plant (cost: 80 crore).It can out rightly
purchase it. Alternatively it can take the plant on lease. The following factors are
taken into consideration to find out which one is better.

A. Corporate tax rate B. Corporate tax rate and
depreciation rate

C. Corporate tax rate, depreciation
rate, lease rate, cost of capital
and useful life of plant
D. None of above
3.
If a firm is converted into company, capital gain in the hands of firm is not
chargeable to tax. This exemption is available, if a few conditions given by
section 47(xiii) are satisfied. One of the condition is-

A. All the shareholders in the
company should be partner in
the firm immediately before
succession
B. All the partners in the firm
should become shareholders in
the company

C. Both these conditions should
be satisfied
D. None of these conditions is
relevant

4.
Dividend paid by the Indian Company is:
A. Taxable in India in the hand of
recipients
B. Exempted in the hand of
recipients

C. Taxable in the hand of the
company but exempted in the
hand recipients
D. Taxable in the hand of recipients
but exempted for the company

5.
Income which accrue outside India from a business controlled from India is
taxable in case of :

A. Resident Only B. Not Ordinarily resident only
C. Both ordinarily resident and
NOR
D. Non-resident
6.
Unabsorbed depreciation which could not be set off in the same assessment
year, can be carried:

A. 8 Years B. Indefinitely
C. 4 Years D. 2 Years
2
Q.1 (b) Define the following:
1.Tax Evasion
2.Double Taxation
3.Permissible deductions
4. Companies in which public are substantially interested.
04
Q.1 (c) 1. Who is liable to pay dividend tax?
2. Explain the provisions for Telecom Licence fees (Sec.35ABB).
04

Q.2 (a) Explain capital gain exemption under sections 54 to 54 GA.

07
(b) B joined a company, on 1-6-2014 and was paid the following
emoluments and allowed perquisites as under:
Emoluments: Basic pay 25,000 per month, D.A 10,000 per month,
Bonus 50,000
Perquisites:
i) Furnished accommodation in Delhi owned by the employer
and provided free of cost.
ii) Value of furniture therein 3,00,000.
iii) Motor-car owned by the company (with engine c.c less than
1.6 liters) along with chauffeur for official and personal
use.
iv) Sweeper salary paid by company 1,500 per month.
v) Watchman salary paid by company 1,500 per month.
vi) Educational facility for 2 children provided free of cost. The
school is owned and maintained by the company.
vii) Interest free loan of 6,25,000 given on 1-1-15 for purchase
of a house. No repayment was made during the year.
Assume SBI rate to be 8 % p.a.
viii) Interest free loan for purchase of computer of 50,000
given on 1-1-2015.No repayment was made during the
year. Assume SBI rate to be 10 % p.a.
ix) Corporate membership of club. The initial fee of 1,00,000
was paid by the company. B paid the bills for his use of
Club facilities.
You are required to compute the income of B under the
head? Salaries? in respect of assessment year 2015-
16.Suitable assumptions may be made, wherever
necessary.
07


OR
3
(b) Zankar Ltd.is a company engaged in the development of property.
The shares issued by it carry the right of occupancy in building
constructed by it in proportion to the holding. For construction of the
office complex, the company collected new refundable deposits for
its shareholders, and leased them floor space proportionately to the
share held. The premises were let out by the shareholders who
receive rental income. The company also collected amounts towards
maintenance charge from each shareholder in respect of the premises
let out by them. On the following issues your advice is sought:
a) Are the non-refundable deposits taxable in the company?s
hands and what is the basis for computing the income of the
company?
b) Discuss the taxability or otherwise of the maintenance charge
collected?
c) Are the shareholders assessable on the rental income received
by them and if so, how?
07

Q.3 (a) Define Company, Indian Company and Domestic Company. 07
(b) Find out the net income in the cases of Suraj (32 years) and Chand
( 28 years) ( both are retail traders at Delhi) from the following data
for the assessment year 2010-11:
Particulars Suraj Chand

