The Hindu Business Line : Right blend of questions

The question paper has a good mix of the syllabus, with 72 per cent of the paper set from costing and 28 per cent from operations research (OR). In terms of problems and theory the mix is 2:1. This mix satisfies the normal expectation of the students unlike the earlier exam where there was almost no question from OR.

Nature of questions: Overall, the questions were straight forward and have been sourced from the study material and also from previous exams conducted by the ICAI and the ICWAI. Of the 80 marks for problems, 21 marks are from the study material, 47 from past exams and 12 marks are from areas that are relatively new. A student familiar with these would have been able to answer 68 of the 80 marks set on problems. All theory questions are from the study material implying that a student should have no trouble with 39 of the 119 marks set!

Time: The student should not have had great difficulty in finishing the paper in three hours.

Standard: Considering that questions have been sourced from textbooks and the study material, a diligent student would have found the paper good but not difficult.

Specific comments: It is not clear whether the term "Above data" in Question 1(a) (ii) relates to data in the question or to data in Question 1(a)(i). In Question 2(b) the duration of activity 3-5 is not specified. Hence, multiple assumptions are possible. In Question 3(a), the meaning of the term "total taking" is not clear. Does it include service tax or not is debatable.

An average student who has just read the study material should score about 60 marks.

MICS

Mix: The paper carries a welcome combination of questions which test both the understanding of the subject as also the practical application.

A lot of emphasis (almost 25 marks) has been given to the chapter on Information Technology Act, 2000. This unduly penalises those who had omitted it, and heavily favours those who had prepared that chapter alone well.

Nature of questions: Question 6 is innovative and carries a surprise element wherein application of the IT Act, 2000 has been tested, whereas students usually expect straightforward questions.

Time: Time would definitely have been a constraint what with each question carrying more than two subparts.

Standard: Apart from Question 6, the rest of the questions were simple.

Specific comments: Students with a good understanding of the subject would have done well while those who had prepared only based on past questions would have found it difficult.

An average student, if he had chosen the right kind of questions, can score 45-50 marks. Question No 7(a) was pretty vague. A few chapters, such as 1, 2, 3 and 6, have been totally omitted.

Direct taxation

Mix: Of the 100 marks, 87 has been allotted to problems and the balance to theory. Allocation to various segments is as follows: Sections 1 to 94 — 55 marks; Sections 110 to 208 — 16 marks; Sections 209 to 298 — 19 marks; and wealth tax — 10 marks.

Nature of questions: Questions 2(a), 3(b), and 5(a) are based on recent amendment/case law. Question 1, on total income of a company, and Question 8, on wealth tax, are on the same lines as the previous question papers.

Time: Except for Question 1, other questions are unlikely to consume much time. Therefore, students should not find it difficult to finish the paper in time.

Standard: Overall the questions set were straightforward.

Specific comments: Eighty per cent of the questions on income-tax are on the topics which are also covered by them in the PE-2 syllabus. The standard and structuring of the questions could have been better. To illustrate, theory question on tax treatment of Zero Coupon Bonds, Question 3(b) on recent amendment to Section 139(1) and Question 6(b) do not distinguish between a PE-2 paper and a Final paper.

Interestingly, Question 1(b), on availability of exemption under Section 54 EC for Section 50 (10 marks), and Question 2(a), on insurance compensation for seven marks, set in the PE-2 November 2006 exam deserves a place in the Final exam.

There were no questions on important topics such as fringe benefit tax, transfer pricing, e-TDS, e-returns, 234 A, B, C, firms, mergers, de-mergers, non-resident taxation, deprecation, set off, tax audit, clubbing, double taxation, etc.

Indirect taxes

Mix: The break-up between theory and practical questions has been generally good. In Central Excise, 60 per cent theory and 40 per cent application oriented is very good. Ditto in the case of service tax. However, in Customs, 86 per cent of the paper was theory, which is not good. In fact, there were two questions under the same section viz., 25 relating to exemptions.

Coverage: All areas have been adequately covered except valuation. In Customs, valuation has been fully omitted, whereas in Central Excise it has been covered for just three marks which a student could skip under "choice"!

Time: The student should not have difficulty in finishing the paper in three hours.

Standard: This is not a difficult paper. The practical questions are thought provoking and a grip of the subject is necessary to solve them. There is enough scope for an average student to get 50

Specific comments: The part relating to Central Excise and service tax was excellent. There are no mistakes in the question paper and there are no repeat questions from past exams.

The best practical question is Question 3(c). Unless the candidate has worked out postings in Cenvat account and PLA coupled with a good grip of the Cenvat Rules, he would not be able to crack this question.

(Source: Prime Academy, Chennai.)