CWA ICWA Inter - Stage I : Business Taxation - December 2009

CWA ICWA Inter - Stage I • Business Taxation • December 2009

This Paper has 43 answerable questions with 0 answered.

1—8(BTN) Revised Syllabus
Time Allowed : 3 Hours	Full Marks : 100

The figures in the margin on the right side indicate full marks.
Wherever required, suitable assumptions may be made by the candidate and stated clearly in the answer.
All questions relate to the assessment year 2009—2010.
SECTION A
Answer Question No. 1 which is COMPULSORY and any two from the rest in this section.
Marks

The figures in the margin on the right side indicate full marks.

Wherever required, suitable assumptions may be made by the candidate
and stated clearly in the answer.

All questions relate to the assessment year 2009—2010.

SECTION A

Answer Question No. 1 which is COMPULSORY and any two from the rest in this section.

Marks

(a)

Fill up the blanks:

(i)

The rate of income–tax applicable to non–resident male individual whose total income is Rs.2,90,000 is Rs. ............. plus ........ % of excess over Rs. ................ .

1½

(0)

(ii)

X Ltd. paid interest of Rs.40,000 to Mr. A on 21.1.2009 and Rs.60,000 on 1–3–2009. The required TDS amount was remitted on 29–9–2009. The amount to be disallowed under section 40(a)(ia) of the Income–tax Act, 1961 is Rs. ............. .

(0)

(iii)

Where a house property is rented, the interest on borrowed capital is deductible up to Rs. ........... (30,000, 1,50,00, unlimited amount, amount of net annual value).

(0)

(iv)

Exemption under section 54 of the Income–tax Act, 1961 arising from transfer of a Residential house is available to an ............ and a ............ .

(0)

(v)

Salary is taxable on due or receipt basis, whichever is ............ .

(0)

(vi)

For an individual who has derived taxable short–term capital gains of Rs.40,000 from sale of equity shares and having other income of Rs.1,00,000, the tax payable is Rs. ............. .

(0)

(b)

State with reasons whether true or false:

2x4=8

(i)

Any interest received from interest on Government bonds is exempt in the hands of a Sikkemese individual, regardless of the quantum.

(0)

(ii)

No surcharge is payable by a company whose total income is rupees one crore or less.

(0)

(iii)

Deposit in an account under Senior Citizens Savings account qualifies for deduction under section 80C of the Income–tax Act, 1961, subject to the overall ceiling limit.

(0)

(iv)

An existing assessee engaged in trading activities can claim additional or accelerated depreciation under section 31(2)(iia) in respect.

(0)

(a)

Mr. A owns commercial house property which is situated at Pune. The difference between unbuilt area and specified area is 22% of the aggregate area. The property was acquired on 31.05.1988 for Rs.12,50,000. The property is built on freehold land. How will the property be valued for wealth–tax purposes?

(0)

(b)

Discuss the tax implication arising consequent to conversion of a capital asset into Stock in Trade of business and its subsequent sale.

(0)

(c)

Write short note on any two of the following:

2x5

(i)

Scheme of submission of income– return through–tax return prepare as notified by the CBDT;

(0)

(ii)

Definition of “Infrastructure Capital Fund” as per section 2(26B) of the Income–tax Act, 1961;

(0)

(iii)

‘Marginal relief’ in relation to surcharge on Income–tax.

(0)

(a)

Enumerate the circumstances under which a return of income can be treated as defective.

(0)

(b)

‘A’ living in his apartment (fair rent Rs.96,000) till April 2008, shifted to a house provided by his employer as rent free accommodation by his new employer company. his apartment was vacant for 3 months (May to July) and could be let out only from August for Rs.15,000 per month. Find out the Gross Annual Value to be adopted.

(0)

(c)

Mr. X, a businessman, paid sales tax of Rs.1,50,000 in 2004–2005 and the entire amount was allowed as deduction while computing the business Income. He died and the business was continued by Mrs. X. In April 2008, she is refunded Rs.60,000/- by Commercial Tax Department being the excess of Sales Tax by her Husband. Assessing Officer wants to treat the amount as taxable. Decide about the correctness of assessing Officer’s contention.

(0)

(d)

Compute the depreciation available under the Income–tax Act, 1961:

	Plant (Rs.)	Building (Rs.)
Opening WDV Additions (in June) Sales during the year	2,00,000 3,00,000 6,00,000	10,00,000 – 2,00,000

(0)

(a)

Explain the provisions relating to set off and carry forward of speculation business loss.