Sales turnover 40,00,000 60,00,000
Less: Expenses
Cost of Goods sold 36,00,000 54,00,000
Depreciation 10,000 15,000
Other expenses 3,20,000 4,80,000
Business Income 70,000 1,05,000
Other Income 2,15,000 2,30,000
Public Provident Contribution 30,000 60,000
07
OR
Q.3 (a) Explain the conditions applicable for arm?s length price in the
international transactions.
07
(b) Mr.Rhythm (24 years) is a musician deriving income from concerts
performed outside India of 9,50,000.Tax of 1,90,000 was deducted
at source in the country where the concert were given and remaining
7,60,000 is remitted to India. India does not have any agreement with that
country for avoidance of taxation. Assuming that the Indian income of
Mr.Rhythm is 2,00,000,what is the relief due to him under section 91 for
assessment year 2010-11,assuming that Mr.Rhythm has deposited
22,000 in the public Provident fund account.
07

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1

Seat No.: ________ Enrolment No.___________

GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER (3) ? EXAMINATION ? SUMMER 2016

Subject Code:2830009 Date: 02/05/2016
Subject Name: CORPORATE TAXATION (CT)
Time: 10.30 AM TO 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.

Q. No. Answer the following multiple choice questions: 06
Q.1 (a) Tonnage tax scheme is applicable in the following cases:
1.
A. Foreign Shipping Company B. Indian Shipping Company
C. Limited Liability partnership in
shipping industry
D. None of the above
2.
A company want to purchase a plant (cost: 80 crore).It can out rightly
purchase it. Alternatively it can take the plant on lease. The following factors are
taken into consideration to find out which one is better.

A. Corporate tax rate B. Corporate tax rate and
depreciation rate

C. Corporate tax rate, depreciation
rate, lease rate, cost of capital
and useful life of plant
D. None of above
3.
If a firm is converted into company, capital gain in the hands of firm is not
chargeable to tax. This exemption is available, if a few conditions given by
section 47(xiii) are satisfied. One of the condition is-

A. All the shareholders in the
company should be partner in
the firm immediately before
succession
B. All the partners in the firm
should become shareholders in
the company

C. Both these conditions should
be satisfied
D. None of these conditions is
relevant

4.
Dividend paid by the Indian Company is:
A. Taxable in India in the hand of
recipients
B. Exempted in the hand of
recipients

C. Taxable in the hand of the
company but exempted in the
hand recipients
D. Taxable in the hand of recipients
but exempted for the company

5.
Income which accrue outside India from a business controlled from India is
taxable in case of :

A. Resident Only B. Not Ordinarily resident only
C. Both ordinarily resident and
NOR
D. Non-resident
6.
Unabsorbed depreciation which could not be set off in the same assessment
year, can be carried:

A. 8 Years B. Indefinitely
C. 4 Years D. 2 Years
2
Q.1 (b) Define the following:
1.Tax Evasion
2.Double Taxation
3.Permissible deductions
4. Companies in which public are substantially interested.
04
Q.1 (c) 1. Who is liable to pay dividend tax?
2. Explain the provisions for Telecom Licence fees (Sec.35ABB).
04

Q.2 (a) Explain capital gain exemption under sections 54 to 54 GA.

07
(b) B joined a company, on 1-6-2014 and was paid the following
emoluments and allowed perquisites as under:
Emoluments: Basic pay 25,000 per month, D.A 10,000 per month,
Bonus 50,000
Perquisites:
i) Furnished accommodation in Delhi owned by the employer
and provided free of cost.
ii) Value of furniture therein 3,00,000.
iii) Motor-car owned by the company (with engine c.c less than
1.6 liters) along with chauffeur for official and personal
use.
iv) Sweeper salary paid by company 1,500 per month.
v) Watchman salary paid by company 1,500 per month.
vi) Educational facility for 2 children provided free of cost. The
school is owned and maintained by the company.
vii) Interest free loan of 6,25,000 given on 1-1-15 for purchase
of a house. No repayment was made during the year.
Assume SBI rate to be 8 % p.a.
viii) Interest free loan for purchase of computer of 50,000
given on 1-1-2015.No repayment was made during the
year. Assume SBI rate to be 10 % p.a.
ix) Corporate membership of club. The initial fee of 1,00,000
was paid by the company. B paid the bills for his use of
Club facilities.
You are required to compute the income of B under the
head? Salaries? in respect of assessment year 2015-
16.Suitable assumptions may be made, wherever
necessary.
07


