NMIMS University 2005 Diploma Business Administration Corporate Taxation (Direct & Indirect) - Question Paper

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES [DEEMED UNIVERSITY]
DISTANCE LEARNING PROGRAMME
MUMBAI 400 056

DBM/DHRM/DFM/DMM
PGDBM/PGDHRM/PGDFM/PGDMM (FIRST YEAR)
CORPORATE DIRECT TAXES


Date: 21-12-2005. Time: 2.00 to 5.00 p.m. (3 Hours)
ans any 4 of the 5 ques.
every ques. carries equal marks. Total Marks (50).
State ques. Numbers clearly in left margin
Total pages in this ques. Paper = two (two)

1. Is it necessary for governments to collect taxes? What is role of taxation in fiscal policy?

2. You are the Income Tax Officer assessing the Income Tax Returns of Gadbad Limited. On scrutiny of the records, you come across the following:

- An equipment purchased for Rs. two lakhs has been debited to the P&L Account as Purchases.

- A machine has been comprehensively overhauled, involving an expenditure of Rs.5 lakhs. The overhaul increases the capacity by 20% and enhances the asset life by five years. The overhauling costs have been debited to repairs and maintenance.

- Loans have been received to the extent of Rs.15 lakhs. It is suspected that these amounts are unaccounted sales, disguised as disguised. Your suspicions are confirmed when the lender are untraceable and no TDS of interest payments are recorded.

- Closing inventories have been valued at Rs. 12 lakhs as at 31.3.2005. The stock statements submitted to the banks total to a value of Rs. 15 lakhs.

- Interest cost includes interest of Rs.1 lakh paid to a bank on behalf of a group company that has a weak financial position.

discuss the tax treatment in respect of every of the above, giving sound reasons.


3. discuss the features of International Taxation and Tax Treaties.

4. discuss the salient features of Short Term and Long Term Capital Gains. provide illustrations to support your explanation.

5. Write a note to your top management on (a) Tax benefits of infrastructure projects u/s 80IA and (b) Special Economic Zones

Earning:   Approval pending.