Direct Tax Laws & International Taxation - May 2023

X Ltd. is engaged in the manufacture and sale of textiles goods. Its net profit for the year ending March 31,2023 after debit/ credit of the following items to the profit and loss account was # 1,25,00,000. (i) Advertisement expenditure includes a sum of ¢ 1.60 lakhs paid in cash to sister concern of a director of the company. The Fair market value of such expenditure in the market is 752,000. (ii) Repairs of plant and machinery include # 1.80…

Mr. A, aged 34 years, is a salaried employee with TKM Limited. He has furnished the following details for the previous year 2022-23: Sr. Particulars Amount in No. id 1. | Gross Salary 23,00,000 2. | Business Loss from a new part time business of trading in| — (4,50,000) Mobiles 3. | Short Term Capital Loss on sale of Property (computed) (3,60,000) 4. | Mr. A purchased 1000 Bibcoins, a virtual digital currency on 01.04.2022 for # 1,000 per coin…

(a) (i) A public company has created a charitable trust exclusively for the benefit of the public. The trust has granted interest free loans, inter alia, to some of the company's employees in order to enable their children to pursue higher studies, as per the objects of the trust. The Assessing Officer considers this benefit as being covered under section 13(3) and proposes to withdraw the exemption from tax granted to the trust. Comment upon the correctness or otherwise of…

(a) (i) During the previous year 2022-23, Mr. A purchased scrap of ₹55 lakhs from Mr. B for the purpose of his manufacturing unit. Mr. A also furnished a certificate to Mr. B that the scrap shall be utilized for manufacturing process carried on by Mr. A and shall not be used for trading purposes. Mr. A made the payment of @ 45 lakhs during F.Y 2022-23 to Mr. B. Assume turnover of both Mr. A and Mr. B from…

(a) Answer any two out of the following three sub-parts, viz. (i), (ii) and (iii). Your answer should cover: (a) Issue involved (b) Provisions applicable (c) Analysis and Conclusion (i) M/s Risky Construction Pvt. Ltd. is engaged in the construction of bridges and flyovers. During the previous year 2022-23, it made payment to various parties und deducted tax amounting to 1.60 crores. However, the company failed to deposit the said amount with the income-tax department within the time prescribed under…

(a) (i) Comment whether the following transactions, undertaken during the financial year 2022-23, are required to be reported under the Statement of Financial Transaction or Reportable Account as required u/s 285BA of the Income-tax Act, 1961. Please give your answer alongwith suitable reasons and Category of Reporting Person. (a) Mr. A purchased five bank drafts of ₹3 lakh each from his current A/c with State Bank of India, Jaipur; PAPER - 7 : DIRECT TAX LAWS & INTERNATIONAL TAXATION 29…