St. Joseph’s College of Commerce B.Com. 2013 II Sem Income Tax II Question Paper PDF Download

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ST.JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – APRIL 2013

B.COM – VI SEMESTER

 INCOME TAX – II

Max. Time: 3 Hrs.                                                                                                           Max. Marks: 100

SECTION – A

  1. Answer ALL questions in One or Two sentences:                                 (10 x 2 = 20)

 

  1. Write any two powers of CBDT.
  2. Give any two incomes which are specifically included under the head ‘Income from Other Sources’.
  3. Define the term ‘Property’ within the meaning of Sec. 56(2)(vii).
  4. Write any two expenses expressly disallowed u/s 58.
  5. What is the allowable deduction u/s 80 GG – Rent paid?
  6. Write the conditions to be satisfied for availing Depreciation u/s 32.
  7. Write any two contributions eligible for deduction u/s 80 C.
  8. What are the exceptions to the rule – Inter Source Adjustment (Sec. 70)?
  9. What do you mean by Refund of Tax?
  10. How do you compute the quantum of exemption u/s 54 F?

 

SECTION –B

  1. Answer ANY FOUR questions:                                                                 (4 x 5 = 20)

 

  1. Write a short note on Best Judgment Assessment.

 

  1. State TRUE OR FALSE:
  2. All types of dividend received from an Indian Company are exempt u/s 10.
  3. Agricultural income received from land situated outside India is not taxable in India.
  4. Loss under the head ‘Profits and Gains of Business or Profession’ can be set off against any other head of income of that Assessment Year.
  5. Losses of Specified business as specified u/s 35 AD can be carried forward for an indefinite period.
  6. 2,50,000 received from a charitable institution u/s 12 AA is exempt from tax.
  7. Medical Insurance premium paid by Mr. X in cash Rs. 12,000 is not allowed u/s 80D.
  8. 1,50,000 paid in cash to purchase Land is covered by Sec. 40A(3) and the amount is disallowed.
  9. On interest received on enhanced compensation, 50% of the interest is allowed as deduction.
  10. 100% of the contribution made to PM’s National Relief Fund is allowed as deduction u/s 80 G.
  11. A purchased an immovable property for Rs. 25,00,000. The Stamp Duty Value of the property is Rs. 1,00,00,000/-.  The difference between the two amounts is not taxable under the Income tax Act in the hands of Mr. A.

 

  1. From the following particulars of Miss Deepa for the Previous year ended 31st March 2012, compute the Income under the head ‘Income from Other Sources’:
Sl. No. Particulars Amount (Rs.)
1 Directors fee from a company 20,500
2 Interest on Bank deposits 13,600
3 Income from undisclosed sources 1,12,000
4 Winnings from Lotteries   (Net of tax) 23,450
5 Royalty on a book written by him 9,000
6 Lectures in Seminars 5,000
7 Interest on loan given to a relative 7,000
8 Interest on Debentures of a company (listed in a recognized Stock Exchange) –  (Net of tax) 3,600
9 Interest on Post Office Savings Bank Account 12,500

He paid Rs. 1,000 for typing the manuscript of book written by him.

 

  1. Ramesh bought 500 listed shares in 1979 for Rs. 35 per share. The market value of these shares on 1.4.1981 was Rs. 75 per share.

Compute the tax payable by Ramesh on capital gain from these shares, if the above shares were sold on 15.11.2011 for:

  1. 6,00,000                      ii) Rs. 4,20,000

 

  1. X owns the following machinery as on 1.4.2011:
Machinery WDV as on 1.4.2011 (Rs.) Rate of Depreciation (%)
A 70,000 15
B 1,64,000 15
C 84,000 15

He acquires new machinery ‘D’ for Rs. 60,000 on 2.11.2011 which is depreciable at 15%.

Machinery B and C are sold on 15.03.2012 for consideration of Rs. 1,80,000 and Rs. 40,000 respectively.

  1. Compute the depreciation for the Assessment Year 2012-13 and indicate if there is any short-term capital gain/loss.
  2. If Machinery B and C together were sold for Rs. 4,00,000/-, compute the depreciation for the Assessment Year 2012-13 and indicate the short-term Capital gain/loss.

