Income Tax-II

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.

 

 

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

by

St. Joseph’s college of Commerce (Autonomous)

End semester examination – April 2013

B.B.M – VI SEMESTER

Income Tax – II

 

Duration: 3Hrs                                                                                 Max.Marks:100

Section – A

 

  1. Answer ALL the following questions. (10X2=20)

1)  How to treat bad debts recovered but disallowed earlier?

2)  What is depreciation U/S 32 (1) of the act?

3)  Define the term transfers.

4)  Mention any four assets which do not come under the term capital asset.

5)  What is composite rent?

6)  Under what circumstances the speculation losses can be allowed to be set

off.

7)  What is the deduction allowable U/S 80GG.

8)  Expand abbreviations-CCIT&CBDT

9)  Explain the provisions of section 54EC of Income Tax under the head

capital gains.

10) What do you mean by less  Tax NonGovernment securities?

 

Section – B

  1. II) Answer any FOUR (4X5=20)

 

11)  Mr. Vijayan had the following incomes during the year 2011-12:

Rs.

Interest on Bank deposits                                                                                  4, 000

Income from units of a Mutual Fund                                                              5, 000

Interest on Govt. Security                                                                                  8, 000

Winning from lottery                                                                                        10, 000

Winning from horse race                                                                                    5, 000

He claimed the following deductions:

Collection charges of interest on Govt. Security by Bank                                 100

Expenses for buying lottery tickets                                                                  1, 000

 

Compute income from other sources of Mr. Vijayan for Assessment year

2012-13.

 

12)  Mr. Prabhath Bhat transfers a plot of land for a consideration of Rs.

40,00,000 on 10.10.2011. This plot of land was purchased by him in 1980-81

for Rs. 3, 50,000 (FMV as on 1.4.81 was Rs. 4, 00,000). Brokerage paid for

sale of plot of land was Rs.10, 000. He purchased a residential house for Rs.

5, 00,000 on 1.11.2011 and deposited Rs. 50, 000 in capital gain account

scheme. Compute Mr. Prabhath Bhat’s taxable capital gain for the AY

2012-13. (CII for 1981-82=100 2011-12=785)

 

13)  State, giving brief reasons, whether the following items are allowable

while  computing profits and gains of business or profession

(i)    Donation to a political party.

(ii)   Fees paid to the Lawyer for drafting a new Partnership Deed.

(iii)  Sums paid to a labour leader to call off the strike.

(iv)  Salary paid to son, who is working in the office. The salary is reasonable.

(v)   Rent paid to daughter for office block which was gifted to her at the time

of her  marriage.

 

14)    Explain the rules regarding inter head set of losses.

 

15)    Write short notes on the following:

  1. a) Recovery of tax.
  2. b) Refund of tax.

 

1 6)    The gross total income of Mrs. Usha amounted to Rs. 6, 00,000 in the

previous year ending on 31st March, 2012. She has made the following

donations:

Rs.

(i)   To prime minister’s Gujarat Earthquake Relief Fund (100%)   40,000

(ii)  To Africa (public contribution India) fund  (100%)                     10,000

(iii) To approved educational institutions(50%)                                 15,000

(iv) To approved temples                                                                        35,000

(v)  Clothes distributed to poor                                                                5,000

(vi) To Municipal Corporation for promotion of family planning    20,000

 

Compute the amount of deduction admissible u/s 80G for the

assessment year 2012-13.

 

  Section – C

III)  Answer any three questions.                                                        (3×15=45)

 

  1. From the below given profit and loss account and additional information of Mr. David compute his taxable business income for the assessment year 2012-2013.
Particulars Rs. Particulars Rs.
Opening stock 40,000 Sales 5,00,000
Purchase 2,20,000 Closing stock 50,000
Wages 15,000    
Freight 10,000    
Gross profit 2,65,000    
  5,50,000   5,50,000
Establishment expenses 15,000 Gross profit 2,65,000
Salaries 25,000 Dividend on shares(Gross) 6,000
Rent and taxes 12,000 Rent from house property 15,000
Income tax 10,000 Refund of income tax 2,000
Household expenses 14,000 Interest on Govt. Securities 1,000
Reserve for bad debts 5,000 Bad debts recovered 5,000
Advertisement 15,000 Profits on sale of machinery 3,000
Donation 6,000 Miscellaneous income 9,000
Sale tax 20,000    
Provision for Income tax 8,000    
Carriage outwards 11,000    
Drawings 4,000    
General expenses 16,000    
Interest on capital 9,000    
Bad debts 7,000    
Repairs 7,500    
Taxes and insurance 2,500    
Car expenses 11,000    
Audit fees 12,500    
Depreciation 20,500    
Net profit 75,000    
Total 3,06,000 Total 3,06,000

Additional information:

  1. a) Salaries include payment to a relative employee, which is considered to be

unreasonable up to Rs. 6, 000.

  1. b) Purchases include two payments of Rs.30, 000 and Rs. 10, 000 paid in cash to a supplier
  2. c) Opening stock is valued at 10% above the cost
  3. d) Allowable depreciation is Rs. 22, 500
  4. e) 60% of expenses are for business purposes.

 

18)  Dr. Surendra is a renowned medical practitioner who maintains books of account on cash basis, furnishes his Receipts and Payments Account for the financial year 2011-12:

Income Rs. Expenditure Rs.
Balance b/d 14,000 Rent of Clinic:2010-11 600
Consultation Fees 2010-11 3,000                         2011-12 4,800
                              2011-12 15,000                         2012-13 600
                               2012-13 2,000 Electricity and Water bills 2,000
Visiting Fees 30,000 Professional Books (Annual pub.) 4,000
Loan from Bank for professional purposes 25,000 Collection Charges on Dividend Income 100
Sale of medicines 60,000 Household expenses 7,800
Gift and Presents 5,000 Motor-car purchased 30,000
Remuneration from Articles Published in Professional Journal 6,000 Surgical Equipments 4,800
Dividend 10,000 Income tax 10,000
Interest on Post office Savings Bank A/c in joint names 7,000 Salary of staff 15,000
    Life Ins. Premium 15,000
    Gift to wife 5,000
    Interest on loan 2,000
    Car expenses 15,000
    Purchases of medicines 40,000
    Balance c/d 20,300
Total 1,77,000 Total 1,77,000

Compute his Taxable Professional Income for the assessment year 2012-13, after taking into account the following additional information:

(i)   1/3rd of the use of car relates to his personal use.

(ii)  Depreciation on Motor-car allowable is 15%, on books it is @ 100% and on surgical equipments it is 15%.

(iii) Gifts and presents include Rs. 3,000 from patients in appreciation of his medical service and Rs. 2, 000 received as Birthday Gifts from relatives.

(iv) Closing stock of medicines amounted to Rs.5, 500.

 

19)  From the following particulars, compute taxable capital gains of Mr. Shankar (resident) for A.Y. 2012-13.

