LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
M.Com. DEGREE EXAMINATION – COMMERCE
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SECOND SEMESTER – April 2009
CO 2953 / CO 2950 – BUSINESS TAXATION
Date & Time: 29/04/2009 / 1:00 – 4:00 Dept. No. Max. : 100 Marks
SECTION – A
Answer ALL questions: ( 10 x 2 = 20 )
- Mention the rate of tax in which the income of firm is taxed.
- What do you mean by Minimum Alternative Tax with respect Company assessment?
- Why Valuation date is important with regard to Wealth Tax Act?
- What are the bases of levy of Central Excise Duty?
- What do you understand by ‘remission of duty is available under the Central Excise Duty?
- Highlight the objectives of Customs Act?
- Indicate the arguments in favour of VAT.
- (a) On 30th May 2007, Mr. B, a Malaysian citizen leaves India after a period of 2 years stay. Determine
Mr. B’s residential status for the assessment 2008-09.
(b) Will your answer show any change if he leaves India on 29th May 2007.
- Mr. L obtained a loan of Rs.5 lakhs on 31st July 2004 from his friend by mortgaging his house property.
The loan was utilized for the purchase of shares and securities. Can the amount of unpaid loan of Rs.2
lakhs on 31st March 2008 be claimed as a deduction under section 2(m) of the Wealth Tax Act? Support
your answer with relevant provision.
- Calculate the assessable value for the purpose of levy of excise duty from the following
particulars :
Cum-duty selling price inclusive of sales tax @ 4% Rs.75,320
Rate of excise duty applicable to the Product 17%
Trade discount allowed Rs.2,500
Freight (to be charged extra) Rs.3,000
SECTION – B
Answer any five questions: ( 5 x 8 = 40 )
- Explain the bases for charge of Income .
- Enumerate the ‘assets’ identified by the Wealth Tax under section 2(ea).
- What is CENVAT? What are its features?
- Mention any ten circumstances under which the central government may absolutely prohibit import
or export of goods.
- Explain the provisions relating to registration and the related exemption under the Central Excise.
- From the following calculate the depreciation admissible for the asst. year 2008-09
(a) Factory building – WDV Rs.5,00,000
(b) Plant and Machinery – WDV Rs.8,00,000
Addition: 30-6-2007 Rs.1,00,000
31-12-2007 Rs.1,00,000
Sale : 1-12-2007 Rs.6,00,000
(c) Furniture & Fixture – WDV Rs.1,00,000
- A, B and C are in a firm sharing profits in ratio of 2:1:1 respectively. The profit of the firm for the
previous year ending 31-3-2008 amounted to Rs.16,000 which has been arrived at after given the
following deductions:
- interest paid to A – Rs.4,000
- Salary paid to B – Rs.6,000
- Paid shop rent to C – Rs.3,000
- Paid commission to A – Rs.1,500
- Paid Rs.5,000 as donation to National Children Fund
Compute admissible remuneration.
- Mr. Jay has the following assets and liabilities on the valuation date:
(Rs. in Lacs)
- Residential house 40.0
- A farm house – 15 km away from the local limits of Kerala 10.0
- Cars for personal use 6.0
- Jewellory 14.0
- Aircraft for personal use 150.0
- Urban land (construction is not permitted under the law) 10.0
- Cash in hand 1.5
- Shops given on rent 20.0
- Gold Deposit Bonds 10.0
- Loan taken to purchase the aircraft 50.0
Compute the Net wealth of Mr. Jay.
SECTION – C
Answer any TWO questions: ( 2 x 20 = 40 )
- What is the law relating to valuation of excisable goods for the purpose of charging excise duty?
- Following are the incomes of a domestic company for the year ending on 31st March, 2008:
- i) Business profit 4,20,000;
- ii) Dividend from an Indian public sector company 10,000;
iii) Dividend from an Indian company whose
80% income is agricultural income Rs. 9,000;
- iv) Income from Unit Trust of india 5,000;
- v) Royalty received from a foreign concern
for providing technical knowledge Rs. 16,000;
- vi) Fee from an Indian company for technical advice 12,000;
vii) Dividend from a foreign company Rs. 8,000;
viii) Company has donated to an approved fund Rs. 8,800
Compute the total income of the company for the assessment year. Find the tax liability, if the book profit of the company is Rs.11,80,000 u/s 115 JB. The company has distributed 12% on its paid up capital of Rs.5 lakh on 1st September 2008, before filing of its return of income.
- X Ltd., is a company carrying on business in the construction and sale of residential flats. It furnishes the following data and requests you to compile wealth tax return and determine the tax payable for the Assessment Year 2008-09:
Market value Rs.
| (a) | Land in Rural area | 15,00,000 |
| (b) | Land in Urban area (construction not permitted as per municipal laws) | 23,00,000 |
| (c) | Land in Urban area (held as stock-in-trade since 2005, construction will be commenced during June, 2008) | 49,50,000 |
| (d) | Motor cars (not being held as stock-in-trade) | 11,30,000 |
| (e) | Jewellery (not being held as stock-in-trade) | 18,00,000 |
| (f) | Aircraft | 1,58,00,000 |
| (g) | Bank Balance | 3,10,000 |
| (h) | Cash in hand as per cash book | 1,70,000 |
| (i) | Guest house and land appurtenant | 8,00,000 |
| (j) | Residential Flats of identical size provided to 6 employees for their use (salary of one of them exceeds Rs.5,00,000) | 15,00,000 |
| (k) | Residence provided to Managing Director (salary exceeds Rs.5,00,000) | 10,00,000 |
| (l) | Flats constructed and remaining unsold (not being held as stock-in-trade) | 30,00,000 |
| (m) | Residence provided to a whole time director (Salary Rs.7,20,000 the director owns 25% equity shares) | 17,00,000 |
The company has taken a loan of Rs.6,00,000, Rs.7,00,000 and Rs.50,000 for acquiring property numbers (a), (c) and (l) respectively. Find out the wealth tax liability of the company for the A.Y. 2008-09.