Direct Tax Laws & International Taxation - November 2016 MTP

Ltd. is engaged in the business of manufacturing plastic bottles. Its Profit & Loss account shows a net profit of Rs.60 lakhs for the year ended 31 st March 2016, after debiting/crediting the following items: (i) Rs.10,000 &Rs.15,000 paid in cash on 19.11.2015 by two separate vouchers to a contractor who carried out certain repair work in the office premises. (ii) One time license fee of Rs.10 lakh paid to a foreign company for obtaining franchise on 1stAugust 2015. (iii)…

(a) Mr. Mahesh, an individual resident in India aged 48 years, furnishes you the following particulars of income earned in India, Foreign Countries " Y" and "Z" for the previous year 2015-16. Compute the total income and tax payable by Mr. Mahesh in India for A.Y. 2016-17 assuming that India has not entered into double taxation avoidance agreement with countries Y&Z. Particulars Indian Income: Income from business carried on in Delhi Interest on savings bank with Dena Bank Income earned…

(a) Mr. Kartik sold his residential house in Chennai and purchased two residential flats adjacent to each other on the same day vide two separate registered sale deeds from two different persons. The builder had certified that he had effected necessary modification to make it one residential apartment. Mr. Kartik sought exemption under section 54 in respect of the investment made in purchase of the two residential flats. The Assessing Officer, however, gave exemption under section 54 to the extent…

(a) Sunflower Ltd. set up a manufacturing unit in Vaishali district of Bihar on 1st April, 2015. The company invested Rs. 20 crore in acquisition of new plant and machinery on 3rd May, 2015 and another Rs.20 crore in acquisition of plant and machinery on 21st December, 2015, out of which Rs.10 crore was second hand plant and machinery. The new plant and machinery were installed and put to use from the date of acquisition. You are required to calculate…

(a) Discuss, with the aid of decided case laws, the correctness or otherwise of the following statements – (i) The Appellate Tribunal has the power to re-appreciate the correctness of its earlier decision under section 254(2); (ii) An assessee can make a fresh claim (i.e., a claim not made in the return of income) before an appellate authority only by filing a revised return of income; (6 Marks) (b) PMT Ltd., engaged in the specified business of setting up and…

(a) For facilitating expeditious resolution of disputes relating to international transactions involving transfer pricing and foreign companies, the Income -tax Act, 1961, has provided for "alternate dispute resolution mechanism". In this context, you are required to answer the following: (i) What meanings have been assigned to "dispute resolution panel” and the "eligible assessee" under this mechanism? (ii) When can a grievance for resolution be filed by an assessee? (iii) What evidences are being considered by the panel to redress the…