| 1. | (a) | Fill in the gaps: | 2x5=10 | |
| | | (i) | Cash in hand of an assessee on excess of _______ is chargeable to wealth tax, if _______ in his books. | | (0) |
| | | (ii) | An individual is subject to surcharge if his total income _______ and a firm is subject to a surcharge of _____ for assessment year 2006–07. | | (0) |
| | | (iii) | A non–resident 70 years old woman's annual income in India in excess of _______ is chargeable to Indian Income–tax, whereas a 60 year old resident woman's income up to Rs. _________ per annum is not taxable. | | (0) |
| | | (iv) | A company is subject to tax under section 115 JB of the IT Act, 1961 on an amount calculated at _____ of _______ for assessment year 2006–07. | | (0) |
| | | (v) | The income accruing in India to a foreign shipping company is taken at ________ of certain amounts attributable to India and is taxed at the rate of _________. | | (0) |
| | (b) | Specify the correct answer. | 2x5=10 | |
| | | (i) | Immovable property located in the border areas is treated under the CST Act as | (a) | Goods, | (b) | Not goods, | (c) | Declared goods, | (d) | Prohibited goods. |
| | (0) |
| | | (ii) | The unutilised CENVAT credit can be carried forward | (a) | up to 6 years, | (b) | up to 8 years, | (c) | without any time limit, | (d) | up to 16 years. |
| | (0) |
| | | (iii) | A manufacturer availed himself of input services for his business — (1) Mobile phones used by sales executives, (2) Audit fees paid to Auditors. Cenvat credit of service tax is available in respect of the excise duty on the final product. | (a) | On mobile phones, | (b) | On Audit fees, | (c) | On all these, | (d) | On none of these. |
| | (0) |
| | | (iv) | CST is not payable on | (a) | Sale of lottery tickets, | (b) | Sale of newspaper, | (c) | Lease of machinery, | (d) | Sale of steel goods. |
| | (0) |
| | | (v) | Goods returned are not liable to CST if they are returned. | (a) | At any time during the financial year in which these were sold, | | (b) | Within 6 months from the end of the said financial year, | | (c) | Within 6 months of sale, | | (d) | None of these. |
| | (0) |
| 2. | (a) | ST Ltd. started on 5.9.2005, a new industrial unit for manufacturing special heating equipment. Four new plants costing Rs. 1 lakh, 2 lakh, 3 lakh and 5 lakh respectively were purchased and installed on 5.10.2005. A new car costing Rs. 3 lakh also was purchased on 15.9.2005, and all these were immediately put to at 15% use. Depreciation per year is allowable. Find out the depreciation allowable for the assessment year 2006–07, and WDV at the end of the year. | 8 | (0) |
| | (b) | Mr. Gupta, a practicing cost accountant has been appointed Cost Auditor of X Ltd. for a fee of Rs. 6 lakh, out of which he received an advance of Rs. 4 lakh on 18th February, 2006 and the balance fees on 16th August, 2006. What are the service tax implications for both the payments? | 4 | (0) |
| | (c) | Which persons are not chargeable to Fringe Benefit Tax? | 4 | (0) |
| 3. | (a) | B, a trader, buys artsilk yarn and gives it to C, a job work contractor for further processing. The cost of the artsilk yarn supplied to C is Rs. 12,000. C bills B at Rs. 3,000 which comprises of process charges Rs. 2,500 and profit Rs. 500. Cost of carriage for moving goods to C's place is Rs. 100 and for moving these back to B, after processing, is Rs. 90. B sells the final product for Rs. 16,200. What is the assessable value of the goods under section 4 of the CE Act? | 7 | (0) |
| | (b) | Under the CE Act, when can two persons be said to be inter–related? | 4 | (0) |
| | (c) | What is the assessable value of goods under section 4 of the Central Excise Act? | 5 | (0) |
| 4. | The following is the summarised Balance Sheet of RS Pvt. Ltd. as on 31.03.2006; | Capital and Liabilities | Rs. | Assets | Rs.
(Market Value) | Rs.
