Direct Tax Laws & International Taxation - November 2017 MTP

M/s. ABC Corporation, a partnership firm, has earned a gross total income of Rs. 300 lacs for the year ended 31-3-2017. The firm has not undertaken any international transaction or specified domestic transaction during the said year. The above includes a profit of Rs. 220 lacs from an industrial undertaking having a turnover of Rs. 80 crores. This is the fourth year and deduction under section 80-IA of the Income-tax Act, 1961 is available to the extent of Rs. 200…

Ram, Shyam and HUF of Mohan (represented by Mohan) are partners with equal shares in profits and losses of a firm, M/s Popular Tele films, which is engaged in the production of TV serials and telefilms. In the previous year 2015-16, one partner ‘Sunder’ retired, but his dues have been settled in the previous year 2016-17. The earlier partnership deed did not authorise payment of remuneration or interest to partners. The partnership deed was revised by the partners on 1…

Hyper Private Ltd. went into liquidation on 30.06.2016. The company was seized and possessed of the following funds prior to the distribution of assets to the shareholders: Share Capital (issued on 01.04.2012) Reserves prior to 30.6.2016 Excess realization in the course of liquidation Total Rs. 5,00,000 3,00,000 5,00,000 13,00,000 There are 5 shareholders, each of whom received Rs. 2,60,000 from the liquidator in full settlement. The shareholders desire to invest the resultant element of capital gains in long-term specified assets…

(a) Foodie Ltd., engaged in the business of owning, operating and managing hotels, allowed the employees to receive tips from the customers, by virtue of their employment. The tips were also collected directly by the hotel-company from the customers, when payment was made by them through credit cards. The hotelcompany thereafter disbursed the tips to the employees. The Assessing Officer treated the receipt of the tips as income under the head “Salary” in the hands of the various employees and…

(a) Mr. Raj has commenced the business of manufacture of computers on 1.4.2016. He employed 350 new employees during the P.Y.2016-17, the details of whom are as follows No. of employees Date of employment Regular/Casual Total monthly emoluments per employee (Rs.) (i) 75 1.4.2016 Regular 24,000 (ii) 125 1.5.2016 Regular 26,000 (iii) 50 1.8.2016 Casual 25,500 (iv) 100 1.9.2016 Regular 24,000 The regular employees participate in recognized provident fund while the casual employees do not. Compute the deduction, if any…

(a) State whether the information regarding possession of unexplained assets and income received from the Central Bureau of Investigation, a Government agency, can constitute “information” for action under section 132. Discuss. (4 Marks) (b) Swift Inc., a france company has a subsidiary, ABC Ltd. in India. Swift Inc. sells Laptops to ABC Ltd. for resale in India. Swift Inc. also sells Laptops to XYZ Ltd., another Laptop dealer for resale in India. It sells 30,000 Laptops to ABC Ltd. at…

Safe Airways Ltd. sold tickets to the travel agents in India at a minimum fixed commercial price. The agents were permitted to sell the tickets at a higher price but not exceeding the maximum published price. Commission at the rate of 9% of minimum fixed commercial price was deducted under section 194H by the company. The Assessing Officer contended that the liability for tax deduction at source is attracted on the difference between the minimum fixed commercial price and the…