Asset Date of purchase Cost (Rs.) FMV on 1-4-81 Date of sale Sale price Selling expenses
House property 1-12-87 75,000 – 1-10-11 15,00,000 20,000
Personal Jewellery 1-12-78 12,000 20,000 1-11-11 3,00,000 4,500
Listed debentures 1-12-06 50,000 – 1-02-12 2,00,000 1,000
Personal car 1-12-02 30,000 – 1-01-12 12,000 –
Urban agriculture Land 1-12-75 48,000 45,000 1-03-12 4,50,000 30,000

He purchased a new agriculture land on 31.03.2012 for Rs. 1, 00,000.

( CIIs: 1981-82 =100; 1987-88=150; 2002-03=447; 2006-07=518;2011-12=785)

 

20)  Compute income from other sources of Dr.Gokak who held the following investments in P.Y. 2011-12.

  1. a) 1, 10,000, 10% central Government Securities.
  2. b) 4, 00,000, 10% commercial securities.
  3. c) 8, 000 (gross) received as interest on public Ltd. Co., securities. (listed)
  4. d) 7, 200 received as interest on Karnataka Govt., securities.
  5. e) 3, 600 received as interest on XYZ Ltd., (listed).
  6. f) 3, 00,000, 13.5% securities of X Co Ltd. (Unlisted).
  7. g) 3, 50,000, 11% securities on a paper mill Co., (listed).
  8. h) Interest on post office savings Bank A/c- Rs. 6, 500.
  9. i) Dividend received from Carona Ltd., (Gross) Rs. 32, 000

For purchasing securities of X Co., Ltd., he took a loan of Rs. 2, 50,000 at 12% p.a. This loan was taken from his friend in. UK. The interest has been paid in UK but, no TDS is made. Bank charged Rs. 2, 000 as collection charges.

During the year he also got a prize in Karnataka State lottery. The net amount received by him was Rs. 2, 80,000. Interest is payment on 1st July and 1st January, every year.

 

21)  Sh. S.K. Basu is in service in Calcutta (Population above 25 lakhs) drawing a monthly salary of Rs. 15, 000 p.m. He is also provided with a free unfurnished flat, for which employer pays a rent of Rs. 2, 500 p.m. He contributes 10 percent of his salary to recognised provident fund. The interest @8% on his provident fund account for the year ended 31st March 2012 amounted to Rs. 2, 500. He is also the owner of a house which is let out a monthly rent of Rs. 2, 500. His expenses for above here:

Rs.

(a)  Municipal taxes                                                                       3, 000

(b)  Interest on loan for construction of the house                     6,600

(c)  Repairs                                                                                          500

He has also interest on Govt. securities amounting to Rs. 14,000 ( Gross).

He has also received a share from a firm assessed as firm of Rs. 5, 000 and his share of firm’s tax amounts to Rs. 600. He has paid life insurance premium for a policy on his own life Rs. 700. He paid to P.M. National Relief Fund Rs. 200.

 

Compute the Total income of Shri S.K.Basu.

 

Section – D     

                           

  1. IV) Answer the following compulsory question. (1X15=15)

 

22) Miss Ashitha submits the following details for the PY 2011-2012

Rent received from let out house Rs. 6, 000 per month.

Municipal taxes Rs. 500 p.a.

She is also employed in a private organisation

Where she gets a salary of a Rs. 14,000 per month

Taxable short term capital gain Rs. 15, 000

Taxable long term capital gain Rs. 35,000

She earned a lottery income of Rs. 10,000.

She donated Rs. 5,000 for National Relief Fund.

She paid a LIC premium on her life Rs. 8, 000

She contributed Rs. 10, 000 towards mediclaim insurance policy.

 

Compute her Total Taxable Income & Tax liability for the A.Y:2012-13

 

 

 

 

St. Joseph’s College of Commerce B.Com. 2014 VI Sem Income Tax – II Question Paper PDF Download

by
  1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

End Semester Examination –  April 2014

B.Com – VI Semester

INCOME TAX – II

Time: 3 Hours.                                                                                                  Max Marks: 100

Section – A

  1. Answer ALL the following questions:             (10 x 2 =20)

 

  • What is meant by grossing up? Explain two situations under which it is done.
  • Mention 4 assets which when transferred do not result in capital gain.
  • Explain deduction u/s 80 GG.
  • From the following information of Mr. Vishwa, Compute the taxable capital gain for AY 2013-14
  1. Cost of acquisition of a residential house in 1993-94 – Rs 3,20,000
  2. Sale consideration on 1/7/2012- Rs 21,00,000
  3. Cost of acquisition of a new house prior to date of filing return- Rs 6,00,000
  4. CII for 1993-94- 244, CII for 2012-13- 852
  • Explain the tax provisions relating to preliminary expenses.
  • What is meant by composite rent? Explain its tax treatment.
  • Vivek’s Gross Total Income for PY 2012-13 was Rs 5,00,000, he made the following donations, compute his taxable income
  1. National Foundation for Communal Harmony- Rs 15,000
  2. Donation to municipal corporation for promotion of Family Planning- Rs 40,000
  3. National children’s Fund- Rs 5,000
  4. Donation to a minority community corporation (notified)- Rs 25,000
  • What is meant by ‘unabsorbed depreciation’? Explain its tax treatment relating to set off and carry forward.
  • Mention 4 expenses deductible u/s 57
  • Ashok received a sum of Rs 5,00,000 the details of which are as follows:
  • From relatives- Rs 1,00,000
  • From an unregistered charitable institution in connection with compensation for floods- Rs 50,000
  • Rs 1,50,000 received from friends on the occasion of his birthday
  • Rs 2,00,000 received from a neighbor who is on his death bed

Determine the amount chargeable to tax.

 

Section – B

  1. II) Answer any FOUR Each carries 5 marks.      (4×5=20)

11) Mr. Y spent following amount on scientific research. Calculate the amount which he can debit to P & L A/c during assessment year 2013-14:                                                                                    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 Exp. On land required for research Rs 5,40,000.                                                            c) Capital Exp. On building and plant and machinery required for research Rs                6,60,000.

 

12) Ram sells a residential house in Mumbai for Rs 6 lakhs on May 1st, 2012, its cost of acquisition in 1981 being Rs 30,000.On July 20th, 2012 he purchased a new residential house for Rs 2,10,000 in Meerut. On July 30, 2013, he deposited Rs 1,20,000 in Capital Gains Account Scheme. Compute the amount of exempted capital gain under the Income Tax Act C.I.I for 1981-82 is 100 and for 2012-13 is 852.

 

13) Compute Income from other sources of Shri Vikas for the assessment year 2013-14:                     (i) Dividend from UTI Rs 5,000.                                                                                                     (ii) 5% Interest from Post Office Saving Bank Rs10,000.                                                                     (iii) Interest on Fixed Deposit from Punjab National Bank Rs 7,000, income credited to his account.                                                                                                                                                 (iv) Rs 30,000, 7% Debentures of JCT Mills Ltd.                                                                            (v) Rs 50,000, deposit in Haryana Financial Corporation at 12% interest p.a.                              (vi)  Rs 5,200 interest received on National Development Bonds.                                                      (vii) Rs 1, 00,000, 8% Tax free commercial securities.                                                                        The bank charges 2% commission on collection of net amount of interest and dividend.

