University of Delhi 2010-2nd Year M.Com Commerce CORPORATE TAX PLANNING UNIVERSITY - exam paper
This question paper contains 16 printed pages]
Your Roll No 3TTW aJsFHleh
6486
M.ComII J
Course 448CORPORATE TAX PLANNING (Admissions of 2004 and onwards)
Time 3 Hours - Maximu?n Marks 75
W? : 3 : 75
(Write your Roll No on the top immediately on receipt of this question paper )
Note The maximum marks printed on the question paper are applicable for the candidates registered with the School of Open Learning These marks will, however, be scaled down proportionately m respect of the students of regular colleges, at the time of posting of awards for compilation of, result -cr ctffer Tjqfo sqfaj
-qftOTr ffaR
Note Answers may be written either in English or in Hindi, but the same medium should be used throughout the paper
3 3rTft FT TTcfT # #71
I
A// questions are compulsory All questions carry equal marks 3FR zjp&ri f I wit <*qF TRH |l
( 2 ) 6486
1 (a) A company requires 1,00,000 units of a component every year for next 5 years The component can either be manufactured by the company in its factory or be purchased from the market From the following information suggest to the company whether it should make the component or buy it from the market
(i) Material cost per unit Rs 20,
(w) Labour cost per unit Rs 30,
(iii) Variable overhead cost per unit Rs 10,
(w) If the company manufactures the part, it has to purchase the machine by taking a loan from the bank The present value of
net cash out flow in this regard in 5 years will be Rs 1,00,000
The component is available in one of the market at Rs 62 5 and at Rs 70 in the other one 7
(i>), Differentiate between Tax Planning, Tax
r
Management1 and Tax Evasion 8
cpf cfft 1,00,000 STTSPTOkTT
M fmW tfSFcft %, RR
wfc ti rt sttor
fF3TR
Tl%TT :
(i) yfcT TTFRTt WTcT 20 *
(it) TFfiT STR "elHId 30
(w) faPmfai I, cTt
fe wMt '-qM i
R*I 3 5 f cW>M(*
fcfRPT TJeT 1,00,000 * #TTI
"5f TTr RR 62 5 ? 3 cTn fRK
3 70 3 'Zm&l tl
(-&) 37RFTl\ 4eR aftr '-
Or
From the following information compute the tax t
payable by Z & Co keeping in view the provisions of MAT u/s 115 JB for the AY 2009-10 Profit and Loss Account
Rs Rs
Expenditure related to Export sales
export sales 7,00,000 u/s 10A 10,00,000
Exp Related to other Other sales 20,00,000
sales 16,00,000 LTCG [exempt
Security transaction tax , u/s 10(38)3 2,00,000
paid relating to LTCG 5,000 Interest on govern-Fnnge benefit tax paid 20,000 ment security 25,000
Depreciation 1,50,000
Proposed dividend 2,50,000 Income tax 1,00,000
Net profit 4,00,000
32,25,000 32,25,000
(a) The company revalued its assets from Rs 3,00,000 to Rs 6,00,000 @ 25% The depreciation allowable under the Income Tax Act, is Rs 80,000
(b) B/F loss of business as per books of account Rs 2,00,000
(c) B/F depreciation as per books of account Rs 50,000
(rf) B/F unabsorbed depreciation Rs 1,00,000
The company received export turnover u/s 10A
Rs 10,00,000 m India in convertible foreign exchange
within prescribed time 15
PiRfelfecI RT ctf 2009-10 mi
115 JB SftFfa fTcTM 3TT# (MAT) WIR p; W% IRT T
SR TT SjfeeR cfflfTTT :
faqfa frot $ TO lOA- oT?FR
oSR 7,00,000 - 10,00,000
fasfit TTO 3RT "feit ' 20,00,000
16,00,000 TTT 10(38)
LTCG ritrjfcT SRFfa LTCG 2,00,000
grT Sfrft 20,000 XR 25,000
1,50,000
TOTTER BTTOT 2,50,000
( 1,00,000 *|os. eim 4,00,000
32,25,000 32,25,000
(5FT) obunl 3 25% tr s-Fpft qfnrfw bt
3.00.000 6,00,000 $mi t 3?Pm 3#m 3TcT7fa 5fcbl4 80,000 tl
(H) TsTTTT} STTTC 3T7IT'TtcT TTR-Tfa
2.00.000 11
0*T) 3pp* 3TUFft?f 50,000 tl
() 3TTIT%T SRTOtfaeT 1,00,000 tl
fffor w 3t uhRcIcHVm T?ft gsfi 3 TKcT 10,00,000 T TO 10A 3TcFfa McT SFTcTcfa W toll
