Direct Tax Laws & International Taxation - November 2018 MTP

(a) Penta Ltd., a domestic company, provides the following information of its Statement of Profit and Loss for the year ended on 31/03/2018. It earned profit of Rs. 15 lakhs after debiting/crediting of the below items: Items debited to Statement of Profit and Loss: No. Particulars Rs. 1. | Provision for the loss of subsidiary 70,000 2. | Provision for doubtful debts 75,000 3. | Provision for income-tax 1,05,000 4. | Provision for gratuity based on actuarial valuation 2,00,000 5.…

2. (a) Compute the total income of M/s. LMN, a firm, consisting of three partners namely, Lalit, Mohit and Gagan for the assessment year 2018-19 from the following information. Lalit, Mohit and Gagan were partners in their individual capacity. (i) The firm carried on the business of purchase and sale of refrigerators in wholesale and manufacture and sale of footballs under a deed of partnership executed on 1.4.2010. The deed of partnership provided for payment of salary amounting to Rs.…

(i) Petal Limited, engaged in the business of manufacturing of mobile accessories also effected the sales and purchase of shares of other companies. It suffered loss from such transactions: (1) Whether such company can set off its losses from share trading from the profit of manufacturing business? (2) If principal business of such company is sale and purchase of shares of other company, then, what would be your answer? (4 Marks) (ii) Mr. Rahim sold his residential house in Chennai…

(P) Ltd., an Indian company established in the year 2010, reports total income of Rs. 15 lakh for the previous year ended 31s March, 2018. Tax deducted at source by different payers amounted to Rs. 1,35,600 and tax paid in foreign country on a doubly taxed income amounted to Rs. 22,000 for which the company is entitled to relief under section 90 as per the double taxation avoidance agreement. During the year, the company paid advance tax as under: Date…

Cash of Rs. 51 lacs was seized on 12.9.2017 in a search conducted as per section 132 of the Act. The assessee moved an application on 27.10.2017 to release such cash after explaining the sources thereof, which was turned down by the department (not satisfied with the explanation given by the assessee). Can the department withhold the explained money? Examine. (4 Marks) (ii) An assessee had credited a sum of Rs. 80,000 in cash in the account of Manan, said…

(a) (i) “Proceedings cannot be initiated under the Act, unless a proper notice to this effect has been served upon.” In this context answer: (l) What are the prescribed modes of service of such notice? (II) On whom should the notice be addressed and served upon in the cases where the assessee is a - dissolved firm - partitioned HUF. (5 Marks) OR (i) In respect of the taxes due from a private limited company, which could not be recovered…

(i) Penta Ltd., a domestic company, provides the following information of its Statement of Profit and Loss for the year ended on 31/03/2018. It earned profit of Rs. 15 lakhs after debiting/crediting of the below items: Items debited to Statement of Profit and Loss: No. Particulars Rs.