 

14) Mr Varun Rampal whose gross total income is Rs 70,00,000(Rs 20,00,000 as long term capital gain) makes the following donations during the previous year 2012-13

  Rs
P.M National Relief Fund 1,25,000
National Defence Fund 2,50.000
Municipal Corporation 1,25,000
C.M.C Ludhiana for promotion of Family planning 1,70,000
Mr.Sunil Dutt- a social activist for charity purpose    50,000
National Children Fund    40,000
Jawahar Lal Nehru Memorial Fund 2,50,000
To temple of public worship for repairs(notified) 4,00,000

Compute his total income for the assessment year 2013-14.

15) Mr. X a resident, is a practicing chartered accountant. He also runs a private accountancy coaching institute. He keeps his accounts on cash basis and his summarized cash account for the year 2012-2013 is as under:

  Rs   Rs
Balance b/d 13000 Office expenses 24,000
Income from other accounting work 1,25,400 Office telephone bills 7,000
Audit fees 2,14,700 Municipal taxes (property) 4,000
Institute fees 6,100 Institute expenses 1,800
Examiner’s fees 4,600 Misc. expenses 41,500
Withdrawal from PPF 50,000 Membership & certificate fees 1,200
Interest on investments (TDS @10%) 18,000 Life insurance premium 17,000
Agricultural income 10,000 Income -tax 22,500
Rent from property let out for residential purpose 48,000 Motor car purchased 1,80,000
    Motor car expenses 9,600
    Insurance of property 840
    Balance c/d 1,80,360
  4,89,800   4,89,800

On the basis of above information, compute his professional income for AY 2013-14.

  1. One third of motor car expenses are in respect of his professional practice
  2. Depreciation @ 15% for motor car is Rs 27,000
  3. Expenses include Rs 6,000 paid as stipend to trainees and balance are personal expenses
  4. He purchased a computer on 30-11-2012 for Rs 54,000 and for this he took a loan of Rs 50,000 @ 15% p.a.

 

16) Explain the powers of an Assessing Officer.

 

Section – C

III) Answer any Three questions.  Each carries 15 marks.                                (3×15=45)

 

17)  Mr. G submits the following information about sale of assets during the previous year 2012-2013.  Calculate Taxable Capital Gains.

 

 

 

Asset Residential House Jewellery Listed Debentures
Date of acquisition

C.I.I

Cost of acquisition

Date of sale

Sale price

 11-3-1988

150

Rs 2,80,000

15-5-2012

20,00,000

 1-7-1994

259

70,000

17-5-2012

4,00,000

 12-4-2004

480

2,00,000

16-5-2012

4,00,000

 

Investment  Date of acquisition Amount invested
Residential House

Bonds of Rural Electrification Corporation

 19-11-2012

16-11-2012

 13,00,000

1,20,000

 

18) From the particulars given below calculate the amount of depreciation available during the assessment year 2013-14.

  Rs
Car used for Taxi service[30% Block]

W.D.V as on 1-4-2012

New car purchased on 1-5-2012

Sale price of a car sold in Dec 2012

Another taxi purchased on 1-11-2012

  

4,60,000

3,20,000

1,35,000

2,80,000
Furniture of Meeting Hall[10% Block]

W.D.V as on 1-4-12

Sale price of an item of furniture sold in Jan 2013(its WDV was 36,000)

New items of furniture purchased in Feb 2013

  

1,60,000

20,000

96,000
Office Equipment:[15% Block]

W.D.V as on 1-4-12

Cost of new typewriter on 1-10-2012

Sales price of two old typewriters

  

90,000

10,000

6,500

A car who’s W.D.V as on 1-4-2012 was Rs 36,000(not included in WDV as on 1-4-12) was sold on 1-3-2013 for Rs 20,000. A new car was purchased for Rs 5, 60,000 on 1-4-2012. Another car vehicle costing Rs 6, 00,000 was added on 1-12-2012.

 

19 a)Mr. Shivanand has the following investment in the PY 2012-13:

(i) Rs 11,000, 10% Kerala State Govt. Loan

(ii) Rs 30,000, 13.5% Debentures of HMT Ltd

(iii) Rs 35,000, 11% Securities of a Textile Mill

(iv) Rs 36,000, 10% tax free commercial securities

(v) Rs 3,580 received as interest on Tamil Nadu Govt securities

(vi) Rs 1,500 received as interest on securities of a Paper Mill

(vii) Rs 4,500 received as interest on securities of a Sugar Mill.

 

During the PY 2012-13 he purchased Rs 50,000, 7% capital investment Bonds on 1/10/2012.For this purpose he borrowed Rs 30,000 from Bank at 15% p.a. 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 3,000 as director’s fees. His other incomes are:

  • Winning from lottery Rs 25,000
  • Income from agriculture in Sri Lanka Rs 10,000
  • Winning from horse race Rs 15,000
  • Interest on Post Office Savings Bank Account Rs 2000

Find out his taxable income from other sources for the AY 2013-14

 

 

19 b) X is an advocate by profession. From the information given below determine the income of X for AY 2013-14.

(i) On April 30, 2012, he purchases 10 paintings of Raja Ravi Verma for Rs 9, 00,000 (fair market value is however, Rs 35, 00,000). These paintings are purchased from an advocate (who is not a registered dealer of paintings). Upto 31/3/13 these paintings are not sold.

(ii) Income of X from legal profession is Rs 60, 00,000 during the PY 2012-13

(iii) On 30/6/12, he purchases jeweller from a person (other than registered dealer) for                Rs 8, 00,000(fair market value is Rs 9, 10,000). In December 2012, the jeweller is transferred for Rs 9, 50,000.

(iv)Minor son of X gets gift of Rs 75,000 from his maternal uncle on his 9th Birthday

  • Minor daughter of X gets gift of Rs 60,000 from friends of X and Mrs. X on her 5th birthday
  • On December 10, 2012 X purchases a Tagore painting from Jain Art gallery, Cochin. Jain Art gallery is a registered dealer. The painting is purchased under invoice no 485 issued by Jain art gallery and the invoice price/purchase price is Rs 5, 00,000. However the same painting will not be available for less than Rs 7, 50,000 from any other gallery.
  • On 15, December 2012, X purchases jeweler from Tanishq (registered dealer under VAT). The invoice price is Rs 3, 70,000. However the same jewellery will not be available for less than Rs 4,40,000 from any other jewellery shop

 

20) Mr. Kumar of Bombay submits the following Trading & Profit & loss a/c for the year ended 31/3/2013. He is also in employment with a cinema company in Bombay. Compute the taxable income for AY 2013-14

  Rs   Rs
To opening stock 60,000 By sale 4,20,000
“    Purchases 3,90,000 “  closing stock 80,000
“  Freight 15,000    
“  gross profit 35,000    
  5,00,000   5,00,000
To salaries & wages 14,800 By Gross profit 35,000
“  rent & taxes 3,800 “  Dividends on shares of co-op society 2,000
“  household expenses 2,400 “  Rent from building let out 4,800
“  income- tax 400    
“ advance income tax 200    
“  sales tax 400    
“ donations 500    
“  life insurance premium 1,800    
“  audit fees 200    
“  reserve for bad & doubtful debts 680    
“  bad debts 420    
“  miscellaneous expenses 600    
“  depreciation 500    
“  net profit 15,100    
  41,800   41,800

