1. | (a) | Fill in the gaps: | 1x6=6 | |
| | (i) | A transaction of reverse mortgage is ________ (regarded/not regarded/partly regarded) as "transfer" for the purpose of capital gains. | | (0) |
| | (ii) | For a dealer in shares, securities transaction tax will ________ (be allowed/not be allowed/be partly allowed) as business expenditure under the Income–tax Act, 1961. | | (0) |
| | (iii) | Every person being a company or firm: Due date for filling the return under section 139(1) is ________. | | (0) |
| | (iv) | The maximum amount of penalty leviable u/s. 117 of Customs Act, 1962 is Rs. ________ (1,00,000/2,00,000/50,000). | | (0) |
| | (v) | The customs duty on project imports is ________ (5%, 10%, 15%). | | (0) |
| | (vi) | Where excise duty has been paid on provisional basis, refund claim should be filed within ________ after duty has been adjusted in final assessment. (90 days, one year, six months). | | (0) |
| (b) | State with reasons, whether true or false: | 2x7=14 | |
| | (i) | A charitable or religious trust or institution is required to file an application for registration under section 12A within one year from the date of creation of the trust or establishment of institution. | | (0) |
| | (ii) | Capital gains arising in respect of compensation received on compulsory acquisition of capital asset is chargeable as income of the previous year in which it was compulsorily acquired. | | (0) |
| | (iii) | Where the return of income is not furnished by the assessee on or before the due date, interest is payable under section 234B. | | (0) |
| | (iv) | TDS provisions under section 194C are not attracted in respect of payments made by an individual or HUF to a contractor. | | (0) |
| | (v) | In case of transactions of taxable service with an associate enterprises, service tax is required to be paid not on receipt basis, but on receipt or date of credit/debit entries in the books of account, whichever is earlier. | | (0) |
| | (vi) | The Assessing Officer is not empowered suo moto to extend the time limit for completion of special audit to be conducted u/s. 142(2A) of Income Tax Act, 1961. | | (0) |
| | (vii) | Once the exemption to a public charitable trust is withdrawn by application of clauses (c) or (d) of section 13(1) of the Income–tax Act, 1961, wealth–tax becomes leviable on such trust. | | (0) |
2. | Vivitha & Co., a partnership firm engaged in hotel business, furnishes the following data pertaining to the year ended 31–03–2009: | Rs. | (a) | Expenditure on telephones: Land Lines Mobiles | 3,40,000 4,30,000 | (b) | Expenditure on guest houses: Used as transit office Used for training | 1,95,000 3,10,000 | (c) | Travel expenses: Foreign travel for purchasing a machine Domestic | 3,40,000 1,90,000 | (d) (e) | Expenditure on display of services Employees welfare | 49,000 2,40,000 | (f) | Contribution to superannuation fund of employees: Employee A Employee B | 90,000 1,40,000 | (g) (h) | Scholarships to children of employees Expenses on hospitality | 50,000 1,60,000 | Following additional information are available: 1. | Expenditure relating to land line telephones include Rs. 1,70,000 towards leased telephone lines. | 2. | Employees welfare expenses include Rs. 28,000 for creche facilities for the employees’ children and Rs. 41,000 for annual sports meet of the employees. | 3. | Expenses on hospitality include Rs. 15,000 towards expenditure on food and refreshment to employees in office. |
Calculate the Fringe Benefit Tax (FBT) payable and the advance FBT payable under section 115WJ of the Income–tax Act, 1961 for the assessment year 2009–2010. | 16 | (0) |
3. | (a) | State in brief, the exception to the rule that the income of the previous year should be taxed in the immediately following year. | 6 | (0) |
| (b) | Give four instances of income deemed to be received in India. | 2 | (0) |
| (c) | Suggest a few tax planning measures for non–residents/collaborators. | 8 | (0) |
