University of Mumbai 2005 B.Com Direct and indirect taxation - Question Paper

(vi) Interest received from a foreign company outside India (On capital which is utilized
outside India) Rs. 70,000
(vii) Past untaxed profit of the year 2000-01 brought into India in May, 2003 Rs. 1,10,000
(viii) Royalty received in India from a non-resident in respect of technology used by
such person outside India Rs. 50,000
(ix) Pension from a former employer in India, received in Nepal Rs. 2,30,000

Q.5. ans the subsequent :-

a) obtain out the amount of rebate u/s 88 of the Income Tax, 1961 in the cases provided beneath for the assessment year 2004-05. (4)

Assessee Gross Total Income Tax on Income
(other than LTCG) Investments
(1) Mr. K Rs. 1,40,000 Rs. 15,000 Rs. 59,000 in LIC and Rs. 20,000 in PPF.
(2) Mr. J Rs. 66,000 Rs. 2,200 Rs. 20,000 in Infrastructure Bonds and Rs. 70,000 in PPF.
(3) Mr. L Rs. 1,51,000 Rs. 16,000 Rs. 30,000 in NSC and Rs. 30,000 in Infrastructure Bonds.
(4) Mr. M Rs. 5,50,000 Rs. 1,38,000 Rs. 70,000 in PPF and Rs. 30,000 in Infrastructure Bonds

b) The rate of T.D.S. on payment of interest to a resident other than a company is 12%. Is it correct? provide reasons. (2)

c) Master T is the minor son of Mr. N. HE has earned Rs. 1,00,000 in the previous year 2003-04 from acting in a film. In addition to that he earned Rs. 10,000 as interest from debentures of an Indian company. (Debentures were gifted to him by his mother). Who is liable to pay tax on the above incomes? (2)

d) Mrs. X is employed with A Ltd., where her husband Mr. X and his brother are holding 15% shares each, whether the clubbing provision u/s. 64(1)(ii) will be attracted? discuss. (2)

e) Mr. R transferred Rs. 3,00,000 to his spouse Mrs. R out of love and attraction. She earns interest on it of Rs. 30,000. In whose hands Rs. 30,000 is taxable? Why?

f) Enumerate any 4 payments to which TDS provisions are applicable. (4)

Q.6. a) describe and discuss as per Income Tax Act, 1961 (any two) : (1) Person, (2) Assessee, (3) Previous Year. (8)

b) What is ‘Capital Asset’ as per Income Tax Act, 1961? Whether the subsequent are capital Assets within the definition of sec. two (14) : (8)

(i) Goodwill of a business (v) Vacant Land
(ii) A House for personal use (vi) Jewelry
(iii) Personal Scooter (vii) Shares of AB Ltd.
(iv) Utensils (viii) Debentures of XY Ltd.

part II

Q.7. a) describe and discuss the term "Business" as per the provisions of the Central Sales Tax Act, 1956. (4)

b) State, giving reasons, whether the subsequent activities are business activities or not as per Central Sales Tax Act, 1956 : (6)
(i) Sales of Machines by a Machinery Manufacturer
(ii) Purchase of a house for personal use
(iii) Sale of scrap

OR

discuss in details the Provisions of C.S.T. Act, 1956 regarding sale or purchase in the course of Import or Export u/s 5. (10)

Q.8. describe and discuss the subsequent terms under B.S.T. Act, 1959. (Any two) : (a) Goods, (b) Business, (c) Purchase Price (10)
OR
discuss when does a dealer become liable to pay sales tax under Bombay Sales Tax Act, 1959. (10)

Q.9. From the subsequent Purchase and Sales Register of A and Co. obtain out from when is the Co. liable for registration, under B.S.T. Act, 1959.

Purchase Register
Date Inv. No. Name of Party Place Amount (Rs.) Remarks
1-1-04 101 Shetty, N. M. Mumbai 50,000 Machinery Purchase – Taxable
3-1-04 201 V. N. Kamat Nasik 5,000 Raw Materials – Taxable
8-1-04 301 A. N. Reddy Ratnagiri 30,000 Raw Materials – Taxfree
11-1-04 401 V. T. Shetti Vashi 40,000 Raw Materials – Taxable
15-1-04 501 H. N. Maniar Mumbai 9,000 Labour Charges
25-1-04 601 G. N. Ravi Valsad 7,000 Raw Materials – Taxable
Sales Register
Date Inv. No. Name of Party Amount (Rs.) Remarks
8-1-04 01 Sneha T. 15,000 Taxable
13-1-04 02 Vicky 20,000 Taxfree
22-1-04 03 Avinash 60,000 Taxable
24-1-04 04 Genu 30,000 Taxable
28-1-04 05 Anna 10,000 Labour Charges
30-1-04 06 Aparna 30,000 Taxable

Taxable goods are manufactured within the factory and delivered on the date of production. (10)

OR

Q.9. M/s. Patel & Co. provides you with the subsequent info regarding Sales Tax Liability for the month of January, 04. (10)

Particulars Rs.
Sale of Schedule "A" goods 33,00,000
­Sale of Schedule "B" goods 18,00,000
Sale of Schedule "B" goods @ 8%
(inclusive of Sales Tax Surcharge and Turnover Tax) 21,96,000
Sale of Schedule "c" goods @ 13%(exclusive of taxes) 36,00,000
Cost of Installation 4,00,000
Labour charges recovered 8,00,000
Sale against Form 14 1,00,000
OMS Sales 6,40,000
Sales Return of Schedule ‘A’ Goods 3,00,000
Sales Return of Schedule ‘B’ Goods 5,00,000
Sale Return against Form 14 (including previous month) 2,00,000

The Company is also liable to Pay Purchase Tax of Rs. 1,02,000. They are also entitled to set-off of Rs 2,70,000. They are also liable for Surcharge and Turnover Tax.

Earning:   Approval pending.