The following information is also supplied by him;

  1. He received a salary of Rs 12,000 from the cinema company and has contributed 15% of his salary to a RPF.
  2. Purchases include Rs 5000 as advance to his supplier in March 2013 against goods to be delivered in April 2013
  3. Rent & taxes include Rs 1800 being municipal taxes paid for the building let out. Taxable income from house property (computed)- Rs 2,100
  4. Premium is paid on his life policy of Rs 15,000.
  5. Donation was given to a family planning institution in India
  6. Miscellaneous expenses include Rs 400 paid to an approved rural development fund
  7. The W.D.V of the business furniture on 1/4/2012 was Rs 16,000 out of which an item of furniture was sold for Rs 10,000
  8. He paid Rs 5000 to local college (which is an approved institution) for its building.

 

21) Write a note on – a) Commissioner of Income Tax

  1. b) Types of Assessment
  2. c) Tax provisions related to gifts received

 

Section – D

  1. IV) Compulsory Question:                                                        (1 x 15=15)

22) Compute the taxable income and tax liability of X (63 years) for AY 2013-14

  Rs
Net income from computer hardware business 17,30,000
Interest on post office savings bank account 13,000
STCG on transfer of land 6,24,000
LTCG on house property (computed after indexation) 5,55,000
Winning from horse race (net) 57,400
Loss from betting 10,000
Interest on bank fixed deposits:

-in the name of minor son

-in his own name

-in the name of minor daughter

-in the name of major unmarried daughter

  

600

40,000

3,200

60,000
Expenditure incurred for the medical treatment of his 67 years old elder brother(dependent on X, being a person with disability) 8,000
Repayment of loan taken for part time studies of major daughter for graduate course in management (loan is taken from a notified charitable institution) 80,000
Payment of interest on the aforesaid loan 17,000
Donation to the aforesaid notified charitable institute 5,000
Brought forward loss of a discontinued business pertaining to the AY 2009-10 40,000
Purchase of a work of art on 1st nov 2012 from a friend for Rs 84,000 (market value is however Rs 3,00,000) 84,000
Purchase of a painting on 1st December 2012 from a registered dealer for Rs 60,000 (invoice price of Rs 60,000. However, a similar painting is not available for less than Rs 3,00,000) 60,000
Payment of a disputed sales tax liability of the PY 2011-12 pertaining to computer hardware business (not yet deducted from the income given above) 34,000
Deposit in PPF account 10,000

 

 

St. Joseph’s College of Commerce B.B.M. 2014 VI Sem Income Tax- II Question Paper PDF Download

by
  1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

End Semester examination – APRIL 2014

BBM – VI semESTER

Income Tax- II

Duration: 3 Hrs                                                                                                Max. Marks: 100  Section – A

  1. Answer ALL the questions. Each carries 2 marks.                                             ( 10 x 2 = 20)
  2. Write the tax treatment for arrears of rent under Income from House Property
  3. To what extent the following are allowable deductions in computing the income of business carried on by Mr. A
  • Entertainment expenditure incurred during the previous year ending 31-3-2013 is Rs. 50000
  • Daily allowance given to Mohan an employee is @ 2000 per day. He was on tour for 5 days and was given Rs 10000 as daily allowance during the previous year 2012-2013.
  • Ten items were presented during the previous year 2012-2013 on advertisements each costing Rs. 2000/-
  • Income tax deposited in advance during the previous year 2012-2013 amounted to Rs. 10000
  1. What is transfer u/s 2 (47)
  2. Find out the indexed cost of following long term capital assets if they are sold during the previous year 2012-2013
SL.NO Asset Year of purchase Cost FMV 1/4/81
1

2

3

4

 Jewellery

Bonds

House

Plot inherited in 85-86

 84-85

91-92

75-76

Acquired by father in 79-80

 1,60,000

2,00,000

1,50,000

1,00,000

 –

–

4,00,000

2,00,000

 

CII 84-85 is 125,      1985-86 is 133,     for  91-92 is 199 and 2012-2013 is 852

 

  1. What are bond washing transactions? Give two examples
  2. Explain any two exemptions available for Long term capital gains.
  3. When an individual is assessable in respect of remuneration of spouse (Sec 64 (1))
  4. Can revised return be filed? Explain
  5. What is a defective or incomplete return
  6. Explain Intra head adjustment and inter head adjustment of losses with exceptions

Section – B

  1. Answer any FOUR Each carries 5 marks.                                          (4 x 5 = 20)
  1. The following are the particulars of assets at the beginning of the year
  WDV as on 1/4/2012 Rate
Building (non residential) 10,00,000 10%
Building (Residential) 5,00,000 5%
Furniture 1,00,000 10%
Plant and Machinery 15,00,000 15%
Motor cars 1,00,000 15%
Trucks used for own business 27,000 15%

Machinery worth Rs. 5, 00,000 was purchased and installed on 14/10/2012.  One machine was sold for Rs. 45,000 during the year.  The Assessee is engaged in the business of manufacturing fertilizers using Indian technical know how

One residential building was destroyed by fire during the year for which insurance company accepted a claim for Rs. 60,000

Calculate the amount of depreciation for the PY 31-3-2013.

  1. What is dividend?  Explain dividend u/s 2(22)
  2. Compute income from other sources from the particulars given below:-
  • Interest on deposits with a company Rs. 10,000
  • University remuneration on working as examiner Rs. 6000
  • Royalty for writing books Rs.60,000

He claims to have spent Rs. 20,000 on writing these books

  • Dividend declared by R Co. 1/3/2013 but paid on 1/5/2013 Rs. 6000
  • Interim dividend paid on 1/5/2012 Rs. 3000
  • Stake money on race horses Rs. 1,50,000

Horses are maintained by him and expenses on maintenance of these horses are Rs. 2, 40,000

  • Family pension Rs. 36,000.

