Question 1
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 31st March, 2005)
Machinery
Plant
|
10th February, 2003
5th April, 1999
12th 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 31st March, 2011 are 35 lakh.
The following are two options as on 31st 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?
Question 2
Describe the Service Tax Law in USA and concept of negative list. Write about the exemptions and rebates in Service Tax Law.