| 1. | (a) | State with reasons, where necessary, if the following are True or False: | 2x6=12 | |
| | | (i) | A tax payer converts his capital asset into stock in trade. There is “no transfer” since the person, who holds the asset before and after the act, is the same. | | (0) |
| | | (ii) | A client presents a computer to X, a Chartered Accountant, who represents his case before the Income Tax Authorities. The value of the benefit is taxable in the hands of X. | | (0) |
| | | (iii) | An insurance company, which has taken possession of the damageed goods of the Insured is a dealer if such goods are sold by the Insurance Company, later on. | | (0) |
| | | (iv) | S.T. is leviable on sale of stocks, shares and securities traded by a dealer in shares. | | (0) |
| | | (v) | Hides and skins are “declared goods”. | | (0) |
| | | (vi) | Shares held by an individual are not to be included in computing his net wealth. | | (0) |
| | (b) | Fill in the gaps: | 2x4=8 | |
| | | (i) | Time limit for filing revised return when assessment has not been completed, is _______ from the end of the assessment year. | | (0) |
| | | (ii) | An Indian Citizen came to Indian for the first time (after 20 years) on May 28, 2006 and stayed up to December 5, 2006. His residential status is _______. | | (0) |
| | | (iii) | The State from which _______ commences shall be the _______ State empowered to assess, collect and enforce payment of CST. | | (0) |
| | | (iv) | Clearance in relation to any imported goods (cargo) means _______. | | (0) |
| 2. | (a) | State some important factors affecting management decisions in regard to making a product (part of a component), or buy it from manufacturers, for its existing unit. | 8+8=16 | (0) |
| | (b) | State the conditions to be satisfied for a 'merger' to qualify as amalgamation' for purposes of the Income Tax Act and give two instances of transactions not to be treated as amalgamation. | | (0) |
| 3. | (a) | Briefly discuss about the exigibility to Fringe Benefit Tax (FBT) and the value of the fringe benefit in respect of each item in the hands of Mega Airways Ltd: | | |
| | | (i) | Concessional air tickets to 30 employees. Each air ticket sold at Rs. 4,000 to public has been given to each employee at a concessional rate of Rs. 1,000 for their private journeys. | 2 | (0) |
| | | (ii) | Expenses on lunch and dinner meetings with suppliers of assessee, Rs. 1,10,000. This would include Rs. 30,000 in respect of expenses for the employees accompanying the suppliers. | 4 | (0) |
| | | (iii) | Conference expenses for employees:
Participation fee
Domestic travel expenses
Foreign travel expenses
Boarding and lodging expenses:
Domestic
Foreign | Rs.
1,40,000
80,000
2,40,000
50,000
1,60,000 |
| 3 | (0) |
| | | (iv) | Boarding and lodging expenditure incurred on employees for attending training programmes conducted by Indian Aviation Council Rs. 60,000. | 2 | (0) |
| | (b) | M/s. Kunal & Co., a partnership firm, whose turnover is Rs. 62,00,000 filed its return of income on 29–10–2007, showing a loss of Rs. 2,40,000. On 29–11–2007, it is seen that certain expenses to the extent of Rs. 80,000 have been omitted to be claimed. Can a revised return be filed in December, 2007? Will your answer be different if the original return had been filed on 3–11–2007? | 5 | (0) |
| 4. | Write short notes on any four of the following: | 4x4=16 | |
| | (a) | Computerization of invoices for central excise purposes. | | (0) |
| | (b) | Supplementary invoice for differential central excise duty. | | (0) |
| | (c) | Value of goods and tooling supplied by buyer under the Customs Act. | | (0) |
| | (d) | Income–tax exemption for international sporting events. | | (0) |
| | (e) | Quantum of income–tax exemption for SEZ unit. | | (0) |
| | (f) | Income–tax treatment of derivative transactions. | | (0) |
|
| 5. | (a) | Enumerate the list of persons/entities treated as "invididual" u/s. 3 of the Wealth–tax Act. | 3 | (0) |
| | (b) | Who are the persons/entities to whom Wealth–tax is not applicable u/s. 45 of the Wealth–tax Act? | 3 | (0) |