 

  1. Mr.Varun Rampal whose gross total income is Rs. 70,00,000 (Rs. 20,00,000 as long term capital gain) makes the following donations during the previous year 2012-13

 

  • PM national relief fund Rs. 1,25,000
  • National Defence fund Rs. 2,50,000
  • Municipal corporation Rs. 1,25,000
  • CMC Ludhiana for promotion of Family planning Rs. 1,70,000
  • Sunil Dutt – a social activist for charity purpose Rs. 50,000
  • National Children Fund Rs. 40,000
  • Jawaharlal Nehru Memorial fund Rs. 2,50,000
  • To temple of public worship for repairs (notified) Rs. 4,00,000

Compute his total income for the AY 2013-2014

 

  1.  Explain the powers and functions of the Commissioner of Income Tax
  2. MR.Rawat gives you the following particulars from his accounts for the year ended 31/3/2013
  • Net profit as per P&L account (without charging the following items) Rs. 2,75,000
  • Expenditure on family planning Rs. 45,000
  • Lump sum consideration for purchase of technical knowhow developed in government laboratory Rs. 90,000
  • Entertainment expenditure Rs 30,000
  • Expenditure on acquisition of patent right Rs. 84,000
  • Expenditure on advertisement paid in cash Rs. 18,000
  • Provision for excise duty Rs. 45000 (He paid Rs. 20,000 on 27/6/2013 and Rs. 7000 on 10/11/2013.  Due date of filing return Rs. 31/7/2013)
  • Amount paid to Rajasthan University for an approved Research programme in the field of social science not connected with his business Rs. 32,000

Compute his business profit for the year ending 31-3-2013

 

Section – C

  • Answer any THREE  Each carries 15 marks.                                  (3 x 15 = 45)
  1. Mr. G submits the following information about sale of assets during the previous year 2012-13
Asset Residential house Jewellery Listed debentures
Date of acquisition

CII

Cost of acquisition

Date of sale

Sale price

Investments:

Residential house

Bonds of REC

 11-3-1988

150

Rs. 2,80,000

15-5-2012

Rs. 20,00,000

Date of acquisition

19/11/2012

16/11/2012

 1/7/1994

259

Rs. 70,000

17/5/2012

Rs. 4,00,000

Amount invested

Rs. 13,00,000

Rs. 1,20,000

 12/4/2004

480

Rs. 2,00,000

16/5/2012

Rs. 4,00,000

Calculate Taxable Capital Gains for the AY 2013 – 14

  1. From the particulars of income of Sri Madan Mohan, compute his gross total income for the AY 2013-2014.
  • He owns an agricultural land in Bangladesh from which he earned an income of Rs. 6500
  • He owns a plot of land in Dharwad which is let out for Rs. 1200 pm for trading purpose
  • He has a building near agricultural land in a village in India. It is let out for Rs. 900 pm and used for storing agricultural equipments and for supervision of agricultural work
  • He received Rs. 12500 during the year as management consulting fee
  • He has a quarry in Ankola. He has let it on a royalty of 50 paise per ton of stone raised.  During the year 14600 tons of stone was raised.  He spent Rs. 450 to earn royalty
  • He has let machinery and furniture at Rs.3000 pm. He spent Rs. 1000 on the repair of these assets.  Depreciation allowed on these assets Rs. 6000
  • He lives in a rented house paying a rent of Rs. 2000 pm. He has sublet 40% of this house at a rent of Rs. 1500 pm.  He has paid Rs. 1000 as municipal tax on the house and spent Rs. 500 on the repairs of the whole house
  • He has received an amount of Rs. 70,000 as lottery prize on 1/11/2012
  • He borrowed Rs. 30000 on 1/6/2012 from a bank @ 15% p.a interest. He invested the money in the purchase of equity shares of public limited company.  During the year he has not received any dividend from the company.

 

  1. From the following particulars of income of Shri M Shaw during the year 31-3-3013 ascertain his total income tax for AY 2013-2014
  • As a secretary of a company, he received salary at Rs. 16000 per month and a house rent allowance of Rs. 3000 per month. He is living in a house for which he pays Rs. 4000 p.m
  • He had a house property which was let out at Rs. 2000 p.m for which he had to pay Rs. 500 as ground rent and Rs. 167 as insurance charges. The house was subject to local tax at Rs. 2000 per year
  • He owned a residential house since 1965 which he sold during the year at a profit of Rs. 2500
  • He had some agricultural lands in the village where from he received an income of Rs. 4200
  • During the year he received Rs. 750 as interest from savings account in the bank and Rs. 3550 interest on postal saving bank account
  • He was a gambler and during the year he earned an income of Rs. 5900 from gambling
  • From a mutual fund his dividend income is Rs. 3000
  • He earned Rs. 27500 as interest from government securities
  • He had a half share in an AOP and his share of profit was Rs. 7200
  • He insured his life and paid Rs. 9900 as premium and donated Rs. 20000 for promotion of family planning. AOP has no such member whose individual income exceeds the exemption limit.
  1. Write short notes on:
  • Central board of direct Taxes
  • Commissioner of Income tax
  • Deputy commissioner of Income tax

 

  1. Mr. Prakash is a small businessman.  He gives you the following details from the books of accounts for the year ending 31-3-2013
  1. Computed net profit (after charging the following )Rs. 55,000
  2. Provisions and reserves debited to profit and loss account
  • Provision for doubtful debts Rs. 30,000
  • Depreciation reserve Rs. 40,000
  • Household expenses Rs. 60,000
  1. Donation to Prime Minister’s National relief fund Rs. 20000, other charitable donations Rs. 40000
  2. Cheques issued for purchases Rs. 20000
  3. OYT deposit Rs. 10,000
  • Advertisement expenses Rs. 5000 spent on a wooden signboard given to a customer, advertisement gifts to fifty customers at a cost of Rs. 100 each
  • Audit fees Rs. 20000
  1. Patents purchased for Rs. 70,000 during the previous year
  2. Market survey expenses Rs. 8000. Feasibility Report expenses Rs.12000 on a new project of Rs. 1000000
  3. Incomes credited to profit and loss account were
  • Bank interest on FD Rs. 5000
  • Interest on Post office Savings Bank a/c Rs.3000
  • Interest on UTI units Rs. 2000
  • Opening stock is valued at cost + 10% basis where as closing stock is valued at cost -10% basis. Opening stock valued was Rs. 132000 and closing stock was valued Rs. 144000.

Compute the net business income for the AY 2013-2014

Section – D

 

  1. IV) Compulsory question.                                                                 (1 x 15 = 15)

 

  1. Profit and loss account for the year ending on 31/3/2013
Particulars Rs Particulars Rs.
Salaries

Commission to employees

Repairs of P & M

Local taxes of house property

Repairs of vehicles

Expenditure on scientific research (not related to own business)

Depreciation of Van @ 15% purchased and used for scientific research in own field

Amount given to Delhi National Laboratory

Patent right

Preliminary expenses 1/10th debited

Bad debts

Provision for sales tax (paid on  1/11/2013)

Donation to hospital for family planning

Employees health insurance premium

Interest on loan

Contribution to RPF

Entertainment expenditure for customers

Advertisements in TV and magazines

Travelling expenses of employees

Expenses on guest house

Loss due to theft from factory

Loss of furniture due to fire

Penalty paid for excise default

Festival expenses

Purchase of technical know how

Wealth tax paid

Depreciation on an item of P & M sold during the year @ 15%

Depreciation on new  item of P & M acquired on 1/7/2012  @ 15% for 9 months

Depreciation on bus purchased on 1/11/2012 for 5 months @ 30%

Another bus purchased on 1/6/2012 depreciation @30% for full year

Net profit

 

 

 4,50,000

1,50,000

45,000

10,000

20,000

1,30,000

 

 

 

40,000

 

 

30,000

2,00,000

 

40,000

25,000

60,000

 

28,000

 

50,000

 

60,000

53,000

30,000

 

80,000

 

20,000

 

36,000

20,000

15,000

53,000

60,000

2,00,000

68,000

15,000

 

