2014 (May)
COMMERCE
(Speciality)
Course: 601
(Direct Tax - II)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full marks for the questions.
1. (a)
Write True or False: 1x4=4
a.
Business outside India and business in India
stand on the same footing for the purpose of computation of income from
business and profession u/s 28 of the Act.
b.
Indexation of cost of capital asset is a must
for all types of capital assets in computing income from capital gains.
c.
Short-term capital loss can be set off from
short-term as well as out of long-term capital gains.
d.
Assets belonging to assesses on the valuation
date are taxable under the Wealth-tax Act.
(b)
Name four expenses which are not allowed as deduction in computing capital
loss. 1x4=4
2.
Write short notes on the following: 4x4=16
a.
Substantial interest.
b.
Corporate assesses.
c.
Perquisites.
d.
Depreciation.
3.
(a) Write about the different expressly admissible deductions allowed under
Section 30 – 36 of the Income-tax Act, 1961 in computing income from ‘business
and profession’. 11
Or
(b)
From the Profit and Loss Account of Mr. Porag for the year ending 31.03.2013,
compute his business income:
Profit
& Loss A/c
|
Dr
|
Rs.
|
Cr
|
Rs.
|
|
To
General expenses
To Bad
debts
To
Provision for bad debts
To
Insurance (house)
To
salary to staff
To
salary to Porag
To
Interest on bank overdraft
To
Interest on loan taken from Mrs. Porag
To
Interest on capital of Porag
To
Depreciation on building
To
Advertisement expenses
To
Contribution to employee RPF
To Net
profit
|
63,400
22,000
21,000
600
36,000
22,000
62,000
4,000
13,000
60,000
8,000
12,000
50,600
|
By Gross
profit
By
Commission
By
Brokerage
By
Sundry receipt
By Bad
debt recovered
(earlier
disallowed as deduction)
By
Interest on deposit with a trust
By
Interest on units of UTI
By
Rent from house property
|
2,65,500
18,600
27,000
22,500
1,000
15,000
13,000
12,000
|
|
|
3,74,600
|
|
3,74,600
|
Other information:
a.
The amount of depreciation allowable under the
Income-tax Act is Rs. 40,200
b.
Advertisement expenses include Rs. 5,000 being
cost of advertisement in new-papers.
c.
Income of Rs. 10,000 accrued during the year
but not recorded in Profit and Loss Account.
d.
Porag pays Rs. 12,000 as premium on his own
life.
e.
General expenses include Rs. 4,500 given to
Mrs. Porag for arranging a party in honour of her friend.
f.
Employers contribution to provident fund for
last two months @ Rs. 1,000 per month has not been paid to appropriate
authority within due date.
g.
Mr. Porag has spent Rs. 8,000 during the year
in attending a marriage party.
4. (a) What do you mean by capital
assets as defined by the Income-tax Act, 1961? What are its types? Discuss how
short-term and long-term capital gain is computed. 2+3+7=12
Or
(b)
During the year ended on 31st March, 2013, Mr. A sold the following
assets:
a.
Shop purchased in 1985 – 86 (cost inflation
index 133) for Rs. 18,000 was sold for Rs. 1,70,000.
b.
Machinery purchased in 1983 – 84 (cost
inflation index 125) for Rs. 50,000 (written down value on 1-4-12 Rs. 35,000)
was sold for Rs. 60,000.
c.
Furniture purchased on 1-5-2012 for Rs. 1,000
was sold for Rs. 1,300.
d.
Machinery purchased on 1-5-2012 for Rs. 10,000
was sold for Rs. 12,000.
e.
Agricultural land in Agra purchased in 1979 –
80 for Rs. 10,000 [(fair market value on 1-4-81 (cost inflation index 100)
being Rs. 15,000] was sold for Rs. 1,60,000.
f.
One residential house purchased in 1987 – 88
(cost inflation index 150) costing Rs. 30,000 was sold for Rs. 2,20,000.
During the year, he bought another house for his residence for Rs.
4,00,000. Compute the amount of taxable capital gain for the assessment year
2013-14. 12
5.
(a) Define the term ‘asset’ for the purpose of computation of net wealth. Name
the assets that are excluded from it. 6+5=11
Or
(b)
What is wealth tax? Who is required to pay it? How is wealth tax computed? 2+2+7=11
6.
(a) Explain the provisions of the income-tax Act, 1961 regarding carry forward
and set-off of losses. 11
Or
(b)
Mr. R. furnishes the following particulars of his income for the previous year
2012 – 13:
a.
Salary income – Rs. 68,000.
b.
Income from house A – Rs. 36,000
c.
Loss from house B – Rs. 24,000
d.
Loss from house C – Rs. 22,000
e.
Profit from business A – Rs. 60,000
f.
Profit from Business B – Rs. 70,000
g.
Profit from share business (speculative) – Rs.
82,000
h.
Loss from silver business (speculative) – Rs.
94,000
i.
Long-term capital gain on sale of shares on
which security transaction tax has been paid – Rs. 22,000
j.
Short-term capital loss on sale of land – Rs.
44,000
k.
Income from card games – Rs. 22,000
l.
Winning from lotteries (gross) – Rs. 60,000
m.
Income from horse race (gross) in Dibrugarh –
Rs. 40,000
n.
Loss from horse race in Jorhat – Rs. 21,000
Compute
gross total income of Mr. R for the assessment year 2013 – 14.
7.
(a) What is tax avoidance? Discuss the differences between tax avoidance and
tax evasion. 3+8=11
Or
(b)
Write note on the following: 5+6=11
a.
Gross qualifying amount.
b.
Tax planning for senior citizens.