Direct Tax CA Final (old), Nov 2018 attempt - Why it was toughest paper so far?

Question No.

Chapter

Section No.

Marks

Average performance of the students

Reason / Comment on difficult part of the question paper

Whether it is in relation to the Amendments made by Finance Act, 2017?

1(a)

MAT

Section 115JB

10

Not able to attempt effectively

Focus was on Amendment by Finance Act, 2017 - How to calculate book profit when companies adopting first time IND AS

However, students lack Practical exposure on Taxation of IND AS compliant Companies

Yes.

Section

115 JB(2A) and

Section 115 JB (2C)

1(b)

Taxation of Non-residents

Section 115AD

10

Not able to attempt

Non- Clarity about the provisions of Section 115 AD which deals with computation of total income in the hands of FII and also

Cross- Reference of section 115A and 111A.

2

Computation of total Income

16

Able to manage almost 75%

Rest 25% were the adjustments were focused on -

Rule 6 DD,

Amendment by Finance Act under section 43B,

Cross connection of section 37(2B) and 80 GGB/ 80GGC and

ICDS on valuation of Inventory.

Only one adjustment i.e. section 43B

While another adjustment deals with Section 25 A (Amendment by Finance Act, 2016)

3 (a)

Taxation of Non-residents

Section 9

6

Not able to attempt effectively

Focus was on the practical aspects of definition of 'BUSINESS CONNECTION” under section 9 which was introduced by Finance Act, 2003.

However, Students hardly pay technical attention to this type of definition given in the explanation to Section 9

Like Royalty, FTS.......

3(b)

Taxation of Non-residents

Section

115 F

4

Not able to attempt effectively

Focus was on practical aspects of taxation of Non-resident Indian with a possibility of claiming exemption under section 115 F.

However, question suffers from certain clarity about STT at the time of acquisition of shares- that disturbed students to attempt the same effectively.

3(c)

GAAR

3

Not able to attempt

Focus on GAAR - Amendment was done in the Act long back but made effective in recent past.

And the question was focused on to find out whether one of the tainted elements of GAAR is present coupled with tax advantage?

3(d)

Late fee on filing return and Penalty for contravention of section 269ST

3

Able to manage effectively

-

Entire question Section 234 F and Section 271DA

4(a)

Section 40(a) (ia) - Recent Case Study

4

Able to Manage effectively

-

4(b)

Section 2(22)(e)- Case Study

4

Able to Manage effectively

-

4(c)

Section 32 - Recent Case Study

4

Able to Manage effectively

-

4(d)

Section 56 - Recent Case Study

4

Able to Manage effectively

-

4(e)

Section 10(23C) - Recent Case Study

4

Able to Manage effectively

-

5(a)

Transfer Pricing

Section 92CE

6

Able to Manage 40%

1. Non-Clarity about the applicability of provisions of section 92CE - More Particularly Proviso
2. Not aware of the recent notification no. 52 / 2017

Yes.

Section 92CE

5(b)

Assessment in case of Search

Section 153A

4

Able to Manage 50%

Non-clarity about the amendment made by Finance Act, 2017 extending scope of section 153A beyond six years

Yes.

Section 153A

5(c)

Tax Deduction at Source

6

Able to Mange 50%

Question 5(c) (iii) was focused recent Circular No. 4 / 2016 And Students were not aware of the same

Yes. Section 194 IC and Section 194 IC

6(a)

GAAR

Taxation of Non-Residents

Taxation of E-Commerce Transactions

Collection and recovery of Tax

Filing of ITR by Non-resident

12

Able to Mange 20%

Students were not aware of the historical background of introduction of GAAR

Students failed to read section 91 Carefully

Not aware of Cross- Reference of Section 90 and Section 229

6(b)

Section 281 B

4

Not able to attempt

Not aware of the recent amendment in section 281 B

Yes. Amendment made by Finance Act, 2016 -

Section 281 B

7(a)

Taxation of Non-Resident

6

Able to attempt

-

Yes.

Section 71(3A)

7(b)

Section 147, 154 and 264

5

Not able to attempt

Non- clarity about Concept of Partial Merger and

Total Merger under Income Tax Act

7(c)

ICDS

5

Able to Manage 50%

The question was three-fold:

First perform Valuation as per AS-13

Then perform valuation as per ICDS

And then perform required adjustment

Sr. No.

PRACTICAL ASPECTS OF

Marks

(a)

Amendments made by Finance Act, 2017 and Finance Act, 2016

40

(b)

Taxation of Non-Residents

32

(c)

Transfer Pricing

6

(d)

GAAR

5

(e)

ICDS

7

TOTAL

90