27,000

 

 

45,000

 

 

1,05,000

 

 

1,42,000

 Gross profit

Rent of 40% property let out

Bad debts recovered disallowed earlier

Excise duty recovered – allowed earlier

Gift from uncle

Profit on sale of P & M used for scientific research

Post office saving bank

Profit on sale of export license

Sale price of P&M (15% block)

 19,00,000

40,000

 

20,000

 

15,000

 

40,000

67,000

 

5,000

1,80,000

 

40,000
Total 23,07,000   23,07,000

 

  • Salary includes a lump sum payment of Rs. 1,00,000 paid in cash to an employee
  • Commission of Rs. 70,000 which was due on 31/3/2013 was paid as Rs. 50000 on 15/7/2013 and Rs. 20,000 on 15/11/2013
  • 60% of the house property is used for own business
  • Health insurance premium of employees up to Rs. 20000 was paid in cash
  • Employers contribution to RPF for the month of March 2013 Rs. 2500 due on 15/3/2013 was paid on 31/3/2013
  • Advertisement includes Rs. 14000 on purchase of a neon sign board on 2/10/2012
  • Festival expenses include Rs. 5000 as gifts to his daughter on birth day
  • Rate of depreciation for P&M is 15% and for Buses is 30%
  • Date of filing return 31/7/2013
  • He is also engaged in the business of hiring vehicles

Compute business income for the AY 2013-2014

 

 

 

 

St. Joseph’s College of Commerce Income Tax – II Question Paper PDF Download

by
ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
End Semester Examination – MARCH /APRIL 2015
BBM -VI SEMESTER
M111601: INCOME TAX – II
Duration: 3 Hours                                                                                           Max. Marks: 100
SECTION – A
I) Answer ALL the questions.  Each carries 2 marks.                                   (10×2=20)
  1. Give any four distinctions between short term capital gain & long run capital gain.
  2. The closing stock of Rs. 10,000 is undervalued by 10%. How do you treat the same while computing income from Business.
  3. Determine the Deduction under 80D from the following

a)      Health check up of self, paid by cheque Rs. 6,000

b)     Medical insurance premium of son  paid by cash Rs. 4,500

c)      Medical insurance of wife paid by cheque Rs 12,000

d)     Medical insurance of brother (dependant) paid by cheque Rs 2,000
  4.  Explain provision of 80GG.
  5. Give any two functions of Income Tax Officer.
  6. Elucidate provision w.r.t. preliminary expenses incurred while computing income from business.
  7. List any two securities whose returns are exempted.
  8. Mention any two expenses which are expressly disallowed u/s 58.
  9. How do you tax family pension received?
  10 Explain provisions u/s 54F.

 
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                                  (4×5=20)
  11. Explain provisions with respect to set off and carry forward and setoff of losses.
  12. X transfers the following assets on May 15th 2013

Assets Cost

Rs.

 FMV on

1/4/81

 Sale consideration
Land acquired in 1968 20,000 45,000 485,000
Goodwill of a business Self generated 10,000 175,000
Tenancy rights Self generated 30,000 200,000

Determine capital gain taxable. Does it make any difference if the goodwill is of a profession

 
  13. Determine the amount of Gifts taxable received by X in the previous year

a)      Gift of Rs 75,000 from C who is the cousin of his father

b)     Gift of Rs 2,000 from his mother’s sister

c)      Birthday Gift of a gold chain worth Rs 11,000 from his friend

d)     A house property under will of a person known to him. Stamp Duty is Rs. 1540,000

e)      Purchased 500 shares from a friend outside stock exchange@ Rs.90 per share the market price of the same is Rs. 300.
  14. Compute the amount of deductions admissible u/s 80 G from the following donations made when GTI  is Rs. 600,000

To Gujarat Earthquake  Relief Fund 40,000
To Africa Fund 10,000
To Approved Educational Institutions 15,000
To approved temples 35,000
Clothes distributed to  the poor 5,000
Municipal corporation for promotion of family planning 20,000
To SJCC for helping the poor and needy in  gifts 25,000
   
   
  15.
Dr. S is a Medical Practitioner. He gives you the following information
      `       `
To balance 10,000 By Rent of Clinic 18,000
To consultation fee 60,000 Purchase of Medicines 38,000
Visiting fee 45,000 Staff salaries 24,000
Gifts and Presents 8,000 Surgical equipments 40,000
Sale of Medicines 42,000 Motor car expense 8,000
Dividends 6,000 Purchase of Motor Car 140,000
LIC Maturity 100,000 House hold expense 7,000
Interest from NSC 6,000 Closing balance 2,000
  277,000   277,000

Other information

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

b)     House hold expenses include Rs.6,800  for LIC Premium

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

d)     Closing Stock of Medicine Rs. 12,000 and on 1/4/13 opening stock was Rs. 4,000

Compute Professional Income

 
  16. Explain provisions of additional depreciation allowable under the head Income from business & profession.
 

SECTION – C
III Answer any THREE questions.  Each carries 15 marks.                              (3×15=45)                                                                                                 
  17. Explain a) Powers of CBDT

b) Different types of Assessment                                               (5+10)

 
  18. A starts a business on November 18th 2012. He acquires Plant A whose cost is Rs. 26,000 and rate of depreciation is 80%. He also acquires plant B for Rs. 30,000 rate of depreciation 40%. On May 10th 2013 he sells plant A for Rs. 22,000 and Plant B for Rs. 17,000. Expenditure incurred in connection with transfer of Plant A is Rs. 1,000.

He however acquires the following plants during the previous year 13-14

Plant Date of purchase Cost Depreciation rate
C 30th  April 2013 6,000 80%
D 19th May 2013 12,000 40%
E June 10th 2013 21,000 15%

Compute depreciation for the year  and capital gain if any

 
  19.
Particulars Rs Particulars Rs
To establishment expenses 4,800 By Gross profit 50,840
Rent rates and taxes 2,900 Interest on Government

Securities

 5,200
General charges 750 Rent from House Property 5,400
Household expenses 1,730    
Commission 1,500    
Discount and allowances 450    
Provisions for Bad Debts 1,200    
Postage  &Telegraph 270    
Law charges 450    
Advertising 1,550    
Gifts and Presents 150    
Fire Insurance (goods) 360    
Sales tax 1,250    
Repairs and renewals

(not for business premises)

 480    
Loss on sale of motor car used For private purpose 1,800    
LIC premium 1,790    
Wealth tax 740    
Interest on capital 350    
Audit fee 300    
Interest on bank loan 1,380    
Provision for depreciation 2,500    
Provision for income tax 3,900    
Net Profits 30,840    
  61,440   61,440
Other information:

Actual bad debts written off was Rs. 550

Income tax actually paid was Rs. 4,200

Depreciation allowable Rs.1,700

Advertising expenses include `550 spent on special advertising campaign to open a new shop in the market.

The law charges are in connection with the trade mark.

He carries on business from rented premises half of which is used as his residence.

Rent rates and taxes include Rs, 2,400 paid as premises rent.

Compute Business Income for AY 14-15
   

20.