OR
3
(b) Zankar Ltd.is a company engaged in the development of property.
The shares issued by it carry the right of occupancy in building
constructed by it in proportion to the holding. For construction of the
office complex, the company collected new refundable deposits for
its shareholders, and leased them floor space proportionately to the
share held. The premises were let out by the shareholders who
receive rental income. The company also collected amounts towards
maintenance charge from each shareholder in respect of the premises
let out by them. On the following issues your advice is sought:
a) Are the non-refundable deposits taxable in the company?s
hands and what is the basis for computing the income of the
company?
b) Discuss the taxability or otherwise of the maintenance charge
collected?
c) Are the shareholders assessable on the rental income received
by them and if so, how?
07

Q.3 (a) Define Company, Indian Company and Domestic Company. 07
(b) Find out the net income in the cases of Suraj (32 years) and Chand
( 28 years) ( both are retail traders at Delhi) from the following data
for the assessment year 2010-11:
Particulars Suraj Chand

Sales turnover 40,00,000 60,00,000
Less: Expenses
Cost of Goods sold 36,00,000 54,00,000
Depreciation 10,000 15,000
Other expenses 3,20,000 4,80,000
Business Income 70,000 1,05,000
Other Income 2,15,000 2,30,000
Public Provident Contribution 30,000 60,000
07
OR
Q.3 (a) Explain the conditions applicable for arm?s length price in the
international transactions.
07
(b) Mr.Rhythm (24 years) is a musician deriving income from concerts
performed outside India of 9,50,000.Tax of 1,90,000 was deducted
at source in the country where the concert were given and remaining
7,60,000 is remitted to India. India does not have any agreement with that
country for avoidance of taxation. Assuming that the Indian income of
Mr.Rhythm is 2,00,000,what is the relief due to him under section 91 for
assessment year 2010-11,assuming that Mr.Rhythm has deposited
22,000 in the public Provident fund account.
07

4
Q.4 (a) Dhun Ltd., paper manufacturing concern, purchases a machine on
March 1,2002 for 6,10,000 for its laboratory with a view to improving
the quality of art paper manufactured by the company.
1) What will be the amount of deduction under section 35 on account
of capital expenditure of 6,10,000 for the A.Y 2002-03.
2) If the research activity for which the aforesaid machine is
purchased ceased in 2008 and the machinery is brought into
business proper on November 1,2008 ( market value :
2,30,000):depreciation is admissible at the rate of 15 per cent;
depreciation value of the relevant block of assets on April 1,2008 is
14,07,860, the scientific research machine is sold for 1,90,000
on April 2009, what will be the amount of depreciation and amount
of chargeable profit under section 41(3).

(b) Explain the procedure of filling application for advance ruling. 07
OR
Q.4 (a) Discuss the tax benefits for various forms of organization: Firm, LLP
and Company with reference to new business.
07
(b) Give suitable example to explain the tax benefits for converting a
sole proprietary business into a company.
07


Q.5 XYZ (P).Ltd is a company which was started on April 1,1999 and in
which there are only equity shares. The shares are held throughout by
X,Y and Z equally. The company has made losses/profits in the past
as under and the same have been accepted in the income-tax
assessments:
Assessment year Business Loss Unabsorbed depreciation Total
( ) ( ) ( )
2006-07 Nil 30,00,000 30,00,000
2007-08 Nil 18,00,000 18,00,000
2008-09 9,50,000 8,70,000 18,20,000
Total 9,50,000 56,70,000 66,20,000

During the previous year ended March 31,2009, X transferred his shares to
P and during the previous year ended March 31,2010,Y transferred his
shares to Q. During the previous year March 31,2009,the company made a
profit of 12,00,000(before debiting 6,00,000 for depreciation) and
during the previous year ended March 31,2010,the company made a profit
of 80,00,000 (before debiting 5,00,000 for depreciation).
Compute the taxable income of the company for the A.Y 2010-11.Working
should form part of your answer.
14
OR

Q.5
Ms.Swara is offered an employment by Music Ltd at a basic salary of 1,24,000
per month. Other allowances according to rules of the company are; dearness
allowance: 18 per cent of basic pay ( not forming part of salary for calculating
retirement benefits), bonus:1 month basic pay: project allowance: 6 per cent of
basic pay.
The company gives Ms.Swara an option either to take a rent-free unfurnished
accommodation at Bhopal for which the company would directly bear the rent of
45,000 per month, or to accept a house rent allowance of 45,000 per month and
find out own accommodation .If Ms.Swara opts for house rent allowance, she will
have to pay 45,000 per month for an unfurnished house. Her income from other
sources is 1,70,000.
Determine the best option for Ms.Swara. Working note will be consider as a part
of your answer
14

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