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ASSIGNMENT
DRIVE FALL 2014
PROGRAM MBADS (SEM 3/SEM 5)
MBAFLEX/ MBA (SEM 3)
PGDFMN (SEM 1)
SUBJECT CODE &
NAME
MF0012 &
TAXATION MANAGEMENT
BK ID B1760
CREDITS 4
MARKS 60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400
words. Each question is followed by evaluation scheme.

Q.No Questions Marks Total
Marks
1 Explain the objectives of tax planning. Discuss the factors to be considered in tax
planning.

Objectives of tax planning
Factors in tax planning

5
5
10
2 Explain the categories in Capital assets.
Mr. C acquired a plot of land on 15th June, 1993 for 10,00,000 and sold it on 5th
January, 2010 for 41,00,000. The expenses of transfer were 1,00,000.
Mr. C made the following investments on 4th February, 2010 from the proceeds of the
plot.
a) Bonds of Rural Electrification Corporation redeemable after a period of three years,
12,00,000
b) Deposits under Capital Gain Scheme for purchase of a residential house 8,00,000 (he
does not own any house)
Compute the capital gain chargeable to tax for the AY2010-11.


Explanation of categories of capital assets
Calculation of indexed cost of acquisition
Calculation of long term capital gain
Calculation of taxable long term capital gain
4
2
2
2
10
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3 Explain major considerations in capital structure planning. Write about the dividend
policy and factors affecting dividend decisions.

Explanation of factors of capital structure planning
Explanation of dividend policy
Factors affecting dividend decisions

6
2
2
10
4 X Ltd. has Unit C which is not functioning satisfactorily. The following are the details
of its fixed assets:
Asset
Date of
acquisition
Book value (`
lakh)
Land
Goodwill (raised in books on 31
st
March,
2005)
Machinery
Plant
10
th
February,
2003

5
th
April, 1999
12
th
April, 2004
30
10

40
20
The written down value (WDV) is ` 25 lakh for the machinery, and
15 lakh for the plant. The liabilities on this Unit on 31
st
March, 2011 are
35 lakh.
The following are two options as on 31
st
March, 2011:
Option 1: Slump sale to Y Ltd for a consideration of 85 lakh.
Option 2: Individual sale of assets as follows: Land ` 48 lakh, goodwill ` 20 lakh,
machinery 32 lakh, Plant 17 lakh.
The other units derive taxable income and there is no carry forward of loss or
depreciation for the company as a whole. Unit C was started on 1st January, 2005.
Which option would you choose, and why?
Computation of capital gain for both the options
Computation of tax liability for both the options
Conclusion
4
4
2
10
5 Explain the Service Tax Law in I ndia and concept of negative list. Write about the
exemptions and rebates in Service Tax Law.
Explanation of Service Tax Law in India
Explanation of concept of negative list
Explanation of exemptions and rebates in Service Tax Law


5
2
3
10
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6 What do you understand by customs duty? Explain the taxable events for imported,
warehoused and exported goods. List down the types of duties in customs.
An importer imports goods for subsequent sale in India at $10,000 on assessable value
basis. Relevant exchange rate and rate of duty are as follows:
Particulars Date
Exchange
Rate Declared
by CBE&C
Rate of
Basic
Customs
Duty
Date of submission
of bill of entry
25
th
February, 2010 ` 45/$ 8%
Date of entry
inwards granted to
the vessel
5
th
March, 2010 ` 49/$ 10%
Calculate assessable value and customs duty.
Meaning and explanation of customs duty
Explanation of taxable events for imported, warehoused and
exported goods
Listing of duties in customs
Calculation of assessable value and customs duty.
2
3
2
3
10