(0)

(b)

Mr. Y, aged about 67 years, is a practicing as a Cost Accountant. He, submits the following particulars of his Income and investments during the financial year 2008–09;

(i)
(ii)

(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)

Net Income from profession
Income from other sources in bank
interest and interest from ICICI/REC Bonds.
Dividends from companies and income from UTI
NSC accrued interest
Other Interest
Interest from PPF A/c
Deposit in PPF A/c
5–year Time Deposit in SBI
Deposit in Senior Citizen Saving Scheme
Medical insurance Premia: Self
: For father (not dependent on him)

Rs.3,75,000/-

Rs.53,000/-
Rs.5,000/-
Rs.5,000/-
Rs.7,000/-
Rs.25,000/-
Rs.55,000/-
Rs.10,000/-
Rs.50,000/-
Rs.22,000/-
Rs.21,000

Compute his total income for the assessment year 2009–2010.

(0)

(c)

Detail the persons liable to Wealth–tax and those exempt from Wealth–tax.

(0)

SECTION B
Answer Question No. 5 which is COMPULSORY and any two from the rest in this section.

SECTION B

Answer Question No. 5 which is COMPULSORY and any two from the rest in this section.

(a)

State with reasons whether True of False (answer without reasoning will not deserve any credit):

2x4

(i)

No excise duty is payable on electric cars.

(0)

(ii)

Petrol is declared goods under the Central Sales Tax Act, 1956.

(0)

(iii)

If goods are pilfered in port before clearance, customs duty is still payable by the importer.

(0)

(iv)

Exemption from excise duty does not mean automatic exemption from excise registration.

(0)

(b)

Fill up the blanks:

1x6

(i)

Under the Central Sales Tax Act, 1956, when goods are exchanged for another set of good, it will be treated as ............ (barter/sale/deemed sale).

(0)

(ii)

A sale or purchase of goods in deemed to be in the course of import, inter alia, if such sale or purchase .......... the import of such goods.

(0)

(iii)

In order to attract excise duty, goods must be ............ (movable or immovable/immovable/movable).

(0)

(iv)

The most important decision rendered by the Supreme Court in the early stages relating to the definition of “manufacture” is in the case of .............. (Tata Iron & Steel Co. Ltd./Delhi Cloth Mills Ltd./Associated Cement Co. Ltd./Indian Aluminium Co. Ltd.)

(0)

(v)

Sales tax/Vat on declared goods ............. (can/cannot) be levied by the State Government only once.

(0)

(vi)

An EOU is required to execute a .............. (B–7/B–8/B–17) bond.

(0)

Write short notes on any three of the following:

3x6

(a)

Value for excise duty purpose determined when sales are generally through a related person;

(0)

(b)

Mandatory penalty equal to the amount of duty under the Central excise act, 1944 and circumstances such penalty shall be reduced;

(0)

(c)

Use of C, F and H form under Central Sales Tax Act, 1956;

(0)

(d)

Valuation for exports, if value cannot be determined on basis of transaction value.

(0)

(a)

A manufacturer manufactures 1000 Nos. of Product “P”, the assessable value of which is Rs.2,000 per piece. Duty payable is 20%. Duty paid on raw materials is Rs.2,00,000. The manufacturer sells 700 pieces in India and 300 pieces are exported. What is CENVAT credit available and what is the duty payable through PLA?

(0)

(b)

Explain the term “specific duty” and enumerate few items for which specific rates have been prescribed.

(0)

(c)

Examine whether the following are “Inter–sate Sales”

(i)	B comes to Tamilnadu and purchases goods from A. Then, B books the goods from Tamilanadu to Maharashtra in his own name.

(ii)	A in Gujrat enters into an agreement to sell his goods to B in Bihar. A sends the goods from Gujrat to Bihar by booking the goods in the name of B.

3x2=6

(0)

(d)

Explain the term “Identical Goods” under Customs Valuation Rules, 2007.

(0)

(a)

Can mere re–packing or relabelling be treated as “deemed manufacture” for excise Duty purposes? Explain.

(0)

(b)

After availing CENVAT credit on machinery towards payment of duty or final product, Vasudha Wires Ltd., a manufacturer, sold the machinery as scrap. The machinery had been purchased four years back. What is the excise duty liability? Will your answer be different, if the machinery is removed as second hand goods?

(0)

(c)

Briefly explain the provisions of Customs Act, 1982 relating to amendment and substitution of bill of entry.

(0)

Disclaimer ♣ Privacy Policy ♣ Who We Are ♣ Terms of Service