St. Joseph’s College of Commerce B.Com. 2015 Income Tax -II Question Paper PDF Download

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ST. JOSEPH’S COLLEGE OF COMMERECE (AUTONOMOUS)
END SEMESTER EXAMINATION – APRIL 2015
B.com- VI SemesteR
C1 11 601: INCOME TAX -II
Duration: 3 Hours                                                                                             Max. Marks: 100
SECTION – A
I) Answer ALL the questions.  Each carries 2 marks.                                        (10×2=20)
  1. What is’ ex-parte’ assessment? Mention the two types of ’ex-parte’ assessment
  2. Explain the deduction u/s 80GG
  3. What is the standard deduction available in respect of family pension?
  4. State whether the following are ‘Capital assets or not’ with reasons for your answer:

a)      A car owned by an assessee and used by him and his family.

b)     Silverware belonging to a HUF which are placed before the family deity at the time of worship on special occasions
  5. Explain the provisions in respect of setting off and carry forward of ‘capital losses’.
  6. State whether the following items are deductible as business expenses or not :

a)      Donation to political party

b)     Penalty paid to custom authorities for violating custom rules

c)      Bad debts

d)     Brokerage paid for raising a business loan
  7. What is Rebate u/s 87A?
  8. ABC Ltd is engaged in manufacture of automobiles. During the PY 2013-14, the company made the following payments to promote research:

a)      Rs 50,000 is given to an approved research association

b)     Rs 50,000 to another approved research association which has its object of research in field of social sciences

c)      Rs 1,00,000 is given to IIT, with a specific direction to use the money for undertaking scientific research.

Specify the quantum to which the company can claim deduction in respect to the above payments
  9. What is meant by ‘re-assessment’?
  10. State the conditions to be fulfilled to claim additional depreciation.
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                                      (4×5=20)
  11. Mr. X received the following gifts during the PY 2013-14. Compute his taxable income under the head ‘Income from Other Sources’

a)      Received Rs 1,00,000 as gift from Y (friend) on 1/6/2013

b)     Received microwave costing Rs 14,500 as gift from his another friend Z

c)      Received Rs 50,000 as gift from another friend Amrit on 1/11/2013

d)     Received Rs 30,000 as gift from his sister on 1/1/2014

e)      Received Rs 40,000 as gift from his friend Mr. D on 1/12/2013

f)       Received Rs 1, 60,000 as gift from his non-resident friend on 1/2/2014.

 
  12. Mr. Amol purchased 500 equity shares of Rs 10 each for Rs 56 per share in 1983-84. In May 1989 he received 200 bonus shares. On January, 1996 he invested in 200 shares @ Rs 30 each allotted to him as right issue. In December 2013 he sold 200 bonus shares @ Rs 100 each and 100 right shares @ Rs 145 per share on 31 January, 2014. Find out the taxable capital gain if Cost Inflation Index for 1983-84 is 116, 1989-90 is 172, 1995-96 is 281 and 2013-14 is 939.

 
  13. Dr. Satish is a medical practitioner. He gives you the following summary of cash book for the year ending 31/3/2014:

  Rs   Rs
To Balance 10,000 By rent of clinic 18,000
To consultation fee 60,000 By purchase of medicine 38,000
To visiting fee 45,000 By staff salaries 24,000
To gifts and present 8,000 By surgical equipment 40,000
To sale of medicine 42,000 By motor car expenses 8,000
To dividend from UTI 6,000 By purchase of motor car 1,40,000
To Life Insurance maturity 1,00,000 By household expenses 7,000
To Interest from National Defense Bonds 6,000 By closing balance 2,000
  2,77,000   2,77,000

Other Information:

a)      50% of motor car expense incurred in connection with profession. Car was purchased in December 2013

b)     Household expenses include Rs 6,800 for life insurance premium

c)      Gifts and presents include Rs 3,000 from relatives

d)     Closing stock of medicine Rs 12,000 and on 1/4/2013 opening stock was Rs 4,000.

Compute his professional gain in AY 2014-15.

