S.R.S P.G Centre (Affiliated to Tumkur University) Baddihalli, Gokula Extension 3rd semester M.

Com (Test) Corporate Taxes and Planning Marks: 50 SECTION-A Answer any five of the following: 1. 2. 3. 4. 5. 6. Define indian company [sec2 (26)] Who is an assessing officer? Who is deemed to be an assessee in default [sec.2 (7c)]? What is tax evasion? Write the meaning of the term advance ruling What is block of asset [section 2(11)]? SECTION-B Answer any two of the following (5x2=10) (2x5=10)

7. Distinguish between Tax Planning and Tax Evasion. 8. The WDV of plant and machinery on 1.4.2012 of Z Ltd. engaged in manufacturing of PVC granules is ` 2000 lacs. Company purchased additional plant and machinery for ` 1,600 lacs on 18.4.2012 inclusive of second-hand machine imported from Ireland of ` 400 lacs to increase its installed capacity of production from 1000 TPA to 1500 TPA. The production from new machine commenced w.e.f 1.12.2012. Work out by giving reasons the amount of allowable depreciation. 9. Write the scope and importance of tax planning.

SECTION-C Answer any two of the following (15x2=30)

10. Write the provisions of advance tax rulings. 11. Explain the expenses expressively allowed as deduction [ u/s 30 to 37 ]

12. D Ltd., a closely-held Indian company, is engaged in the business of manufacture of garments. The following information for the financial year 2012-13 is given: Particulars Rs Sale proceeds of goods (domestic sale) 25,00,000 Sale proceeds of goods (export sale) 7,00,000 Amount withdrawn from general reserve (reserve was created in 1997-98 by debiting P&L A/c) 2,00,000 Amount withdrawn from revaluation reserve 1,50,000 Total 35,50,000 Less : Expenses Depreciation (normal) 6,16,000 Depreciation (extra depreciation because of revaluation) 2,70,000 Salary and wages 2,10,000 Wealth tax 10,000 Income-tax 3,50,000 Outstanding customs duty (not paid as yet) 17,500 Proposed dividend 60,000 Consultation fees paid to tax expert 21,000 Other expenses 1,39,000 Net Profit 18,56,500 For tax purposes the company wants to claim the following : Deduction under section 80-IB (30 per cent of Rs. 4,14,000). Depreciation under section 32 (Rs. 5,36,000) The company wats to set off the following losses/allowances: For tax purposes For accounting purposes Brought forward loss of 2005-06 Unbsorbed depreciation 14,80,000 -------4,00,000 70,000

Compute the net income and tax liability of D Ltd. for the assessment year 2013-14 assuming that D Ltd. has a long-term capital gain of `Rs. 60,000 under provision (i) to section 54D(2) which is not credited in profit and loss account. *****