| 1. | Answer any ten of the following, giving brief reasons not exceeding 3 to 4 sentences. | 2x10 | |
| | (a) | Assessee manufacturing cement had mines 20 kms. away from factory. He was using explosives in mines. Use of explosives is necessary for manufacture of his final product i.e. cement. Can he avail Cenvat credit of duty paid on the explosives? | | (0) |
| | (b) | An exemption notification stated that the exemption is available only, If manufacturer uses inputs on which appropriate duty has already been paid. The inputs were exempt from duty. Assessee claimed that Nil duty is also a duty and hence he is entitled to exemption, as he has paid required duty. Is he entitled to exemption? | | (0) |
| | (c) | An assessee was under impression that his product is exempt from excise duty and hence sold the goods @ Rs. 100 per piece without charging excise duty. Later, it was found that actually, the product was dutiable @ 16%. Department claimed that since goods were removed without duty, assessable value should be Rs. 100 and duty is payable accordingly. Assessee contended that price of Rs. 100 should be taken as cum duty price and actual duty payable should be calculated by back calculations. Determine the correct duty payable per piece. | | (0) |
| | (d) | State correct or wrong. | (i) | Settlement Commission cannot entertain cases pending with the Appellate Tribunal or any Court; | | (ii) | Settlement Commission cannot entertain application involving classification of excisable goods; | | (iii) | No CST is payable if goods are supplied an EOU unit; | | (iv) | Countervailing duty is payable on safeguard duty also. |
| | (0) |
| | (e) | A manufacturer purchased inputs from supplier 'ABC Co.' The invoice was for Rs. 11,000, comprising of price of goods as Rs. 10,000 and Rs. 1,000 as excise duty, which is available as Cenvat Credit to the manufacturer. Pass Journal entry for the purchase of goods. | | (0) |
| | (f) | State whether following are includible in value for purpose of levy of Customs duty. | (i) | Technical know how related to imported machinery; | | (ii) | Erection charges for erecting machinery in India; | | (iii) | Special introductory high discount offered to new buyer in India by foreign supplier. |
| | (0) |
| | (g) | Siddhu has to pay Rs. 22,500 as an advance tax on September 15, 2002 for A.Y. 2003–2004. He actually paid the amount on September 30, 2002. He is liable to pay interest for delay for | (i) | Half month; | (ii) | One month; | (iii) | Three months; | (iv) | None of these. |
| | (0) |
| | (h) | No tax is to be deducted at source from interest on debentures if | (i) | Debentures are issued by a company in which the public are substantially interested; | | (ii) | Debentures are listed in a recognised Stock Exchange in India; | | (iii) | Interest is paid by an account payee cheque; | | (iv) | The aggregate amount of interest paid does not exceed Rs. 2,500; | | (v) | All of the above. |
| | (0) |
| | (i) | The relevant form in which declaration of non taxable total income is to be furnished by the individual (not being a senior citizen) in the case of interest other than interest on securities is | (i) | Form No. 15H; | (ii) | Form No 15F; | | (iii) | Form No. 15G; | (iv) | Form No. 13. |
| | (0) |
| | (j) | Deduction under section 80D of income Tax Act is applicable to | (i) | Only individual; | (ii) | Only HUF; | | (iii) | Only individual and HUF; | (iv) | All assessees. |
| | (0) |
| | (k) | Assessee has claimed Rs. 70,000 under section 10(10AA) in the year 2000–01. What is the maximum amount available if at all to be claimed in the AY 2003–04? | (i) | Rs. 2,50,000; | (ii) | Rs. 2,30,000; | | (iii) | Rs. 1,80,000; | (iv) | None of these. |
| | (0) |
| 2. | (a) | Explain the meaning of ‘normal value’, ‘margin of dumping’ and ‘injury margin’. How would you determine ‘normal value’ in case of Import from non–market economy countries? What are the restrictions on levy of dumping duty in respect of Imports from WTO countries? | 10 | (0) |
| | (b) | State the conditions for accepting 'transaction value' as 'assessable vlaue' for purpose of Valuation under Central Excise. | 6 | (0) |
| 3. | (a) | An assessee availed Cenvat credit of duty paid on all the inputs. His clearances comprised of following:- | (i) | Part of his final products was exported directly without payment of excise duty. | | (ii) | Part of his final products was sold to another manufacturer. The manufacturer used them in his manufacture and then exported his final product. The goods were cleared under bond without payment of duty. | | (iii) | Some of the inputs were used in manufacture of final products which were exempt from duty. Assessee has not maintained separate account of inputs used in such exempted final products. | | (iv) | Balance quantity of his final products was used for home consumption on payment of excise duty at normal rates. |