 

  1. From the following statement, compute the income from profession of Dr. K.M. Anantan, if accounts are maintained on mercantile system:

 

Particulars Amount Particulars Amount
To Dispensary Rent 36,000 By Visiting fees 45,000
To Electricity & water 6,000 By Consultation fees 1,25,000
To Telephone Expenses 6,000 By Sale of Medicines 72,000
To  Salary to nurse 36,000 By Dividends 5,000
To Depreciation on Surgical Eq. (as per I.T. Rules) 6,000    
To Purchase of Medicines 36,000    
To Depreciation on X ray Machine 4,000    
To Income Tax 5,500    
To Donations 4,000    
To Motor Car Expenses 9,600    
To Depreciation on car 4,800    
To Net Income 93,100    
  2,47,000   2,47,000

Notes:

  1. Electricity and water charges include domestic bill of Rs. 2,500/-.
  2. Half of motor car expenses are for professional use.
  3. Telephone expenses include 40% for personal use.
  4. Opening stock of medicines was Rs. 6,000/- and closing stock was Rs. 4,000/-.

SECTION –C

  • Answer ANY THREE questions:                                                        (3 x 15 = 45)

 

  1. From the Profit and Loss A/c of X (age 31 years) for the year ending March 31, 2012, ascertain his Total Income and Tax Liability for the Assessment Year 2012-13:
Particulars Amount(Rs.) Particulars Amount(Rs.)
To General Expenses 13,400 By Gross Profits 3,15,500
To Bad Debts 22,000 By Commission 8,600
To Advance Tax 5,000 By Brokerage 37,000
To Insurance 600 By Sundry receipts 2,500
To Salary to Staff 26,000 By Bad debt recovered (earlier allowed as deduction) 11,000
To Salary to X 48,000 By Interest on debentures (Gross) 25,000
To Interest on overdraft 4,000 By Interest on deposit with a company (Gross) 13,000
To Interest on loan to Mrs. X 42,000    
To Interest on Capital of X 23,000    
To Depreciation 48,000    
To Advertisement 7,000    
To Contribution to Employees’ recognized Provident Fund 13,000    
To Net Profit 1,60,600    
TOTAL 4,12,600 TOTAL 4,12,600

Other Information:

  1. TDS on Debenture Interest is Rs. 2,500.
  2. TDS on Interest on Deposits with company is Rs. 1,300.
  • The amount of depreciation allowable is Rs. 37,300 as per the Income tax rules. It includes depreciation on permanent sign board.
  1. Advertisement expenditure includes Rs. 3,000; being cost of permanent sign board fixed on office premises.
  2. Income of Rs. 4,500 accrued during the previous year, is not recorded in the Profit and Loss Account.
  3. X pays Rs. 6,000 as premium on own life insurance policy of Rs. 70,000.
  • General expenses include:
  1. 500 given to Mrs. X for arranging a party in honour of a friend who has recently come from Canada
  2. 1,000 being contribution to a political party.
  • Loan was taken from Mrs. X for payment of arrears of Income-tax.

 

  1. Divya furnishes the following details for the Assessment year 2012-13:
Particulars Amount (Rs.)
Net Agricultural Income in India 4,800
Net Agricultural Income from land in Sri Lanka 10,000
Profit on sale of agricultural land situated in Mangalore City 25,00,000
Vacant land – ground rent received 12,000
Rent received on sub-letting house 37,500
Rent payable for house sub-let 15,000
Maintenance expenses on house sublet 1,200
Director sitting fees 3,600
Interest on Deposits with nationalized bank 1,000
Interest on postal saving bank account 1,200
Interest credited to PPF account 6,000
Interest accrued but not received on NSC VIII Issue 1,050
Interest received under Post Office monthly income scheme 12,000
Interest on deposits with HDFC 900
Interest on securities (Gross) 5,000
Dividends received from Indian companies – covered u/s 115 O 12,000
Bank charges for collection of above dividend 100
Dividend received from foreign companies 1,100
Interest paid on amount borrowed to invest in shares of foreign co. 8,600
Gift received from a Charitable Institution registered u/s 12AA 55,000
Gift from another friend in foreign currency 50,001
Gift from another friend in Indian currency 500
Winnings from Lottery (Net of tax) 70,000
Cost of Lottery Tickets purchased during the year 5,300

Note:  Debenture Interest on 10% debentures of ABC Ltd. of face value of Rs. 1,00,000 (due half yearly on 30th Sep. and 31st March) but received on 15.4.2012.

 

Compute the taxable income from other sources of Ms. Divya, who is following Mercantile System of Accounting.

  1. (a) Mr. A sold on 31.10. 2011 an agricultural land, which he has been using for agricultural purposes for several years, for Rs. 22,00,000. He acquired that land in 1978 for Rs. 1,00,000.  The Market value of such land as on 1.4.1981 was Rs. 2,00,000.  He purchased rural agricultural land for Rs. 3,50,000 on 25.02.2012 which was sold for Rs. 5,00,000 on 15.05.2012.  Further, a sum of Rs. 5,50,000 was invested by him in purchase of residential property on 25.5.2012.  He owned only one house property before this date.  The new house property was sold on 31.08.2012 for Rs. 6,50,000.

