hey ghanshyam  u had  blocked the  frd  req  and  messages  need few clarification if u can 

how much marks would be deducted as i have taken 20000 for non resident father u/s 80d?????

i havent visited this thread today but there are a lot of differing answers to the paper .., as an initiative i d like to give my answers to a few questions to put the answers in perspective. This is my personal opinion of what the answers should be and if i am wrong, pls correct the same ....

Q.1(A)

Slump Sale:

The answer is

(385-(40+90+110+35-90)) =  200 lacs.

Note:

1. Revaluation of Fixed Assets to be ignored
2. Value as per section 43(6) to be considered
3. Non-depreciable assets to be taken at book value
4. The above value of 200 lacs is LTCG and will be taxed at 20% plus surcharge and education cess = 44.29 lacs
5. No indexation for slump sale

Tax Advice:

Suggestion 1:

May resort to demerger, transfer in a scheme of demerger is not a transfer, however since company holds only 74% it must incur cash outflow to acquire atleast 1% extra shareholding to effect demerger

Suggestion 2:

Increasing the holding incurring cash outflow to acquire 100% shareholding, will result in holding and subsidiary relationship thus will not be considered a transfer.

Q.1(B)

Assets retained pursuant to an order under section 37A(5A) will be dealt with for adjustment towards

1. Amount of tax payable on net wealth
2. Amount of interest and penalty imposable, if any as if considered as a regular assessment
3. Any liability on account of assessment or reassessment for which any net wealth is liable to tax
4. Any other existing liability to be satisfied by the assessee under the act as an assessee in default

Q.1C

Valuation officer cannot enforce attendance to take evidence on oath. the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections. Thus the option is with the assessee and it does not amount to enforcement.

Q.1D

First – Mrs.W

Marriage does not subsist – Mr.W

Q.2C

Please refer section 47(xiiib) – The six conditions are more than sufficient for the answer, I presume each condition would be allotted one mark.

Q.3A

The option of choosing both exemption under section 10(10C) and relief under section 89 is not possible. They are mutually exclusive thus only one can be chosen.

Q.3B

Section 2(15) has been amended.

If main object is preservation of wildlife – Utilization of income is exempt irrespective of the amount

If main object is advancement of object of general public utility – Utilization of income is exempt to the extent income from such activity does not exceed Rs.10 lacs

Q.3C

Conditions:

1. Must distribute to political parties minimum of 95% of aggregate donations received during the year plus brought forward surplus
2. Register under the Representation of the People Act
3. Function in accordance with the rules made by the Central Government

Yes benefit available in respect of  all income provided distribution is a minimum of 95% else entire income is taxable.

Q.3E

Perquisite = Fair market value on the date of exercising option (based on highest volume of trade is shares are quoted in more than one exchange) – Money paid by the employee

= 500 shares x (6500-250) = Rs.31.25 lacs

Above value will not be affected for providing technical know-how.

Q.5A

Power Subsidy – Subsidy given for adjustment against eb bills for operation of business. Revenue in nature and deductible

Donations –  Case law of Dr. K. George Thomas vs. CIT (SC)

Assessee was practicing against atheism & engaged in the movement for spread of religion. In this course, he received donations from his friends for the same course. The funds were taxed as Income from vocation (since nexus between receipt and vocation) can be clearly established)

Profits in share business – Though it is income from speculative business, it is still considered under the overall head of “Income from Business or Profession”

Interest received by contractor – Taxable as Other Income

Margin Money forfeited – Taxable as Business Income

Depreciation – Allowable , Concept of beneficial ownership – A Sivakami and Others (2010)

Q.5B

Y carries on the same business as X, hence vacant land is stock-in-trade for Y Ltd.

Stock-in-trade not a capital asset, hence Y Ltd not liable to capital gain, same is to be considered as business income of Rs.25 lacs (160-25-110)

Note: Tax implications of X Ltd not asked, hence not required.

Q.6A

Answer:

110000+510000

Less:100000 (70000+32000 – restricted to 100000, PPF no restriction to 10% of GTI – Maximum is 70000 hence can be taken)

Less: 20000 (25000 restricted to 20000)

Less: 15000 (18000 restricted to 15000)

Less: 15000 ( Lot of People making mistakes including myself :D, he is a non resident hence deduction of 20000 not possible as senior citizen is strictly resident senior citizen)

= 470000

Tax: 28840

Average Rate: 6.14% (6.14 or 10% whichever is lower)

Relief = 110000*6.14% = 6754

Net Tax = 22086.

Q.6B

For Both the answer is NO ! As the order passed was consistent in law at the time it was passed.

Q.6C

There is a lot of controversy on this question . Please refer Circular 3/2010 dt 2.3.2010. It is very very clear. Do read the circular thoroughly and read the question as well. The use of the words “ for macro monitoring only” in the question is very important.

The Assessing Officer is not correct

Q.7A

It is a case of misrepresentation of facts by the assessee, hence order of the commission is void ab initio

Q.7B

Arrangement is tax evasive to avoid provisions of clubbing, to be clubbed with Mayur’s brother and Mayur accordingly

Q.7C

i)                    return required, audit required, due date – 30.09.2011

ii)                   return not required, due date – NA

iii)                 very tricky question in my opinion – it says the hospital is availing exemption u/s 10(23C) . Unless it is wholly or substantially financed by the government, exemption cannot be availed unless return of income is filed. Therefore the answer is two fold

if wholly financed by the government – no return required

if not – return to be filed for the purpose of continuing exemption u/s 10(23C) , due date – 30.09.2011 (due to 44AB)

I hope some of these answers were of some help :)

I agree with  most of the answers given by Sri,  barring Ans no 1(c) and 6(b). Good job done Sri.

Originally posted by : Devika
	It was an easy paper with variation in type of ques asked in Wealt tax.....Those who studied whole syllabus  I m sure this paer was meant fr them only,,

Well opinionsd differ devika... DT was not an easy paper ... They have tested on Salary .. No proper question on Wealth Tax and Taxation of Company. This may be easy for those who are attempting only one group... Cos they can devote too much of time for tax.. But for those who are writing both the group.. It would be a nightmare. Just in a days time, its literally impossible to revise the entire book of Tax (1000 pages).. Case laws go on increASING EVERY ATTEMPT, but previous case laws are not removed.. In my opinion it was a very tough paper ..

Can some one kindly Upload DT May 11 Question Paper ?

Thanks in advance

Regards

Can some one kindly Upload DT May 11 Question Paper ?

Thanks in advance

Regards