University of Dhaka

Department of Finance
MBA(Evening) Program, Spring 2021
Course # 615; Corporate Tax
Term Final Examination, Marks -40, Time – 1 Hour

Section - A (Mandatory)
1. The latest assessed income of Chowdhury Ltd. ( a private consumer goods manufacturing
company) for the income year 2018- 2019 was Tk. 20,000,000. Accordingly, the company paid
two installments of advance tax for the income year of 2019-2020 based on latest assessment. On
25th January, management decided to pay the remaining installments of advance tax on the basis
of its own estimate of total income amounting Taka 10,000,000 in the income year of 2019-
2020. Management decided to pay based on its own estimate due to adverse effect of COVID-19
on company’s sales. The assessment for the income year 2019 -2020 was completed on 31 March
2021 and profit assessed amounts to Taka 18,000,000.
Determine the amount of excess or shortfall of tax and also explain the consequence of the same.
[12]
2. The Profit and Loss A/C of Nura Ltd. (a listed company with DSE) for the year ended on 30 June 2021
is given below:

Nura Ltd.
Profit and loss A/C
For the year ended 30 June 2021
Debit Taka Debit Taka

Cost of sales 3,200,000 Sales 5,500,000 Salaries and allowances 700,000 Interest on fixed deposit
50,000 Advertisement 100,000 Dividend 100,000 Office rent 150,000 Interest on debentures 90,000
Interest on loan 70,000 Gain on sale of asset 50,000 Donations 140,000
Insurance premium 50,000
Depreciation expense 60,000
Provision for Income Tax 38,000
Bad debt 70,000
Entertainment expenses 180,000
Incentive Bonus 300,000
Oversees traveling expenses 60,000
Legal expenses 50,000
Fines paid to VAT authority 80,000
Audit fee 250,000
Net profit 292,000
5,790,000 5,790,000

The following additional information are also available:-

Salaries are paid in cash. Out of total salaries of Tk. 700,000, Tk. 400,000 paid to employees
who get monthly salary more than Tk. 15,000. Tax depreciation amounts to Tk. 55,000 and the
company has sold an asset for Tk. 100,000 (written down value - Tk. 60,000) that the company
purchased 4 years back at a cost of Tk. 80,000. Legal expenses are paid due to the infringement
of trademarks.
Determine the taxable income and tax liability of the company.
[16]

Section - B

[Answer any one of the following questions] [12] 3. (a) What is tax holiday? What conditions are to be
fulfilled after getting tax holiday? Explain. (b) (i) Briefly explain the procedure of filing Second
Appeal by an aggrieved assessee? (ii) Provide brief description for “Assessment on the basis of
hearing” and “Universal self assessment.”

4. (a) What are the broad objectives of Bangladesh DTAA? Explain the differences between double tax
relief and double tax avoidance.
(b) How does arm’s length price is determined under Comparable uncontrolled price method and Cost
plus method? Explain with an example under each method.