| 1. | Specify the correct answer giving brief reasons where necessary. | 2x10 | |
| | (a) | A foreign company means a company which is not a | (i) | Indian company, | | (ii) | Private company, | | (iii) | Domestic company, | | (iv) | Public company. |
| | (0) |
| | (b) | The capital gain on transfer of a long–term capital asset other than a house is exempt u/s 54F of the IT Act, 1961 for | (i) | An individual, | | (ii) | An individual and Hindu Undivided Family, | | (iii) | An individual who is a senior citizen, | | (iv) | A resident individual. |
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| | (c) | If a return of income filed by an assessee is considered defective u/s 139/(9) of the IT Act, 1961, the assessee is allowed to rectify the defect within | (i) | 30 days, | | (ii) | 1 month, | | (iii) | 60 days | | (iv) | 15 days. |
| | (0) |
| | (d) | Fill up the gaps:
A revised return u/s 139(5) may be filed within _______ years from the end of assessment year or before completion of assessment whichever is ______. | | (0) |
| | (e) | A motor car is not a chargeable asset u/s 2(ea) of the Wealth Tax Act, 1957, if it is used by the assessee in the business of | (i) | Running it on hire, | | (ii) | Infrastructure development, | | (iii) | A new industrial undertaking, | | (iv) | A factory in a remote locality. |
| | (0) |
| | (f) | In order to attract CE Duty, the goods must be | (i) | Excisable, movable and marketable, | | (ii) | Manufactured or produced in India, | | (iii) | All of the these | | (iv) | None of the above. |
| | (0) |
| | (g) | The amounts not includible in the transaction value of the purpose of CED are | (i) | packing charges, | | (ii) | design and engineering charges, | | (iii) | loading and handling charges with in the factory, | | (iv) | none of the above. |
| | (0) |
| | (h) | Tourists visiting India have been defined in the Baggage Rules as persons coming to India for legitimate | (i) | non–immigration purpose like touring, recreation, study, etc., | | (ii) | immigration purpose such as settling down in India, | | (iii) | non–immigration purpose other than religious pilgrimage, | | (iv) | non–immigration purpose other than health reasons. |
| | (0) |
| | (i) | Inter–State sale is defined in Sec. 3 of CST Act as a sale or purchase that occasions the movement of goods from | (i) | one state to another, | | (ii) | one country to another, | | (iii) | one State Government to another, | | (iv) | One district in one State to another district in the same State through another State. |
| | (0) |
| | (j) | Which one of the following is incorrect? | (i) | From C can be issued by a registered dealer, | | (ii) | CST is collected in the State in which the goods are delivered, | | (iii) | Sales in the course of export are exempt from CST, | | (iv) | Electricity is chargeable to CST. |
| | (0) |
| 2. | Mr. X enters into a partnership with three other persons on July 1, 2005 to start a manufacturing business.
The following assets are contributed by X as his capital. | Land
Rs. | Gold
Rs. | Shares in a company
Rs. | | Fair market value of July 1, 2005 | 19,00,000 | 9,00,000 | 4,00,000 | Value of the asset recorded in the
books of the firm on 1.7.2005 |
17,00,000 |
6,90,000 |
4,50,000 | | Date of acquisition by X | May 1, 1942 | June 10, 2003 | Nov. 2, 2004 | | Cost of acquisition by X | 1,500 | 4,40,000 | 4,70,000 | | Fair market value as on 1.4.1981 | 90,000 | — | — | | Cost Inflation Index in FY 2005–06 | 497 |
On July 31, 2006, he deposits Rs. 18,00,000 in a bank account for the purpose of Section 54F (he already owns one residential house). The construction of a new residential house if completed on June 21, 2008. The amount of investment in the house is Rs. 8,60,000, which is met from the deposit account. Assuming that Mr. X's other income is Rs. 80,000 and Rs. 2,40,000 in the previous years 2005–06 and 2008–09, what will be his net income in the relevant assessment years? | 16 | (0) |
| 3. | X Co. Ltd., providing telecommunication services, obtains a telecom licence on April 1, 2002 for a period of 10 years ending on 31.3.2012. The licence is not renewable. The company has two options for making the payment:
(a) to pay Rs. 10 lakh on April 1, 2002, or
(b) to pay Rs. 12 lakh on April 1, 2006. Assuming that each year's total receipts and expenses (excluding the licence fees) will be Rs. 50 lakh and Rs. 30 lakh; find out the better option. | 16 | (0) |
| 4. | P Co. Ltd. is required to submit its Income Tax Return by 31 October, 2006. According to the draft return prepared by it, the gross amount of tax payable works out at Rs. 10 lakh, while it had paid Rs. 6 lakh by way of advance tax and Rs. 80,000 by way of deduction of tax at source. It wants to delay the submission of the Return up to 30.3.2007. It expects to earn income @ 30% per annum on the money employed in the business, by taking overdraft from the bank at 15% per annum. Advise P Co. Ltd. whether it is worthwhile to delay the submission of the Return. | 16 | (0) |
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| 5. | B Ltd. manufactures two products, viz. Eye Ointment E and Skin Ointment S. S is a specified product u/s 4A of the CE Act, 1944. The sales prices of E and S are Rs. 43 and Rs. 33 per unit. These prices include 16% Excise duty as BED, 8% Excise duty as SED and Education cess of 2%, as also CST of 4%. Additional information available; | Units cleared — | E
S | 1,00,000 units
1,50,000 units | | Deduction permissible u/s 4A—40% |
Calculate the total excise duty liability on each product. | 16 | (0) |
| 6. | (a) | (i) | M/s. A Ltd., Mumbai sells iron rods to M/s. B Ltd. in Vijaywada both being registered dealers, for a value of Rs. 10,00,000 including 4% CST. The total sales tax on iron rods in Mumbai is 3%. Ascertain the CST payable. | 5 | (0) |
| | | (ii) | If B Ltd. is unable to submit From C, being an unregistered dealer, what will be the CST liability if the local sales tax rate is 12%?
N.B. Iron rods are not ‘ declared ’ goods. | 5 | (0) |
| | (b) | Explain what are the essentials of a valid sale. What is a deemed sale? | 6 | (0) |
| 7. | An importer imported raw materials @ 25000 US $ FOB. The goods were packed for which packing charges of 600 US $ were charged extra. The goods were stuffed in a returnable container, the price of which is 2000 US $. Insurance and Sea–freight were 250 US $ and 800 US $. Brokerage paid by importer 500 US $. Customs duty is 20%, Education cess is 2%, Excise duty on similar goods in India is 16%. Find the duty payable. (1 US $ = Rs. 42.38)
How much Cenvat can be availed of by importer, if he is a manufacturer? | 16 | (0) |
| 8. | M/s.R Limited is engaged in the business of construction of residential flats and selling or letting them out. The following particulars are available regarding assets and liabilities on 31st March, 2006. | Rs. | | 1. | Land in urban area:
(a) On which construction is not permitted
(b) 2 unsold flats |
15,00,000
20,00,000 | 2.
3.
4.
5. | Motor cars taken on hire for 2 years
Share in a company
Cash balance (as per Books)
Cash Bank | 7,00,000
3,00,000
1,75,000
2,50,000 | | 6. | Quarters provided to 6 employees. 6 x 12,00,000
(out of which are occupied by the Manager and
Assistant Manager, having a monthly salary of
Rs. 55,000 and 48,000 respectively.) |
72,00,000 | 7.
8. | Loan taken for purchasing above shares
Sundry debtors | 2,00,000
5,00,000 |
Calculate the WT payable. | 16 | (0) |
