St. Joseph’s College of Commerce B.B.A. 2016 VI Sem Income Tax – II Question Paper PDF Download

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REG NO:

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATIONS – MARCH/APRIL 2016
B.B.M. – VI SEMESTER
m1 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 tax rebate?
  2. Mr X received Rs. 70,000 as winnings from Lottery .what is the tax liability?
  3. Explain in brief “Loss that can be carried forward”
  4. Explain provisions relating to additional depreciation allowable for New plant and Machinery in a manufacturing organization.
  5. How would you treat the following while computing the Business Income

a)      Provision for contingencies of Rs. 75,000

b)     Cash payment of Rs 25,000  on a bill due when there was a bank strike
  6. How would you treat closing stock of Rs, 80,000 undervalued while computing income from Business
  7. How would you treat the payments made to outside agencies to promote research?
  8. What is Best Judgment Assessment?
  9. Mr. X spent Rs. 50,000 on preparation of feasibility report, Rs. 30,000 on conducting survey and Rs. 20,000 on legal charges in drafting agreement. How much can he claim as deduction while computing business income?
  10. Give two reasons why pan card is important in India.
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                                      (4×5=20)
  11. Mr. D.D. Dewan & Company are Chartered Accounts in Delhi.  They have submitted the following Income and Expenditure Account for the year.  Compute the income from profession.

Expenses ` Income `
To Drawings 48,000 By Audit fees 2,24,000
‘’ Office rent 42,000 ‘’ Financial Consultancy service 98,000
‘’ Telephone installation charges under O.Y.T. scheme 15,000 ‘’ Dividends from an Indian Company (Gross) 6,000
‘’  Electricity Bill 4,200 ‘’  Dividend on units of UTI 4,000
‘’ Salary of Staff 66,000 ‘’  Accountancy works 24,000
‘’ Charities 1,200    
‘’  Gifts given to relatives 9,600    
‘’  Car Expenses 21,000    
‘’  Subscription for Journals 2,500    
‘’  Institute fee 1,200    
‘’  Stipends given to trainees 12,000    
‘’  Net Income 1,33,300    
  3,56,000   3,56,000

Notes:

a. Depreciation of car during the year amounts to ` 5,000

b. 30% of the time, car is used for personal purposes.

 
  12. Mr. Raj Singh Parmar sold a plot of land at Jaipur on 1-6-2014 (C.I.I. = 1024) for   ` 14,40,000.  He paid   `40,000 as selling expenses.  The plot was received by him on death of his father on 15-3-85 (C.I.I. = 125).  His father had acquired it on 1-4-1980 for  ` 1,00,000 and its F.M.V. on 1-4-1981 was `  1,20,000.

On 1-10-2014 he invested   ` 3,00,000 in bonds issued by Rural Electrification Corporation Limited notified u/a 54EC and 2,00,000 on 1-3- 2015 in Bonds of National Highway Authority of India.

Compute his taxable capital gain.
  13. From the following particulars of Mr. Amarpreet Thind, compute the amount of taxable gifts chargeable as “Income under the head other sources”:

  1.  He received a cheque of ` 1,00,000 as a gift from his grandfather on 15 May 2014.
  2. He received  ` 21,000 from his friend from Canada as a gift on 31 May 2014.
  3. He received  ` 5,00,000 under a will from his grandmother on 30 June 2014.
  4. He received  ` 50,000 from his father’s friend on 30 June 2014.
  5. He received ` 75,000 as a gift from his uncle on 30 September 2014 on his birthday.
  6. He received  ` 20,000 as gift from his employer on 1 October 2014.
  7. He received a gift of `  51,000 from his father’s brother on 30 November 2014.
  14. Explain the Powers of

i)                   CBDT     ii) Income Tax officer
  15. Explain various exemptions u/s 54, 54B, 54D, 54EC & 54F in the light of the conditions to be satisfied for claiming deduction, the new asset to be invested in  and the amount of deduction allowed.
  16. Shri Anil earned gross total income of  `5,00,000 in the previous year 2014-15 and made the following donations during the year:

  1. `  10,000 to Chief Minister’s Earthquake Relief Fund Gujarat.
  2. ` 15,000 to National foundation for Communal Harmony.
  3.  ` 20,000 to Municipal Corporation approved for promotion of family planning.
  4. ` 45,000 to approved institutions.

Compute the amount of deduction admissible to him u/s 80G for the assessment year 2015-16.
 

 

 

SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                                (3×15=45)                                                                                                
  17. Following is the Profit and Loss Account of Mr. A for the year ending

31-3-2015.