| | (c) | Is wealth tax a debt owed on the valuation date and hence deductible while computing net wealth? | 3 | (0) |
| | (d) | On what grounds can it be said that partial partition is de–recognized under the Wealth–tax Act? | 3 | (0) |
| | (e) | How far is the exemption of public charitable trust under the Income–tax Act, 1961 relevant for exemption under the Wealth–tax Act? | 4 | (0) |
| 6. | (a) | Big Ltd., supplies raw material to a job worker Small Ltd. After completing the job–work, the finished product of 5,000 packets are returned by Small Ltd. to Big Ltd. putting the retail sale price as Rs. 20 on each packet. The product in the packet is covered under MRP provisions and 40% abatement is available on it. Determine the assessable value under Central excise law from the following details: *Cost of Raw material supplied Rs. 30,000/–* Job worker’s charges including profit Rs. 10,000/–* Transportation charges for sending the raw material to the job worker Rs. 3,000/–* Transportation charges for returning the finished packets to Big Ltd. Rs. 4,000/–. | 6 | (0) |
| | (b) | List the 'Capital goods' which are eligible for purpose of availment of Cenvat credit. | 7 | (0) |
| | (c) | Explain restrictions on availing depreciation in respect of capital goods on which Cenvat credit has been availed. | 3 | (0) |
| 7. | An importer has imported a machine from UK at FOB cost of 10,000 UK Pounds. Other details are as follows: | (a) | Freight from UK to Indian port was 700 pounds. | | (b) | Insurance was paid to insurer in India: Rs. 6,000. | | (c) | Design and development charges of 2,000 UK pounds were paid to a consultancy firm in UK. | | (d) | The importer also spent an amount of Rs. 50,000 in India for development work connected with the machinery. | | (e) | Rs. 10,000 were spent in transporting the machinery from Indian port to the factory of importer. | | (f) | Rate of exchange as announced by RBI was: Rs. 68.82 = one UK pound. | | (g) | Rate of exchange as announced by CBE & C (Board) by notification under section 14(3)(a)(1): Rs. 68.70 = One UK pound. | | (h) | Rate at which bank recovered the amount from importer: Rs. 68.35 = One UK pound. | | (i) | Foreing exporters have an Agent in India. Commission is payable to the agent in Indian Rupees @ 5% of FOB price.
Customs duty payable was 10%. If similar goods were produced in India, excise duty payable as per tariff is 24%. There is an excise exemption notification which exempts the duty as is in excess of 16%. Education cess is 2% and Secondary and Higher Education Cess is 1%. Find customs duty payable. How much Cenvat can be availed by importer, if he is manufacturer? |
| 16 | (0) |
| 8. | (a) | What are the goods eligible for registration by a dealer under Central Sales Tax. A certificate in prescribed form is required to be given by registered dealer to avail the concessional rate of CST. Name any two such forms. | 7 | (0) |
| | (b) | A registered dealer was eligible to purchase certain goods at concessional rate of CST. However, through oversight, the goods were not included in his registration certificate. He issued C form for purchase of the goods. State the consequences. | 3 | (0) |
| | (c) | Mr. A, an individual, aged 50, has made the following payments during the financial year 2006–07: | (i) | Prepayment of entire outstanding housing loan balance of Rs. 80,000 as on 1-4-2006. The loan was taken from HDFC Ltd 10 years ago. He repaid this amount out of the maturity proceeds of his life insurance policy (Rs. 1,90,000) which he received on 1-4-2006. | | (ii) | He contributed Rs. 15,000 to recognized provident fund (by way of deduction from salary). | | (iii) | He purchased National Savings Certificates Rs. 5,000. | | (iv) | He paid his health insurance premium of Rs. 10,000 through his credit card on 31–3–2007. He paid the credit card company the amount on 25–4–2007.
What is the amount of deduction to which Mr. A is entitled to under sections 80C and 80D for the assessment year 2007–08? |
| 6 | (0) |