 
  14. Explain the powers of an assessing officer.

 
  15. Mr. Y spent following amount on scientific research. Calculate the amount which he can debit to P&L a/c during the AY 2014-15:

a)      Salary of staff and other expenses on research conducted before commencement of business

(i)                 Relating to own products- Rs 90,000

(ii)              On products not related to own business- Rs 1, 10,000.

b)     Capital expenditure on land acquired for research – Rs 5,40,000

c)      Capital expenditure on building and plant and machinery required for research – Rs 6, 60,000.
  16. Mr. X had gross total income of Rs 5, 00,000 which included Rs 10,000 as long term capital gain for AY 2014-15. During the year Mr.X made the following donations:

National Defense Fund Rs 10,000
Prime Minister’s National Relief Fund Rs 1,00,000
To Family Planning Association of India Rs 10,000
All India Congress Party (Recognized political party) Rs 1,00,000
University of Allahabad ( Notified as Institute of National Eminence) Rs 50,000
To a notified charitable hospital Rs 50,000

In addition to the above, he paid Life Insurance Premium of Rs 25,000 on a policy of Rs 2, 00,000. You are required to compute the deduction in respect of donations and Life Insurance premium.
SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                                (3×15=45)                                                                                                
  17. From the particulars given below, calculate the amount of depreciation available during the AY 2014-15:

  Rs
Car used for Taxi service (30% Block)  
W.d.v as on 1/4/2013 4,60,000
New car purchased on 1/5/2013 3,20,000
Sale price of a car sold in December 2013 1,35,000
Another taxi purchased on 1/11/2013 2,80,000
Furniture of meeting hall (10% Block)  
WDV on 1/4/2013 1,60,000
Sale price of an item of furniture sold in Jan 2014 (its WDV was Rs 36,000) 20,000
New items of furniture purchased in Feb. 2014 96,000
Office equipment (15% Block)  
WDV as on 1/4/2013 90,000
Cost of new typewriter on 1/10/2013 10,000
Sale price of two old typewriters 6,500

A car whose WDV as on 1/4/2013 was Rs 36,000 (not included in WDV as on 1/4/2013) was sold on 1/3/2014 for Rs 20,000. A new car was purchased for Rs 5, 60,000 on 1/4/2013. Another car vehicle costing Rs 6,00,000 was added on 1/12/2013.

 
  18. Ashish submits the following particulars for PY 2013-14 from which compute his taxable income:

Income under head salary(computed) Rs 2,26,000
Income from house property (computed) Rs 57,000
Long term capital gain Rs 90,000
Short term capital gain Rs 20,000
Profits and gains from business of poultry farming Rs 60,000
Interest on government securities Rs 6,000
Interest on savings bank deposits Rs 16,000
Interest on deposits (gross) Rs 4,000

 

 

 

Take into consideration the following payments:

Life insurance premium on his own life Rs 10,000
PPF Rs 30,000
Donation to national children fund Rs 2,500
Donation to P.M Relief fund Rs 6,000
Donation to approved charitable institution Rs 20,000
Donation to government for family planning Rs 14,000
Payment by cheque to GIC for insuring health of:  
a)      His wife Rs 8,000
b)     Dependant son Rs 9,000
c)      Dependant father (age 60 yrs) Rs 20,000
d)     Dependant brother Rs 1,500
Expenses on medical treatment of a dependant, being a person with disability Rs 6,000
Amount deposited in UTI scheme for dependant relative(handicapped) Rs 25,000
Payment of interest on account of loan taken from charitable institution for education of his son doing M.B.A Rs 30,000
   

19.

  

Mr. David sold the following assets during the year ending 31/3/2014:

Sale proceeds Rs
Shop purchased during 1986-87 for Rs 65,000 6,00,000
Machinery purchased during 1993-94 for Rs 5,00,000 (WDV on 1/4/2013- Rs 3,50,000) 7,20,000
Furniture purchased on 1/5/2013 for Rs 10,000 13,000
Machinery purchased on 1/5/2013 for Rs 1,00,000 1,20,000
Agricultural land purchased during 1979-80 in Agra for Rs 45,000

(The fair market price of the land was Rs 70,000 on 1/4/1981)

 9,70,000
Residential house purchased during 1987-88 costing Rs 1,90,000 sold on 30/9/2013 12,64,000

On 15/2/2013, he purchased another residential house costing Rs 2,00,000. During the AY 2014-15, before the due date of filing the return of income he deposited Rs 3,00,000 in ‘Capital Gain Account Scheme’. Compute capital gain of Mr. David for AY 2014-15.

