2017 (May)
COMMERCE
(Speciality)
Course: 601
(Direct Tax - II)
Time: 3 hours
The figures in
the margin indicate full marks for the questions
(NEW COURSE)
Full Marks:
80
Pass Marks: 24
1.
(a) Write True or False: 1x4=4
1) The
income earned from a smuggling business is taxable under the head of income
from business and profession. True, Whether business
is legal or illegal it is taxable
2) Stock-in-trade,
raw materials, consumable stores held by the assessee for his business and
profession is capital asset. False, excluded
from capital asset
3) Short-term
capital loss can be set off from either short-term capital gain or long-term
capital gain. True
4) Income
from card game, horse race, gambling is taxable under the head of income from
other sources. True
(b) Fill in the blanks: 1x4=4
1) The
maximum qualifying amount of deduction u/s 80C is 1,50,000.
2) Deduction
under Section 80D for health insurance premium paid can be claimed by an individual and HUF.
3) Long-term
capital gain = Net transfer price – Indexed cost of acquisition and Improvement.
4) For
computing depreciation under the Income-tax Act, 1961 intangible assets are
included under 25% block.
2.
Write notes on the following: 4x4=16
a) Meaning
of ‘business’ and ‘profession’ as defined u/s 28 of the Income-tax Act.
b) Long-term
and short-term capital assets.
c) Corporate
assessee.
d) Procedure
to set off of unabsorbed depreciation.
3.
(a) What do you mean by the term ‘depreciation’? What are the conditions
regarding the claim of deduction of depreciation? 4+10=14
Or
(b)
Dr. Arunabh is a medical practitioner. He gives you the following summary of
cashbook for the year ending 31.03.2016:
Summary of Cash book
|
|
Rs.
|
|
Rs.
|
|
To Balance
To Consultation Fee
To Visiting Fee
To Gifts and
Presents
To Sales of Medicine
To dividend from UTI
To Life Insurance
Maturity
Dividend from an
Indian Company
|
10,000
60,000
45,000
8,000
42,000
6,000
1,00,000
6,000
|
By Rent of Clinic
By Purchase of Medicine
By Staff Salaries
By Surgical
Equipment
By Motor Car
Expenses
By Purchase of Motor
car
By Household
Expenses
By Closing Balance
|
18,000
38,000
24,000
40,000
8,000
1,40,000
7,000
2,000
|
|
|
2,77,000
|
|
2,77,000
|
Information:
a) 50%
of the motor car expenses are incurred in connection with his profession. Car
was purchased in December 2015.
b) Household
expenses include Rs. 6,800 paid as insurance premium.
c) Gifts
and presents include gift worth Rs. 3,000 from relatives.
d) Closing
stock for medicine Rs. 12,000 and stock on 01.04.2016 for the Assessment Year
2016-17. 14
4.
(a) Discuss the provisions regarding exemption of long-term capital gain under
Section 54 of the Income-tax Act, 1961. 14
Or
(b)
Mr. Anuraag owns two residential houses one at Jorhat and other at Dibrugarh.
He submits the following information about sale of assets during previous year,
2015-16 (CII-1081)
|
Assets
|
Residential House
|
Plot
|
Jeweler
|
||
|
Date of Acquisition
Cost of Acquisition
FMV as on 01.04.81
Date of Sale
Sale Price
|
01.03.79
Rs. 1,40,000
Rs. 2,00,000
15.06.15
Rs. 24,00,000
|
01.11.90
Rs. 1,60,000
-
16.06.15
Rs. 11,20,000
|
03.04.2000
Rs. 80,000
-
17.06.15
2,80,000
|
||
|
|
|
|
|
||
|
Investments
|
Date of Acquisition
|
Amount Invested (Rs.)
|
|||
|
Residential House
Bonds of National
Highway Authority of India
|
19.12.15
12.12.15
|
13,00,000
1,00,000
|
|||
|
|
|
|
|||
Cost Inflationary
Index for
1990-91 – 182
2000-01 – 406
2001-02- - 426
2015-16 – 1081
You
are required to compute taxable capital gain of Mr. Anuraag for the Assessment
year, 2016-17. 14
5.
(a) Discuss in detail the procedures as per the Income-tax Act regarding
set-off of losses within the head and outside the head. How are brought forward
losses set off? 7+7=14
Or
(b)
Mr. A submits the following information of his incomes and losses for the year
ending 31.3.2016.
|
|
Rs.
|
|
1. Salary income
(computed)
2. Income from house
property:
House A (income)
House B (loss)
House C (self-occupied) (loss)
3. Income from
Business:
Cloth business (profit)
Hardware business (loss)
Speculation profit
Speculation loss
4. Capital gains:
Short-term gain
Short-term loss
Long-term gain
5. Other sources:
Income from betting
Loss from card games
Income from card games
Interest on securities
|
24,000
10,000
40,000
28,000
10,000
12,000
12,000
17,000
8,000
24,000
8,000
12,000
6,000
9,000
8,000
|
Compute
the Gross Total Income of Mr. A after making inside and outside head adjustment
of losses. You are also to show how much loss is to be carried forwarded to set
off against future income. 14
6.