Explain the provision of section 79 for carry forward and set off of losses in the cases of certain companies 15
Or
Bose Ltd , a foreign company, enters into an
agreement with Sony India Ltd, an Indian company
The agreement relates to a matter included in the
industrial policy of the Central Government and is
in accordance with the policy During the year
31/03/2G09 the royalty of Rs 50,00,000 is paid by
Sony India Ltd , to Bose Ltd Bose Ltd has spent
Rs 12,00,000 on expenses convered u/s 28 to 44C
Compute the tax payable by Bose Ltd , assuming
() Sony India pays the Income tax payable by Bose Ltd , as per the terms of the agreement entered into on 31/7/2000
() The agreement did not provide that*Sony India Ltd , will bear the tax, but it was mutually agreed between the parties that royalty of Rs 50,00,000 will be paid net of taxes
(c) The agreement was entered into on 5/6/2002 and Sony India Ltd pays the income tax payable by Bose Ltd
(<d) Agreement was entered into on 5/6/2002 but royalty was paid after deducting tax from royalty of Rs 50,00,000
(e) Agreement was entered into on 5/6/2005 but
\
royalty was paid after deducting tax from royalty of Rs 50,00,000 15
ttcf fa TOta
c?rr ofR# fl TR
3 fwr 3
t 3TR frfh SFpiR %| erf 31/3/2009 <?RH Hsl fT jjJTT fT <Tl TPTst
50,00,000 7?. tl fa % TO 48 44C TRF
rqifw RT -tR 12,00,000 fell fa IRT "3R flfTTT I TH cfHTTT :
() #Tt TI 31/7/2000 %TT tjtt s*rr 3T5TR %FT fa RT 'SFR TcTH tl
(IsO m 'SfFft 5\k<A\ %
fh fe qsri tttfr:
sft 50,00,000 ? T TRTet =R tuft\
(*T) TCR 5/6/2002 fen TT ?n 3?R #ft tfTT fa #3 fa SRT 7 3TRm 7 fTcTR tl
(T) tfrin 5/6/2002 fen W TT
50.00.000 tft 3 tfet 1 IcTH fen TRTT TT I
() TTT 5/6/2005 rf fen TOT TT ferj,
50.00.000? tfat
Bharat Ltd a company engaged in manufacturing of electncal switches is a widely held company It is considering a major expansion of its production facility and import of latest technology which is expected to improve its profitability from the present
rate of 20% to at Jeast 25% The finance manager
has given the following proposals
(Rs in Lakhs)
|
A |
B |
c |
D | |
|
Share Capital (equity) |
40 |
20 |
30 |
50 |
|
14% Preference shares |
20 |
20 |
10 | |
|
16% non-convertible | ||||
|
debentures |
20 |
40 | ||
|
Term loans from institutions and banks @ 20% |
_ |
40 |
70 |
_- |
|
Lease finance @ 22% |
40 | |||
|
Total |
100 |
100 |
100 |
100 |
1 The rate equity dividend has not been below
i
i
24% m the past
The tax rate faced by the company is 30 9%
Your opinion with the detailed reasons is sought on the above 15
faPiHWl Teft RcT
% o4|4chd* %l
tfst ta A yldlPichl frqfa
fq-K Tt %l cTTlRdl 20%
c 25% T 11
|
A |
B |
c |
D | |
|
fm ($fad<ft) |
40 |
20 |
30 |
50 |
|
14% STfFrR |
20 |
20 |
10 | |
|
16% hRcIhIaJ u|q |
20 |
40 | ||
|
20% | ||||
|
srfa r iui |
40 |
70 | ||
|
Hd<if 'frT 22% |
40 |
T~ | ||
|
"fed |
100 |
100 |
100 |
100 |
CTTWT 24%
Tccpft S[RT =R ft 30 9% 11
cf fe<pT TTwf Tf%cT STTWt IF3 STTcT tl
Or
Explain the special provisions in respect of newly established units m Special Economic Zones (SEZ) and free trade zone 15
STTfsfo $CX\ TNTT cifad
Discuss the tax provisions with respect to dividend policy and issue of bonus shares under the Income Tax Act, 1961 15
srmrs srfalwt, 1961 arnfcT errors frfrr afo ftrfa T-'3T7f TI faeN'l
Wti
Or
Briefly explain the provisions of avoidance of double taxation agreements under the Income Tax Act,
1961 15
1961 fcf TRi
c& 3 Fne
Explain any three of the following , 5x3
5
(a) Demerger, - . *
((b) Slump Sale,
(c) Tax planning for business of computer software,
*
id) Bilateral and Unilateral relief
3T1%5HT;
16 600
|
Attachment: |
| Earning: Approval pending. |