Compute Capital gain for Assessment Year 2012-13 and Assessment Year 2013-14. (8 Marks)

 

(b) Mr. Ravi Varman, Director, X Pvt. Ltd., furnishes the following particulars for the year ending 31.03.2012:

  1. Investments in NSC – Rs. 60,000/-
  2. Life Insurance Premium paid – Rs. 30,000/-
  3. Deferred Annuity Plan – Rs. 30,000/-
  4. ICICI Pension Plan – Rs. 15,000/-
  5. Contribution to Pension Scheme of Government – Rs. 25,000/- each by the employer and employee.
  6. Subscription to notified long term intra-structure bonds – Rs. 30,000/-.

 

Compute the deduction admissible under Chapter VI – A for Asst. Year 2012-13.

(7 Marks)

  1. The following are the particulars of the income of Shri P.K. Dutta, a Government servant for the year ended 31.03.2012.
  2. Salary at Rs. 16,300 p.m.
  3. He contributed @ 10% to his Provident Fund to which the Government contributed an equal amount.
  • He owns two flats one of which is let out at Rs. 1,200 p.m. and the other is occupied by him for residence, the annual rental value of which is Rs. 8,000. He has paid Rs. 750 as ground rent and insurance charge in respect of the first and Rs. 850 in respect of the second.  The municipal taxes paid by him in respect of the two flats amounted to Rs. 300 and Rs. 325 respectively and he spent Rs. 300 on white washing, petty repairs in respect of both the flats.
  1. He received during the year Rs. 22,500 as interest on Government securities and Rs. 700 as dividend from an Indian company. He has insured his life and pays an annual premium of Rs. 12,500 on the policies.

 

Ascertain his Total Income and the tax payable by him for the Asst. Year 2012-13.

 

  1. (a) Examine the amount chargeable to tax in the following cases with reason:
  2. Ravi received a sum of Rs. 10,000/- from Mr. Lalith, Rs. 15,000 from Mr. Ashok and Rs. 25,000 from Mr. Koshy, who are all non-relatives, on the occasion of New Year.
  3. In the question (i) above, if Mr. Ravi is also in receipt of a gift of Rs. 501 from Mr. Arun, who is a non-relative, on the occasion of his birth day, will your answer be different?
  • Vinod receives a motor Car as gift from his friend on the occasion of his birthday. The fair market value of the motor car is Rs. 3,55,000.
  1. Ram received a gift of Rs.5,00,000 from a neighbor, who is in death bed.
  2. Akash received a sum of Rs. 1,80,000 from an unregistered charitable institution in connection with compensation for floods.
  3. Anesh received Rs. 13,800 from Post Office Saving Bank Account as Interest.
  • Govinda is in receipt of Rs. 3,50,000 being interest on enhanced compensation.  (7 Marks)

(b)              Mr. M has computed his Gross total income for the Assessment Year 2012-13 which amounted to Rs. 3,50,000.  It includes Rs. 3,00,000 on account of long-term capital gain.  He has deposited Rs. 70,000 in a PPF account during the previous year.  Compute the tax payable by Mr. M assuming that:

  1. He is less than 60 years of age
  2. He is 60 years of age                                                (8 Marks)

SECTION – D

 

  1. COMPULSORY QUESTION:                                                                            (1 x 15 = 15)

 

  1. From the following particulars of income of Mr. R.L. Mittal for the year ended on 31.03.2012, calculate his income for the assessment year 2012-13:

 

  1. Salary Rs. 8,000 p.m.
  2. Interest received from Bank of India on Fixed Deposit Rs. 900.
  • Interest received from DCM Ltd., on Fixed Deposit Rs. 3,000.
  1. Interest received from Government Securities Rs. 6,300.
  2. Dividend received on Equity Shares of DCM Ltd., Rs. 1,200
  3. Dividend received from a co-operative society Rs. 200.
  • Dividend received on units of UTI Rs. 1,000.
  • He owns a poultry farm also. Its profits for the previous year amounted to Rs. 3,81,000.
  1. He sold his residential house on 11.04.2011 for Rs. 2,30,000 which he had purchased for Rs. 20,000 in 1978 and its fair market value on 1.4.1981 was Rs. 30,000.
  2. He sold 150 equity shares of DCM Ltd., for Rs. 45,900 on 5.12.2011 through a recognized stock exchange which was allotted to him as bonus shares in 1991.
  3. He purchased National Savings Certificates VIII Issue on 31.03.2012 for Rs. 10,000.
  • Share of profit from a registered partnership firm Rs. 98,000.
  • Share of profits from HUF Rs. 84,000.

 

 

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