(a) (i) Discuss any seven approved savings schemes which are eligible for
deduction under Section 80C of the Income-tax Act, 1961. 7
(ii)
From the following particulars of the Mr. X, compute the amount of deduction
u/s 80C for the previous year, 2015-16 7
|
|
Rs.
|
|
1. Life Insurance
Premium paid during the previous year, 2015-16
On his own life
On the life of his wife
On the life of his father
All life policies
were taken in 2010
2. Contribution
towards RPF
3. Deposit in public
provident fund
4. Group insurance
premium
5. Invested in NSC
(VIII issue) out of his Agricultural Income
6. Repayment of loan
taken from SBI for construction of his residential house Rs. 4,000 p.m. which
includes Rs. 1,000 p.m. interest.
7. Accrued Interest
on NSC (VIII issue)
|
30,000
10,000
10,000
24,000
45,000
3,000
10,000
4,000
|
(b)
Explain the methods commonly used by tax payers to minimize tax liability. 14
(OLD COURSE)
Full Marks: 80
Pass Marks: 32
1.
(a) Write True or False: 1x4=4
1) The
income earned from a smuggling business is taxable under the head of income
from business and profession.
2) Stock-in-trade,
raw materials, consumable stores held by the assessee for his business and
profession is capital asset.
3) Short-term
capital loss can be set off from either short-term capital gain or long-term
capital gain.
4) Income
from card game, horse race, gambling is taxable under the head of income from
other sources.
(b)
Fill in the blanks: 1x4=4
1) The
maximum qualifying amount of deduction u/s 80C is _____.
2) Deduction
under Section 80D for health insurance premium paid can be claimed by an
individual and _____.
3) Long-term
capital gain = Net transfer price – _____.
4) For
computing depreciation under the Income-tax Act, 1961intangible assets are
included under _____ block.
2.
Write short notes on any four of the following: 4x4=16
a) Admissible
deduction.
b) Deemed
income chargeable to tax.
c) Unabsorbed
depreciation.
d) Exempted
wealth.
e) Tax
planning for salaried assessee.
3.
Mr. Rajang Raje proprietor of RR & Co. provides you the following
information for the year ended 31.03.2015:
Profit & Loss A/c
For the year ended
31.03.2015
|
|
Rs.
|
|
Rs.
|
|
To Salaries
To Bad debts written
off
To Printing Expenses
To Conveyance
To General Expenses
To Sales and Tax
Penalty
To Fire Insurance
Premium
To Wealth Tax
To Depreciation
To Repair and
Maintenance
To Net Profit
|
1,50,000
10,000
11,000
30,000
43,000
9,000
4,000
6,000
20,000
8,000
2,84,000
|
By Gross Profit
By Income-tax refund
(including interest of Rs. 2,000)
By UTI Dividend
By Gift from Friend
|
5,07,000
18,000
40,000
10,000
|
|
|
5,75,000
|
|
5,75,000
|
Additional
Information:
1) Depreciation
as per the Income-tax Rule Rs. 22,000.
2) General
expenses include payment of labour charges for business Rs. 23,000 paid in cash
on 16.08.14.
3) Salaries
include salary to proprietor Rs. 48,000.
4) Printing
expenses include Rs. 8,000 for printing of marriage invitation cards for his
son.
5) He
paid tuition fees in a school of Rs. 15,000 for his school going daughter.
6) He
paid interest of Rs. 45,000 on educational loan taken from Bank of India for
his son, pursuing postgraduate degree in medicine from the University of
Calcutta.
You
are required to compute his total taxable income for the Assessment Year,
2015-16. 11
Or
What do you mean by the term ‘depreciation’? What are the
rules regarding grant of deduction for depreciation? 3+8=11
4.
How would you determine cost of acquisition and cost of improvement u/s 49?
Describe the procedure of ascertaining short-term capital gains and long-term
capital gains. 3+3+3+3=12
Or
Explain
the concept of Transfer under the head capital gains. Mention the transactions
which are not regarded as transfer. 8+4=14
5.
Explain the provisions of the Income-tax Act, 1961 regarding carry forward and
set-off of losses. 11
Or
Explain
the process of setting off and carry forward of losses in computing gross total
income with exception. 11
6.
What are the assets mentioned in Section 2(ea) of the Wealth-tax Act, 1957?
Explain. 11
Or
What
are the deemed assets and exempted assets as per the provisions of the
Wealth-tax Act, 1954? Discuss in detail.
7.
How are deductions made in respect of the following Sections of the Income-tax
Act, 1961? 6+5=11
a) Deduction
under Section 80C and 80D.
b) Deduction
in respect of certain undertakings of North-Eastern States (Section 801 E)
Or
How
is tax liability computed for a salaried person? Explain. 11
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