4. | (a) | Hema Biomedical Ltd., an existing company, propose to acquire a building from LMN Ltd., for a total purchase consideration of Rs. 60 lakh on 01.03.2009. The building will be used as a laboratory from 14–03–2009 onwards. The registration of the building as per the Indian Registration Act is likely to complete in the second week of April, 2009. The board of directors of Hema Biomedical Ltd., wishes to know whether the company can claim depreciation under the Income–tax Act, 1961, for the above building for assessment year 2009–2010 Advise. | 6 | (0) |
| (b) | Vasudha Plastics Ltd., has purchased machinery from Himanshu Ltd., Tokyo on 31–10–2007 for 1,00,000 USD. The supplier has given credit of one year for making the payment. On 31–10–2007, the exchange rate was Rs. 42 per USD and on 30–10–2008, when the company made the payment, it was Rs. 45 per USD. This was the only machinery in the block. During the year ended 31–03–2009, the machinery was used for 170 days. The company wants to know the depreciation it can claim in respect of this machinery, for the assessment year 2008–2009 and 2009–2010. Calculate the depreciation and WDV for both years. | 7 | (0) |
| (c) | Nathan Tea Ltd., growing tea in its plantations manufactures and sells tea. During the year ended 31–03–2009, they propose to start a nursery and sell saplings. The saplings are grown in the nursery but the basic operations on these saplings will be carried out by another person in his land. Discuss whether Nathan Tea Ltd., can treat the income from sale of saplings as agricultural income or whether the same should be taken as business income. | 3 | (0) |
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5. | (a) | Janak Electricals Ltd., manufactures two products Land M, L being a product specified under section 14A of the Central Excise Act, 1944. The sale prices of Land M are Rs. 60 and Rs. 40.80 per unit, respectively. The above includes 14% basic excise duty, as increased by 3% education cess and secondary higher education cess, also 2% CST. For product L, 30% abatement is allowable under section 4A. 10,000 units of each product were removed from the factory to sales depots. You are required to compute the excise duty liability. | 8 | (0) |
| (b) | What are the documents required to be furnished by an exporter for claim of rebate of excise duty? | 6 | (0) |
| (c) | State briefly the provisions relating to storage of non–duty paid goods outside the factory, contained in Rules 4(4) of the Central Excise Rules, 2002. | 2 | (0) |
6. | (a) | Explain the meaning of the term "Bill of export" and "import report" under the provisions of the Customs Act, 1962. | 4 | (0) |
| (b) | How is the valuation for CVD carried out as per section 3(1) of the Customs Act, 1962, when the goods are under MRP provisions? | 4 | (0) |
| (c) | Domino Computers Ltd., has placed before you two options relating to import of 10,000 laptop computers: (i) | Import the laptop, pre–loaded with operating system. | (ii) | Import the laptop computer without the operating system, and under agreement with the manufacturers, load the operating system as packaged software, after it is cleared from customs. One of the non–executive directors conversant with customs law argues that operating system software is separate from the hardware. The software should be classified separately from the laptop, under Heading 85.24, and not as a complete machine under the Heading 84.71. |
You are required to help the management in making a suitable decision from the customs duty point of view. | 5 | (0) |
| (d) | Discuss briefly the penalty leviable under section 114 of the Customs Act, 1962 for improper exportation of goods. | 3 | (0) |
7. | (a) | Distinguish between Tax Planning and Tax Management. | 8 | (0) |
| (b) | Enumerate in brief, the conditions to be satisfied by the amalgamating and amalgamated Companies in order to avail carry forward and set off of losses benefit under the IT law. | 8 | (0) |
8. | Write short notes on the following (any four): | 4x4=16 | |
| (a) | Reverse mortgage; | | (0) |
| (b) | Exemptions from New wealth; | | (0) |
| (c) | ‘Capital goods’ under CENVAT Rules; | | (0) |
| (d) | Exemptions from Customs Duty u/s. 25 of Customs Act; | | (0) |
| (e) | Goods and excisable goods; | | (0) |
| (f) | ‘Dealer’ as defined in CST Act. | | (0) |