Direct Tax Laws & International Taxation - May 2018

(a) SDK Ltd. is engaged in the manufacture of textile since 01-04-2010. 14 Its Statement of Profit and Loss for the previous year ended 31" March, 2018 shows a profit of % 600 Lakhs after debiting or crediting the following items : (i) Depreciation charged on the basis of useful life of assets as per Companies Act is % 40 Lakhs. (ii) Industrial power tariff concession of % 3.5 Lakhs, received from State Government was credited to P & L…

3. (a) XLtd., a company in which the whole of its share capital was held by 7 Y Ltd. Both X Ltd. and Y Ltd. are Indian companies. X Ltd. had made investment in shares of ABC Ltd., in 1979 for % 3,00,000 which it sold to Y Ltd. on April 1, 2009 for a consideration of % 30,00,000. The fair market value of these shares of ABC Ltd., as on April 1, 2001 is % 20,00,000. Y Ltd. disinvested…

(a) Discuss the TDS/TCS implications if any, for the following 114x4 =6 transactions. What is the amount payable to the payee : (i) X is a bookmaker and Mr. Y is a punter. On 22-01-2018, B has won % 50,000 in Horse Race 1 and suffered a loss of % 20,000 in Horse Race 2. (ii) Mr. Santosh has let out his house property on a monthly rent of % 60,000 from 15-01-2018 to Mrs. Preeti. (iii) H. Ltd., a…

(vi) Warranty was provided to SAK Ltd. for a period of 2 years. Cost of warranty is calculated at 1% of direct cost incurred. The cost of warranty is neither included in the direct nor indirect cost. Assume conversion rate 1 USD = % 64 Compute Arm’s Length Price as per the cost-plus method and the amount to be added if any to the income of Amar P Ltd. , A search as per section 132 of the Act was…