(Schedule III Value) | Paid up Capital
Reserves
Sundry Creditors
Secured & Unsecured Loans | 90,00,000
20,00,000
20,10,000
16,00,000 | Plant & Machinery
Motor Car
Helicopters for business
Purposes
Factory Plot
(purchased 2.1.2004)
House property—
Used for Directors-1's
residence
Used for Debtor-2's
residence
Jewellery
Shares in other companies
Cash in hand
Cash at Bank | 12,00,000
2,00,000
68,00,000
14,00,000
12,00,000
18,00,000
8,00,000
10,00,000
60,000
1,50,000 | (10,00,000)
(1,50,000)
(50,00,000)
(20,00,000)
(6,00,000)
(28,00,000)
(14,00,000)
(15,00,000)
(60,000)
(1,50,000) | | 1,46,10,000 | | 1,46,10,000 | (1,46,60,000) |
Additional Information: | (1) | Gross annual salaries of Directors 1 and 2 are Rs. 4,80,000 and Rs. 6,00,000 respectively. | | (2) | Loans of Rs. 16,00,000 represent Rs. 2 lakh for machinery, Rs. 4 lakh for factors plot and Rs. 10 lakh for helicopters. | | (3) | The factors plot is within municipal limits. | | Compute the net wealth of the company as on 31.03.2006 and the wealth tax payable. |
| 16 | (0) |
|
| 5. | VW Ltd. shifted in March 2005 one of its industrial undertaking in Bangalore to a non–urban area. The relevant details are:
Capital gain u/s 50 in respect of plant and machinery (purchased 30 months back)
Capital gain u/s 50 in respect of factory building (acquired 40 months back)
Capital gain on transfer of the land portion of factory building and surroundings
Expenses of shifting to non–urban area | (Rs. in lakh)
20
12
8
2 |
New machinery had been acquired at Rs.3 lakh for use at the proposed new site. The assessee intends to invest Rs.13 lakh and Rs. 16 lakh in new plant and machinery and in new factory land and building at the new site.
What will be the capital gains for the assessment year 2005–06, if the requisite conditions for relief are satisfied? | 16 | (0) |
| 6. | (a) | VP Ltd. purchases edible groundnut oil and deodorises the same and refines it. The company is advised that there is no manufacture as the item comes under Chapter 15 of the First Schedule to CE Tariff, there being no Sector Note or Chapter Note to the effect that refining of vegetable oil amounts to manufacture. Give your opinion. | 6 | (0) |
| | (b) | PX Ltd. manufactures coffee makers at their plant in Bangalore from where these are moved to various depots. The goods are packed in plain white carton at the factory as a protection during transit. At the depots these cartons are discarded and replaced by printed cartons before effecting sales. The company claims that the cost of the plain white cartons is not includible in the assessable value under the CE Act, 1944. Whether the company's claim is tenable? | 5 | (0) |
| | (c) | X availed of Cenvat credit of Rs. 42,000 for manufacture of dutiable goods, which were lying in the factory till 28.2.2006. From 1.3.2006, the final product was made exempt from duty. How would you deal with the Cenvat credit. | 5 | (0) |
| 7. | B cleared his manufactured final product in July 2005. The duty payable was Basic Rs. 49,000. NCCD Rs. 1,000 and other duties and education cess were payable as applicable. During the month, B received various inputs on which the suppliers had paid duty as bellow:
Basic Rs. 40,000, SED Rs. 4,000, Education cess Rs. 880, Service Tax Rs. 8,000 plus education cess.
How much duty will B have to pay through account current for the month of July, 2005? | 16 | (0) |
| 8. | Explain whether and to what extent the following expenses incurred by a company during the financial year 2005–06 attract Fringe Benefit Tax? | | |
| | (a) | Food and beverages provided to employees at the office during working hours. | 2 | (0) |
| | (b) | Food provided to customers/clients at a restaurant. | 2 | (0) |
| | (c) | Expenses on celebration of Independence Day. | 2 | (0) |
| | (d) | Lodging and boarding of employees of foreign collaborators. | 2 | (0) |
| | (e) | Repairs and depreciation of aircraft used for business of chemicals. | 2 | (0) |
| | (f) | Contribution to an approved superannuation fund and a recognised provident fund for employees. | 4 | (0) |
| | (g) | Commission paid to selling agents for sale of companies products. | 2 | (0) |