Debits ` Credits `
To Salary 3,20,000 By Gross Profit 10,85,000
‘’  Office expenses 48,000 ‘’ Bad debt recovered 15,000
‘’  Depreciation 80,000 ‘’  Commission 22,000
‘’  Audit fees 25,000 ‘’  Sundry receipts 13,000
‘’  Repairs 48,000 ‘’  Custom duty recovered

(disallowed earlier)

 30,000
‘’  Amount transferred to special reserve 90,000    
‘’  Expenditure on Diwali festival 10,000    
‘’  Contribution to unapproved gratuity fund 18,000    
‘’  Interest payable 70,000    
‘’  Expenses on research 50,000    
‘’  Provision for income tax 60,000    
‘’  Bonus 18,000    
‘’  Provision for sales tax 15,000    
‘’  Employer’s contribution to employees’ PF 11,000    
‘’  Legal expenses 10,000    
‘’  Net Profit 2,92,000    
  11,65,000   11,65,000

Other information is:

  1.  Depreciation includes ` 20,000 being unabsorbed depreciation of earlier years.
  2. Repairs include  `18,000 being expenditure on constriction of wash rooms which were completed on 31-12-2014.
  3. Research expenses include  `30,000 being cost of a computer acquired for research, which is not connected to assessee’s  field of business.
  4. Interest payable includes ` 5,000 paid as penalty for late payment of interest .
  5. Sales tax is actually paid on 10-4-2015.
  6. Salary includes payment of  `40,000 given as compensation to the widow of a deceased employee.
  7. Out of bad debts recovered only  `10,000 were allowed as deduction earlier.

From the information given above calculate the business income of Mr. A for the assessment year 2015-16.

 
  18. Shri Ram Nath Shukla has given the following information regarding his investments:

 

Name of the Companies Date of Purchase C.I.I. Cost Price

`

 Date of Sale SalePrice

`
a)      Shares in companies:

 

          
i)         A Ltd. 1-1-2003 447 10,000 30-10-2014 40,000
ii)B Ltd. 1-1-2004 463 30,000 31-10-2014 80,000
iii)C Ltd. 31-1-2014 939 20,000 30-12-2014 26,000
iv)D Ltd. 28-2-2014 939 18,000 31-1-2015 14,000
i)                                           House Properties: Flat at Marine Drive –self-occupied  

1-12-87

  

150

  

60,000

  

30-6-2014

  

5,20,000

 
ii)                                         Shop at Pune (let-out) 30-6-2003 463 80,000 30-9-2014 2,80,000

 

Compute Capital Gain Taxable

 
  19. From the following particulars of Mr. Edward for the previous year ended 31st March  2015, compute his total Income for the Assessment year 2015-16.

  He Received: `
a. Director’s fee from a company 10,000
b Interest on Bank Deposits 3,000
c Income from undisclosed sources 12,000
d Winnings from lotteries (Net) 24,500
e Royalty on a book written by him 8,000
f By giving lectures in functions 5,000
g Interest on loan given to a relative 7,000
h Interest on tax free debentures of a company (listed in recognized stock exchange) (Net) 3,600
i Dividend on shares 6,400
j Interest on post office savings bank A/c 500
k Interest on Government Securities 2,200

 

He paid  `100 for collection of dividend and `1,000 for typing the manuscript of book written by him.

 

 

 

 

 

 

 

 
  20. M/s A & Bros. have following assets on 1-4-2014:

Sl. No. Assets WDV on 1-4-2014 Additions during the year Scrap value of asset put out of use during the year Rate of depriciation
1 Plant & machinery 42,20,000 6,90,000 2,10,000 15%
2 Aircraft 34,50,000 – – 40%
3 Motor Buses & Lorries (used for hiring) 6,40,000 2,80,000 4,15,000 30%
4 Imported car NIL 3,60,000 – 15%
5 Patent Rights NIL 8,00,000 NIL 25%
6 Technical Know how NIL 6,00,000 NIL 25%

Calculate the amount of depreciation which firm can claim for the assessment year 2015-16 and also calculate the WDV on 1-4-2015.  New Bus was brought into use from 1-12-2014, Plant & Machinery on 1-7-2014 and Patent Rights and Technical Know-how on 1-11-2014 and imported car on 1-6-2014.

 
  21. Mr. Tarasu having gross total income of Rs.5,00,000 for the financial year
2014-15 furnishes the following information:

a)      Deposited Rs.50,000 in tax saver deposit in the name of major son in a nationalized bank;

b)     Paid Rs.40,000 towards premium on life insurance policy of his married daughter;

c)      Interest is on listed equity shares (lock in period 3 years) – Rs.40,000;

d)     Contributed Rs.1,00,000 to P.M National Relief Fund.

e)      Donated Rs.20,000 to a Govt. recognized institution for scientific research;  his gross total income does not include any income under the head profits and gains of business profession;

f)       Interest on bank deposit (saving bank) – Rs.1,00,000;

Compute the total income of Mr. Tarasu for the A.Y. 2015-16.
 

SECTION – D
IV) Case Study – Compulsory question.                                                                (1×15=15)                                                                                          
  22. Given below is the profit and loss account of Shri Rajaram for the year ended 31-3-2015.

Dr. ` Cr. `
To Salaries 7,000 By Gross Profit 50,000
To Drawings 8,000 By Interest on Post Office Saving Bank Account 3,600
To Insurance Premium on his life 1,000 By Proceeds from Life Insurance Policy 3,400
To Depreciation 4,500 By Interest on Bank deposits (fixed deposit) 3,600
To Donation to the recognized institutions 500    
To General Expenses 2,600    
To Education expenditure on his three dependent sons in England 6,600    
To Provisions for doubtful debts 1,500    
To Income-tax 2,000    
To Rent 1,700    
To Net Profit 25,200    
  60,600   60,600

 

Compute his taxable income for current assessment year after taking the following information into consideration:

i)                   The amount of depreciation allowance is  `4,000

ii)                 General expenses include   ` 600 for his private expenses.

 

 

 

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