  

Compute Capital Gain from the following if CII for 13-14 is 939

asset Year of

acquisition

 CII Cost of

acquisition

 FMVon

1/4/81

 Selling

expenses

 Selling

Price
Shop 80-81 100 20,000 40,000 10,000 4,10,000
Jewellery 80-81 100 10,000 50,000   4,95,000
Shares 82-83 109 20,000   2,000 1,90,000
Shares 90-91 182 6,000   1,000 25,000
Plant 82-83 109 4,00,000(WDV)     7,00,000
Residential house 84-85 125 60,000     4,90,000
He invested Rs 20,000 in purchase of new residential house and Rs 2,000 in National Rural Development Bonds  from the sale proceeds.
   

21.

  

From the following particulars compute income from other sources.

Dividends from UTI 17,000
Dividends from Tea Company(60%agriculture income) 3,000
Interim dividends from listed Co declared on 25/2/14 1,500
Dividends from Foreign Co. TDS not yet remitted 4,000
Interest on term deposit in bank received 10,800
Directors fee 2,000
Income from letting out of machinery plant etc

after cessation of business

 30,000
Royalty from mining 10,000
Monthly rent received from subletting a house

The house was taken on rent @ Rs. 200 pm in 1971

Repairs and other  expenses incurred were Rs.3,000

and Rs. 1,000 respectively

 1,000
Winnings from lotteries 25,000
He claims the following expenses: collection charges

for dividends of UTI 300, interest on money borrowed

to purchase shares of tea Co. Rs. 1,000

depreciation and other expenses in respect of Machinery

Rs 5,000

  
 

SECTION – D
IV Case Study                                                                                                           (1×15=15)                                                                                          
  22. Mrs. B provides you the following details:

a.      Taxable Income from Salaries- Rs. 4,50,000

b.      Loss from House Property- Rs.1,25,000

c.       Taxable income from Business- Rs. 65,000

d.     Taxable STCG (other than STCG on transaction liable for STT)- Rs.1,50,000

e.      Taxable income from other source (including casual income Rs.2,75,000; interest on savings bank a/c Rs. 8,500; royalty income on books published Rs.3,60,000)- Rs.8,75,000

f.        Contribution to PPF- Rs.26,000

g.      Payment of Life Insurance Premium- Rs.18,000

h.      Payment made towards group insurance- Rs.960

i.        Deposits made in Unit Linked Insurance Plan- Rs.15,000

j.        Amount invested in National Savings Certificate- VIII issue- Rs.12,000

k.      Amount deposited with National Housing Bank- Rs.12,000

l.        Amount invested in Equity Linked Savings Scheme- Rs.6,000

m.   Repayment of principal amount towards housing loan- Rs.15,000

n.      Tuition fees of 3 children paid @ Rs. 750 p.m. per child- Rs. 27,000

o.      Interest paid on higher education loan- Rs. 42,350

p.     Medical insurance premium paid by cheque- Rs. 16,500

q.      Expenditure incurred towards medical treatment of a dependant relative- Rs. 26,500 (disability being 70%)

r.       Expenditure incurred towards medical treatment of specified disease of dependent relative (senior citizen)- Rs.65,000

s.       Donation to PM’s National Relief Fund- Rs. 25,000

Compute Mrs. B’s total income and tax liability assuming that she does not have capital gains.

 

 

 

 

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

 

 

 

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

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REG NO:

 

 

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESER EXAMINATION – MARCH/APRIL 2016
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. Explain the term Block of Assets.
  2. How to treat bad debts recovered but disallowed earlier?
  3. Define Capital Asset as per Income tax Act of 1961.
  4. What do you mean by Indexed cost of acquisition and Indexed cost of improvement?
  5. State the Standard deduction for Family Pension.
  6. What is Casual Income? What is the rate of TDS for casual incomes?
  7. Explain provisions relating to Deduction u/s 80TTA.
  8. Compare the provisions of the sections 80 QQB & 80 RRB.
  9. Write a note on the different types of Assessments.
  10. Write a note on the powers of the CBDT.
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                          (4×5=20)
  11. Written Down Value (W.D.V) of the block having two machines namely X and Y as on 1.4.2014 is Rs. 6,00,000. Machine Z was acquired on 5.11.2014 for Rs. 3,00,000 and put to use on the same date. Machine Z is sold on 28.3.2015 for Rs. 4,00,000.

(a)      Compute the depreciation allowable for the assessment year 2015-16.

(b)      What will be the amount of depreciation allowed, if machine ‘X’ is sold instead of machine ‘Z’.
  12. An analysis of the profit and loss account and the balance sheet of X as at 31.3.2015 reveal that the following expenses which were due, were though debited to the profit and loss account but have been paid after 31.3.2015.  What will be the tax treatment of the expenses?

1. Sales tax 50,000 20,000 paid on 14.7.2015

30,000 paid on 1.10.2015
2. Excise-duty 1,20,000 40,000 paid on 14.7.2015

40000 paid on 1.10.2015

40,000 paid on 1.11.2015
  13. Dinesh purchased jewellery worth Rs. 80,000 during the year 1984-85. During the year 1990-91, he further purchased jewellery worth Rs. 90,000. All the jewellery was sold by him on 15.5.2014. The jewellery purchased in 1984-85 was sold for Rs. 7,90,000. He purchased a plot of land for Rs. 3,55,000 on 4.1.2015 for construction of residential house. On 15.6.2015 he deposited Rs. 5,00,000 in the Capital Gains Accounts Scheme and further sum of Rs.2,00,000 as on 15.11.2015. He owns only one residential house as on 15.5.2014.

Compute the capital gains for the assessment year 2015-16.
  14. X(42 years ) gives the following information for the previous year 2014-15:

(a)   On 1.12.2014, he gets gift of House A from his friend B (stamp duty value is determined at Rs. 6,00,000)

(b)   On 3.12.2014, he gets gift of House B from C (who is father-in-law of his elder brother) (Stamp duty value is Rs. 40,000, however, current market value is Rs. 65,000).

(c)    On 7.12.2014, X purchases a second hand car for Rs. 70,000from D (market value is however Rs. 3,00,000)

(d)  On 14-12-2014, X purchases a work of art for Rs. 5,00,000 from E (FMV is 5,30,000).

(e)   On 20-12-2014, X purchases Jewellery for Rs. 7,00,000 from F (FMV is Rs. 7,25,000). F is not a registered Dealer.

Write the tax treatment for the above mentioned information.
  15. A submits the following information regarding his income for the previous year 2014-15.

Salary (Computed) 4,15,000
Income from Rent (computed) 48,000
Winnings from lottery (Gross) 15,000
He makes the following deposits/payments during the year:

Contribution towards PPF

 1,10,000
Premium paid in cash on mediclaim policy for his dependent father 8,000
Purchase of listed equity shares of notified company as new retail investor 40,000
Amount paid in cash for preventive health check of himself and spouse 6,000

He has a son being a person with disability, dependent on him, for whom he incurs expenses for his medical treatment and rehabilitation. He also deposits a sum of Rs. 25,000 for the benefit of his son under a scheme framed by the UTI for such a purpose.

