Kalpesh Classes

Black Money Act​​ 

Problem ​​ (BM act ID 01)​​ 

Mr. Ram Resident in India aged 35 years has following foreign assets which have not been disclosed for the purspose of income tax act. He owns a building in Cayman Islands purchased in 1992 for 65 million US dollars (exchange rate at time of acquisition $ = Rs 32) and brokerage was paid at time of acquisition @ 2 % to a Irish Broking company. Mr. Ram has one Russian Girlfriend Mrs. Dubari apart from his​​ wife Sita in India. Mrs. Dubari oftenly comes to cayman islands and spends time with Mr. Ram however Mrs. Dubari did not like the interior of the Building and thus on her request Mr. Ram Spend 1 million Dollar (exchange rate at that time $ = 38) on interior of building in 2001. Assessing officer has come to notice of the asset during the July of previous year. Market value of the Building on 1st​​ April of PY (exchange rate is $=64) is 105 million US dollars and 108 million US dollar on 31st​​ March of PY​​ (exchange rate is $=65). You are required to discuss the tax treatment of same from BM act point of view.

Problem ​​ (BM act ID 02)​​ 

Mr. Jyotinder resident Aged 42 years is a partrner in a firm registered in British Virgin Islands. Mr. Jyotinder and Mr.​​ Juntao of China are partners and sharing profit and losses in ratio of 60:40. Mr. Jyotinder has not disclosed this interest in firm to income tax authorities in India. The balancesheet of firm on 31st​​ March of PY in Euro Millions is given below. You are required to ascertain tax liablity to be paid by Jyotinder under BM act.

Following addition information is available:-

Market Value of Drawing and Paintings as at 01st​​ April of PY is 110

Market Value of buildings in Panama Islands as at 01st​​ April of PY is 150

Bank​​ account in HSBC represents total deposits of 112 and total withdrawal of 102 over period of last 7 years since date of its opening.

Exchange Rate of Euro = 95 (1st​​ April of PY)

Exchange Rate of Euro = 96 (31st​​ March of PY)

Problem ​​ (BM act ID 03)​​ 

Mr.​​ Rajest Aged 42 Resident in India acquired house property at British Virgin Islands located outside India in 1997 for twenty million USD. It was sold in 2001 for twenty five million USD which were deposited in a foreign bank account (BA). In 2002 another house property at Caymans Island was bought for thirty million USD. The investment in property at Caymans Island was made through withdrawal from HSBC bank account (BA) in Singapore. House at cayman’s islands has not been transferred before the valuation date and its value on the valuation date is 62 million USD. Assuming that the value of BA as computed under Rule 3(1)(e) is seventy million USD, find out the fair market value (FMV) of the assets. Exchange rate on 01/04/PY is 70 and on 31/03/PY is 71.

Problem ​​ (BM act ID 04)​​ 

A house property located outside India was acquired by Mr. Thoprani a resident in India during the previous year 2009-10 for fifty million USD. Out of the investment of fifty million USD, twenty million USD was assessed to tax in the total income of the previous year 2009-10 and earlier years. Such undisclosed asset comes to the notice of the Assessing Officer in the previous year. If the value of the asset in the previous year is 200 million USD, find out the amount chargeable to tax. Exchange rate on 01/04/PY is 70 and on 31/03/PY is 71.

Problem ​​ (BM act ID 05)​​ 

• Mr. Imran a Heart Surgeon Resident in India. In the year 2010, he operated on a foreign patient in India. The NR patient directly deposits Rs. 10 lakhs to the credit of the doctor in a Swiss bank. In the year 2014, Dr. went abroad and spent away entire amount.You are required to give your answer in light of BM act.

Problem ​​ (BM act ID 06)​​ 

Mr. Ritesh a resident in India is found to be operating a foreign bank account and​​ following are the details of his bank account right from it opening it. The bank account has come to the notice of the assessing officer on 13th​​ July of previous year. The amount represent USD thousands.​​ 

Market Value of shares of Company X as per Rule 3 is 7,500 thousand USD.

Market Value of Painting as per Rule 3 is 3,500 thousand USD.

Exchange rate on 01/04/PY is 70 and on 31/03/PY is 71.

You are required to​​ 

• Compute the​​ tax liability under the BM act.

• Suppose instead of acquiring the shares of company X he would have acquired Property in China at total cost of 10,000 partly funded from above bank account and other disclosed assets in India. The market value of property as​​ per the report of registered valuer is 20,000.​​ 

List of Important Question to be glanced for Revision before exam.

Wishing You all the best for exams.