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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
M.Com. DEGREE EXAMINATION – COMMERCE
SECOND SEMESTER – APRIL 2008
CO 2950 – BUSINESS TAXATION
Date : 02-05-08 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
PART – A
Answer ALL questions. Each carries TWO marks. (10×2=20 marks)
- State the Basic conditions to determine the residential status of an Individual.
- Define ‘Duty’ under Customs Act.
- What are the functions of Customs Houses?
- What is the meaning of Zero Rating under VAT?
- The Karta of a HUF goes to a foreign country for the first time on 20th April, 2004. He returns to India on 10th July 2006. During this period, he managed the affairs of the business owned by the HUF from there. Determine the residential status of HUF for the P.Y 2006-07.
- What are the two conditions should be satisfied for the levy duty under central excise?
- Distinguish Professional income from Salary Income.
- Define the term ‘Block of Asset’.
- What is Net Wealth?
- From the following information find out the value of Jewellery as on 31-3-2007:
Value of Jewellery determined by a registered values and accepted by the department as
on 31-3-2006.
Gold 2000gm @ Rs. 900 per gm ———– Rs. 18,00,000
Value of gems and pearls set in ornaments Rs. 2,00,000
on 31-03-2007 the rate of gold is Rs. 950 per gm.
PART – B
Answer any FIVE questions. Each carries EIGHT marks. (5×8=40 marks)
- Explain the Assets exempted from wealth Tax.
- Explain the objectives of VAT.
- What are the different types of Customs Import duties?
- From the following information computer depreciation allowable to XY&Co. for the A.Y. 2007-08.
Assets W.D.V. as on 1-4-2006
Rs.
| a) | Computers …………………………………………. | 1,40,000 |
| b) | Type writers …………………………………………. | 30,000 |
| c) | Furniture & fittings …………………………………………. | 1,00,000 |
| d) | Office building …………………………………………. | 5,00,000 |
| e) | Staff quarters – Area not exceeding 80 sq. metre ……….. | 15,00,000 |
| f) | Sold old office building for Rs.15 lakhs and purchased a new office building for 40 lakhs in Dec. 2006 | |
| g) | Purchased books for professional Purposes | 40,000 |
- How would you treat the following under Wealth Tax Act:
- Ram gifted to his daughter-in-law jewellery worth Rs. 1 lakh in May 1972.
The jewellery is held by her on 31-03-2007 and its value on valuation date is 5 lakhs.
- Shyam gifted to his daughter-in-law jewellery worth Rs.2 lakh in 1999. The jewellery is held by her on 31-3-2007 and its value on the valuation date is Rs. 2,50,000.
- A minor son Shyam of Mr. Krishnan received jewellery worth Rs. 1,00,000 from his maternal uncle as a gift.
- Ganesh formed a trust in 2001 for the benefit of his daughter-in-law. He transferred his urban land valued at Rs. 20 lakhs to the trust? The income from land will be available to the daughter-in-law for her whole life.
- The business income of a firm before charging the following is Rs.2,20,000:
Rs.
- Remuneration to working partners as per deed …….. 1,20,000
- Brought forward business loss ………………………… 1,50,000
- Unabsorbed depreciation ……………………………….. 50,000
- Unabsorbed capital expenditure on Scientific Research 30,000
Compute the total Income of the firm.
- Mr. X is a registered medical practitioner. He keeps his books on cash basis and his summarized cash account for the year ended 31st March 2007 is as under:
Rs. Rs.
| To Balance b/d ………. | 1,22,000 | By cost of medicines | 10,000 |
| To loan for Private Purpose | 3,000 | By Surgical equipment | 8000 |
| To sale of medicines | 25,250 | By motor car | 1,20,000 |
| To consultation fees | 1,55,000 | By car expenses | 6000 |
| To visiting fees | 24,000 | By salaries | 4,600 |
| To interest on Govt.bonds | 4,500 | By rent of dispensary | 1,600 |
| To Rent from property | 3,600 | By General expenses | 300 |
| By personal expenses | 1,11,800 | ||
| By Life insurance premium | 3,000 | ||
| By interest on loan | 300 | ||
| By insurance of property | 200 | ||
| By Balance c/d …………….. | 71,550 | ||
| 3,37,350 | 3,37,350 |
Compute is income from profession taking into account the following
information:
- 1/3 of motor car expenses are in respect of personal use
- Depreciation allowable on motor car and surgical equipment is
15%.
- Define Agricultural Income and Partly Agricultural Income with illustrations.
PART – C
Answer any TWO questions . Each carries TWENTY marks. (2×20=40marks)
- Y Ltd is engaged in the construction of residential flats for the valuation date
31-03-2007 furnishes the following data and requests you to compute taxable wealth and tax payable. Rs. (in lakhs)
| (a). | Land in Urban Area (construction not permitted) | 20 |
| (b). | Motor Cars (in the use of the Company) | 5 |
| (c). | Jewellery (Investment) | 10 |
| (d). | Cash balance (As per books) | 2 |
| (e). | Bank Balance (As per books) | 3 |
| (f). | Guest House 9situated in Rural Area) | 4 |
| (g). | Residential flat occupied by M.D. (Annual remuneration of whom is Rs.6 lakh) | 8 |
| (h). | Residential house let out for 100 days in the year | 7 |
| (i). | Loans obtained: |
For purchase of motor car 2
For purchase of Jewellery 2
The reason for inclusion or exclusion should be stated.
- C Ltd is a company in which public are substantially interested. It should a net profit of Rs. 3,35,000 during 2006-07. Scrutiny of the accounts revealed the following:
Debits to P & L A/C
- Donation paid to approved public charitable trust Rs. 20,000
- Provision for income Tax Rs. 1,00,000
- Family planning expenses Rs. 25,000
- Capital expenditure on family planning Rs. 1,00,000
Credits to P & L A/C
- Bad debts allowed earlier recovered during the year Rs. 10,000
- Interest on Bank deposits Rs. 30,000
- Long term capital gain Rs. 1,00,000
- Dividend from Indian Company Rs. 20,000 (Gross)
There was @ unabsorbed depreciation of Rs. 35,000 and @unabsorbed capital loss of Rs.40,000 brought forward.
Compute the total income of the company for the A.Y. 2007-08.
- Write about the significant changes made in the Duty Drawback Rules of 1995.