Cost Inflation Index for the year 1981-82, 1986-87, 1987-88 and 2013-14 were 100, 140, 150 and 939 respectively.

 
  20. Sanjiv provides you the following details from his business books for the AY 2104-15, from which compute the taxable business income:

  Rs
Computed net profit after charging the following: 72,000
Provisions and reserves debited to profit & loss a/c:  
(a)   Provision for discount on debtors 42,000
(b)   Provision for depreciation 31,000
Household expenses 48,000
Donation (approved) 70,000
Computer purchased for scientific research 20,000
Bearer cheque issued for purchase of raw material 25,000
Own your telephone deposit 16,000
Advertisement expenses on sign board given to customers 45,000
Audit fees paid in cash 25,000
Patents purchased during the year 75,000
Market survey expenses 15,000
Feasibility report expenses on a new project Rs 6,00,000 35,000
Opening stock was valued at cost + 10% basis and closing stock is valued at cost – 10% basis. Opening stock was valued at Rs 66,000 and closing stock was valued at Rs 72,000.  
Incomes credited to profit & loss account were:  
(i)                 Bank interest on F.D 7,000
(ii)              Refund of excise duty 5,000
(iii)            Interest on UTI units 3,000
(iv)            Bad debts recovered 3,000
   

21.

  

Mr. Shivanand has following investment in the PY ended 31/3/2014:

(i)                       Rs 11,000, 10% Karnataka State Government Loan

(ii)                    Rs 30,000, 13.5% debentures of Loha Machine Tools Ltd (Listed)

(iii)            Rs 35,000, 11% Securities of Sugar Mill Co (Unlisted)

(iv)            Rs 36,000, 10% Tax –free Commercial Securities

(v)                      Rs 3,580, received as interest on Tamil Nadu Government Securities

(vi)            Rs 4,500 received as interest on the securities of a Paper Mill Co (unlisted)

(vii)          Rs 4,500 received as interest on securities of Textile Co (Listed)

 

During the PY 2013-14 he purchased Rs 50,000,7% Capital Investment Bonds on 1st October 2013. For this purpose he borrowed Rs 30,000 from bank @ 15%.

Interest on all securities is payable on 30th June and 31st December. The bank charged 1.5% commission on net realization of interest as collection charges.

He was also a Director in a company from which he received Rs 3000 as director’s fees. His other incomes are:

 

(i)                       Winning from lottery – Rs 25,000

(ii)                    Income from agriculture in Sri Lanka- Rs 10,000

(iii)            Winning from horse race- Rs 15,000

(iv)            Interest on Post Office Savings Bank a/c- Rs 2,000

 

Find out his taxable income from other sources for AY 2014-15
 

 

SECTION – D
IV) Case Study                                                                                                              (1×15=15)                                                                                          
  22. Dr. Singh is a medical practitioner. Besides his own practice, he works as a part time physician in a private hospital for which he receives a monthly remuneration. He is also Consultant –physician of ABC Co on a monthly retainer fee.

The doctor maintains a record of his receipts and payments and for the year ended 31/3/2014, the following information is provided:

  Rs
Receipts  
Consultation fees 1,70,000
Gross remuneration from the private hospital 1,30,000
Retainer fee from ABC Co 24,000
Interest on bank fixed deposit(nationalized bank) 18,000
Long term capital gain on sale of shares (STT paid) 50,000
Short term capital gain on sale of shares (STT paid) 60,000
Payments  
Rent and electricity charges for the clinic 17,000
Telephone charges 7,400
Printing & Stationery 500
Car maintenance expenses 9,000
Wages of clinical assistant 6,600
Driver’s salary 3,600
Life Insurance premium 12,400

The written down value of the car purchased in January 1990 and the furniture at the clinic as on 1/4/2013 are noted to be Rs 40,000 and Rs 2,000 respectively. 30% of the use of the car and telephone are attributable to personal and private purposes. The depreciation rate applicable on car is 15% p.a and on furniture is 10% p.a

Prepare a statement showing the total income and tax payable by the doctor for AY 2014-15

 

 

 

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