Total No.

of Printed Pages : 4 ] OBE

044070

MBA (RI) Semester III Open Book Examination 2 0 2 1 – 2 2

COMMERCE
Paper No. MFR-511 : Corporate Tax Planning and Management
Time : 4 hours 30 minutes Full Marks : 70

Instructions :

(i) The Question Paper contains 08 questions out of which you are required to
answer any 04 questions. The question paper is of 70 Marks with each
question carrying 17·5 Marks.
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(ii) The total duration of the examination will be 4·30 Hours (Four Hours and
Thirty Minutes), which includes the time for downloading the question
paper from the portal, writing the answers by hand and uploading the
hand-written answer sheets on the portal.
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àíZm| H$m hñV{b{IV CÎma nmoQ>©b na AnbmoS> H$aZm h¡&
(iii) For the students with benchmark disability as per Persons with Disability
Act, the total duration of examination shall be 6 Hours (Six Hours) to
complete the examination process, which includes the time for downloading
the question paper from the portal, writing the answers by hand and
uploading the hand-written answer sheets on the portal.
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(iv) Answers should be hand-written on plain white A4 size paper using black or
blue pen. Each question can be answered in up to 350 words on 3 (Three)
plain A4 size paper (only one side to be used).
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D1(449) (Continued)
 (2)

(v) Answers to each question should start from a fresh page. All pages are
required to be numbered. You should write your Course Name, Semester,
Examination Roll Number, Paper Code, Paper Title, Date and Time of
Examination on the first sheet used for answers.
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erf©H$, {XZm§H$ Ed§ g_` {bIZm h¡&
Q.1. “Tax planning is a legal and moral way of tax saving.” Discuss the
statement. How is tax planning different from tax evasion?

Q.2. Discuss the provisions of deductions provided for development of

infrastructure sector and backward area under Income-tax Act, 1961.

Q.3. Write short notes on the following :

(a) Income tax provisions regarding depreciation
(b) Income tax provisions regarding set-off and carry forward of losses.

Q.4. A and B want to start a business, the estimated profit of which for the
Previous Year 2020–21 was Rs 10,00,000. They have two options for
selecting a form of organisation :
Partnership firm :
(i) 12% interest on capital of Rs 7,50,000 each
(ii) Salary Rs 2,00,000 p.a. each
(iii) Equal distribution of remaining profit.
Company :
(i) Rs 5,00,000 each as share capital and Rs 2,50,000 each as loan @ 15%
(ii) Salary Rs 2,00,000 p.a. each
(iii) Distribution of remaining profit as dividend equally.
Which option is better from tax point of view?

Q.5. The Director of a Domestic Company, whose existing capital is Rs 1 crore all
in equity shares, in Previous Year 2020–21 proposes to expand its business
for which an additional investment of Rs 50 lakh would be needed. The
entire money can be raised either by issue of equity shares or by issue of
10% debentures. They decide in favour of issue of equity shares. As a Tax
Consultant do you approve the proposal? Assume that rate of return is
20%, rate of income tax is 30%.
D1(449) (Continued)
 (3)

Q.6. From the following information, determine whether the assessee should
purchase an asset or take on lease for the Previous Year 2020–21 :

S No. Particulars Amount (in Rs)

(a) Cost of assets 1,00,000

(b) Rate of depreciation 15% —
(c) Rate of interest 10% —
(d) Repayment of loan p.a. by the assessee 20,000
(e) Rate of tax 26% —
(f) Residual value after five years 20,000
(g) Profit of the assessee before depreciation,
interest and tax/before lease rent and tax 2,00,000
(h) Lease rent p.a. 30,000

Q.7. The following are the incomes of Mr. G for the Financial Year 2021–22 :

Rs

Taxable income from business 6,50,000

Taxable income from house property 2,50,000

Taxable income from other sources— Rs

(i) Dividend from Indian Company 40,000

(ii) Interest on Savings Bank Deposit 15,000 55,000
(a) He has paid life insurance premium 50,000
(b) He has paid health insurance premium in cash 10,000
(c) He has donated to PM Care Fund by cheques 15,000
Calculate Advance Tax Installments u/s 211 of Income-tax Act, 1961.

Q.8. R Company Ltd. is a domestic company. The following are the particulars of
its income in respect of the Previous Year 2020–21 :

S No. Particulars Amount (in Rs)

(a) Income from business 1,10,00,000

(b) Interest on Government Securities 20,000
(c) Short-term capital gain u/s 111A 30,000
(d) Long-term capital gain 66,000

D1(449) (Continued)
 (4)

S No. Particulars Amount (in Rs)

(e) Dividend from domestic company 20,000

(f) Dividend from foreign company 20,000
(g) Book profit u/s 115JB 1,05,00,000
During the previous year company donated Rs 1,50,000 to PM Care
Fund.
Compute the Company’s Total Income and Tax Payable for the
Assessment Year 2021–22.

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D1(449) OBE 044070