Discuss provisions in respect of Cenvat credit which he had availed on inputs used in final products which were exported. | 8 | (0) |
| | (b) | A company offers its shares to employees under Employee Stock Option Scheme at concessional rate. Discuss tax liablity of employee who has received such share under the scheme. | 8 | (0) |
| 4. | (a) | State the doctrine of unjust enrichment in case of refunds under Central Excise and Customs. Discuss applicability of this doctrine in case of— | (i) | Goods captively consumed by importer and not sold; | | (ii) | Goods cleared under Provisional Assessment. |
| 8 | (0) |
| | (b) | State provisions of the Income–tax Act, 1961 in respect of set off and carry forward of loss under the head 'Profits and Gains of business of profession'. | 8 | (0) |
|
| 5. | (a) | Distinguish between tax avoidance and tax evasion. | 4 | (0) |
| | (b) | State the ingredients which make tax planning a legitimate exercise. | 4 | (0) |
| | (c) | Ram staying in USA wishes to come to India during 2003 and stay for atleast 100 days. He has been in India for more than 365 days during the four years preceding the relevant previous year. Advise as to how he can fulfill his desire without losing his non–residential status. | 4 | (0) |
| | (d) | State the conditions that should be satisfied for a merger to quality as an "amalgamation" for the purpose of Income Tax Act. | 4 | (0) |
| 6. | Discuss whether the following are taxable assets under Wealth Tax Act for Assessment year 2003–2004. | (a) | Guest house for entertaining personal guests. | | (b) | Office building given on rent. | | (c) | Residential house owned by an individual and allotted to one of his officers whose salary is Rs. 40,000 p.m. | | (d) | Residential house owned by an company and allotted to one of its whole–time directors, whose salary is Rs. 40,000 p.m. | | (e) | Motor car used by a person as a Tourist Taxi. | | (f) | Aircraft held by Jet Airways. | | (g) | Urban unused land held by an individual for industrial purposes and which was acquired on 31st March, 2000. | | (h) | Anand the assessee, gifts 500 gms. of gold in 1994 to his wife, who sells it for Rs. 12,50,000 in March, 2000 and purchases a house. Value of the house on March 31, 2002 is Rs. 18 lakhs. In whose wealth the value of the house will be included on 31st March, 2002 and at what value? | | (i) | Balu gifts a house to a trust for the benefit of his wife in 1973. Who is assessable thereon? | | (j) | Chandru sells a house worth Rs. 10 lakhs to his daughter–in–law for Rs. 6 lakhs in June, 1998. The value of the house on 31st March 2002 is Rs. 12 lakhs. Who is assessable thereon? |
| 16 | (0) |
| 7. | (a) | Tej Electric Supply Company Ltd. which was charging depreciation on straight line method and whose actual cost of the asset was Rs. 20,00,000 and written down value Rs. 18,72,300 sold the said asset during 2002–03 after 2 years. What will be the tax treatment for assessment year 2003–2004 if the asset is sold for— | (i) | Rs. 30,000; | (ii) | Rs. 18,72,300; | (iii) | Rs. 19,80,000; | (iv) | Rs. 21,00,000? |
| 8 | (0) |
| | (b) | X Ltd. is engaged in the business of manufacture of air–conditioners since 1996. On March 31, 2002 installed capacity is 50 lakh units (per annum). During the previous year 2002-03, the following assets are acquired to substantially expand the installed capacity (installed capacity on March 31, 2003 is 55 lakh units p.a.); | (Rs. in thousand) |
Rate of depreciation | Block I
25% | Number of assets in the block
Depreciation value of the block on April 1, 2002
Addition of plants (new) during the previous year 2002–03
Is additional depreciation available? If so, how much? | 5
49.00
64.00 |
| 8 | (0) |
| 8. | (a) | Mr. Ramkumar, a resident Indian, furnishes the following information for the year ended 31.3.2003: | Rs. | Business income
Brokerage earned from Country T
Tax paid in Country T for above (in equivalent INR)
Long–term capital gains | 4,60,000
60,000
36,000
1,40,000 |
India does not have any Double Taxation Avoidance Agreement with country T. Is he entitled to any double taxation relief, and if so, how much? | 7 | (0) |
| | (b) | What are the various taxation aspects to be considered by management in deciding to shut down or continue a business unit? | 9 | (0) |