Compute his total income and tax liability for the assessment year 2015-16.
  16. From the following particulars of Pankaj from the previous year ended 31st March 2015, compute the income under the head “Income from Other Sources”:

  `
Directors Fee from a company 10,000
Interest on bank deposits 3,000
Income from undisclosed source 12,000
Winnings from lotteries (net) conducted on 25.12.2014 35,000
Royalty on a book written by him 9,000
Lectures in seminars 5,000
Interest on loan given to a relative 7,000
Interest on debentures of a company (listed in a recognized stock exchange) net of taxes paid on 01.01.2015 7,200
Interest on Post Office Savings Bank Account 500
Interest on Government Securities 2,200
Interest on Monthly Income Scheme of Post Office 33,000

He paid Rs.1,000 for typing the manuscript of the book written by him.
SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                      (3×15=45)                                                                                                
  17. Sri Ram Gopal is the owner of a business. Following is his P/L account for the year ended on 31.3.2015:

Establishment charges 5,110 Gross profit 50,870
Rent rates & taxes 2,900 Interest on Government securities (gross) 5,350
Sundry expenses 7,050 Rent form property 5,400
Household expenses 1,880    
Provision for bad debts 1,200    
Loss of sale on motor car (used for private purpose) 1,800    
Insurance premium (including life insurance for Rs. 1,790) 2,880    
Interest on bank loan 1,380    
Provision for depreciation 6,400    
Net profit 31,020    
  61,620   61,620

Additional Information:

(1)   Bad debts written off during the year Rs. 650

(2)   Admissible depreciation as per income tax rules Rs. 1,600

(3)   The Assessee is running his business in a rented property, half of which is used by him for his own residence. Rent of Rs. 2,400 in respect of entire house is included in rent, rates and taxes. The balance of Rs. 500 is on account of municipal tax paid for property given on rent.

Compute the Business Income  of Shri Ram Gopal for the assessment year 2015-16.
  18. A had the following assets which were sold/compulsorily acquired during the previous year.

Particulars Date

Of Acquisition

 Mode

Of

Acquisition

 Date of sale/

Compulsory acquisition

 Sale price/ compensation Cost of acquisition by assessee or previous owner
Gold 1981-82 Self 31.10.2014 12,00,000 1,00,000
Urban agricultural land 1986-87 Self 15.11.2014 17,80,000 2,00,000
Rural agricultural land 1978-79 Gift from father on 1.5.1982 15.12.2014 4,00,000 50,000
Motor car for personal use 1990-91 Self 15.1.2015 1,50,000 80,000
Land and building forming part of Industrial undertaking 15.10.1995 self 15.2.2015

(compulsorily

Acquired)

 6,00,000 4,00,000

(WDV as on 1.4.2014)

A purchased a residential house property on 20.2.2014 by investing Rs. 5,00,000. He purchased an agricultural land on 13.4.2015 for Rs. 1,40,000. He also purchased building for Rs. 1,50,000 on 31.7.2015 to be used for industrial undertaking.  Compute the Income from capital Gain.

 
  19. The following incomes are received by Mr. Mohan during financial year:

Director’s fees 2,000
Income from agricultural land in Pakistan 5,000
Ground rent for land in Pathankot 10,000
Interest on Postal savings bank account 100
Interest on deposits with Industrial Finance Corporations of India 500
Dividend form a foreign company 700
Rent from subletting a house 26,250

 
Rent payable  by Mr. Mohan for the Sub-Let house 12,000
Other expenses on Sub-let house 1,000
Winnings from Horse race (Gross) 12,300
Interest on securities (Gross) 4,000

You are required to calculate income from other sources of Mr. Mohan for the assessment year 2015-16.
  20. Find the net income  in the following cases for the assessment year 2015-16:

  Mrs. X (Rs.) Mrs. Y (Rs.)
Business Income 24,75,000 –
Speculative business income form dealing in equity shares (securities transaction tax of Rs. 1,874 deducted) – 24,75,000
Interest on company deposit 1,00,000 1,00,000
Contribution towards public provident fund 90,000 90,000
Life insurance premium (sum assured: Rs. 6,00,000) (policy taken in June 2014 70,000 70,000
Amount invested in debentures of a notified infrastructure company 6,000 6,000
Donation to a notified public charitable institution 18,000 18,000
Rent for residential house paid at Delhi 2,39,000 2,39,000
Mediclaim insurance premium 30,000 30,000
Age during 2014-15 59 years 50 years
  21. X (32 years), a part-time college lecturer at Bombay, furnishes the following particulars for the assessment year 2015-16:

Rs.

Computed Salary 5,37,600
Examinership remuneration 84,000
Royalty on books for university students 1,92,000
Income from house property 2,10,000
Long term capital gain 2,15,000
Short term capital gain 1,10,000
Interest on government securities 48,000
Bank interest 20,000
Income from tuitions 1,16,000
Contribution of X to Statutory provident fund 46,000
Contribution to public provident fund 41,000
Expenditure on mediclaim insurance premium of dependent grandmother who is resident (age: 67 years) 26,000
Donation to government for the purpose of promoting family planning 1,24,000

 

Determine the net income and tax liability for the assessment year 2015-16
 

  SECTION – D
IV) Case Study                                                                                                             (1×15=15)                                                                                          
  22. From the following Receipts & Payments A/c for Dr. I a medical practitioner, ascertain his taxable income from profession.

 

 

Particulars Rs. Particulars Rs.
To Balance b/d 58,500 By Cost of Medicines 2,20,000
To Loan from Bank 1,00,000 By General Expenses 4,500
To Sale of Medicines 2,65,000 By Motor Car Expenses 60,000
To Consultation Fees 1,60,000 By Salary 12,000
To Visiting Fees 30,000 By Rent of Dispensary 24,000
To Interest on Govt. Securities 36,000 By Telephone & Cell Phone Expenses 5,000
To Rent from House property 80,000 By Household Expenses 16,000
To Gift from Father-in-law 50,000 By Life Insurance Premium 25,000
To Gift from patients 20,000 By Interest on loan 2,000
    By Car Insurance Premium 7,000
    By House property Insurance Premium 5,000
    By Municipal Tax on House property 8,000
    By Travelling Expenses 10,000
    By Charity 1,000
    By Books purchased 25,000
    By Repayment of Housing Loan 88,600
    By Fixed Deposit of SBI 2,50,000
    By Balance c/d 36,400
  7,99,500   7,99,500

Additional information:

a.      ½  of Motor Car expenses are in respect of personal use.

b.      Consultation fees includes a receipt of Rs.60,000 as advance for attending a medical camp in April 2014.

c.       WDV of Motor Car as on 1-04-2014 was Rs.2,50,000 and the rate of depreciation is 15%.

d.      Traveling expenses is not admissible to the extent of 30%

e.       Dr. I is eligible to claim depreciation on surgical equipments and furniture to the extent of Rs.12,500.

f.        Closing stock of medicines Rs.40,000

g.      Books purchased are not annual publications and are eligible for 60% depreciation.

 

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

by
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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