RADHARAMAN ENGINEERING COLLEGE MBA-3rd SEM (PUT- 2011) CORPORATE TAXATION Code- FSF 04 Time:- 2 hours Maximum Marks:-

40 SECTION- A NOTE - Attempt any four questions. All questions carries four marks Q1) Explain the term amalgamation and tax liabilities of amalgamated companies. Q2) Discuss the provision of Income Tax Law to set off capital gains. Q3) Discuss the provisions relating to dividend tax. Q4) What are the tax consideration while capitalizing profit by issues of bonus shares? Q5) Distinguish between tax planning and tax management. Q6) Define the company in which public is substantially interested. Q7) Comment on the Tax Planning to capital structure decision. SECTION - B NOTE - Attempt any three questions. All questions carries eight marks. Q1) What shall be the tax considerations of a promoter of a new company on the following: (a) Location (b) Capital (c) buying or leasing a heavy machinery. Q2) Write about various precautions, need and limitations of Tax Planning. Q3) What are the factors to be considered while making a lease or buy decision? When a leasing be preferred over purchase? Q4) A domestic company in which public are substantially interested submits the ahead particular of its income of the P.Y. ending 31st march,2009:(i) profit of business after deduction of donation to approved Charitable Institution Rs. 1,90,000. (ii) Donation to Charitable Institution Rs. 30,000 (iii) Interest on Govt. Securities Rs. 10,000 (iv) Dividend from a domestic Company (Gross) Rs. 60,000 (v) Long term capital gain Rs. 50,000 (vi) Book profit u/s 115-JB Rs. 12,00,000 During the financial year the company deposited Rs. 15,000 in Industrial Development Bank of India. The company distributed a dividend of Rs. 1,00,000. Q5) What types (any two) of exemptions are provided to exporters under IT Act? Explain the provisions in detail?

MILLENNIUM INSTITUTES OF TECHNOLOGY AND SCIENCE MBA-3rd SEM (MID - SEM 2010) CORPORATE TAXATION SECTION- A NOTE - Attempt any four questions. All questions carries eight marks Q1) Explain the residential status of a company. Q2) What is the meaning of company under Income tax act. Q3) Discuss the provision of Income tax act relating to set-off and carry forword of losses with relation to companies. Q4) Write about "Computation of Tax liability of Companies". Q5) Write about "Tax considerations in respect of Make or Buy decisions. Q6) Write short note on (i) Tax evasion (ii) Tax avoidance.

SECTION - B NOTE - Attempt any three questions. All questions carries sixteen marks. Q1) Explain the concept and scope of Tax Management. Q2) Write about various precautions, need and limitations of Tax Planning. Q3) What is MAT ? Describe the deductions for computing MAT ? What is the impact of tax liability on Book profits? Q4) Mr. Ramanlal Nagar has purchased a residential flat in a multystoried building on 1st April, 1998 in Mumbai. The flat is being used for his residence, its fair rent is Rs. 15,000 per month, its municipal tax is Rs. 12,000 and interest on loan Rs. 82,000 per annum. On 1st April 2007 he purchased an another some flat in the building and for the financing he has taken a loan amounting to Rs. seven lakh @ 15% per annum. Interest will due Rs. 90,000 for the financial year. Its municipal tax dedermined Rs. 15000. You are required to advice that Income tax point of view which flat should be use for self residence and which letout ? A company is ready to take a flat on Rs. 15000 monthly rent for its manager residence. His other taxable income is Rs. 1,50,000. Q5) SABU Ltd. wants to acquire an automatic machine costing Rs. 12,00,000 for its manufacturing division and is considering the following two options : Option 1 To buy the machine by taking a loan of Rs. 12 lakhs repayable in 6 instalment of Rs. 2,00,000 each together with interest @ 15% per annum. Option 2 To take it on lease for 6 years at an annual lease rent of Rs. 3,00,000 payable at each year end. The lessor will charge 1% of cost of machine as file charges payable alongwith the lease rent of 1st year Other Information : i. Tax rate applicable to company 30% ii. After tax cost of capital 14% iii. Rate of depreciation applicable to machine 25% on W.D.V. basis

iv.

Present value Factor for Re. 1 @ 14% Year I .877 Year II .770 Year III .675 Year IV .592 Year V .519 Year VI .456

At the end of

Suggest which option company should accept ?