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c.com CMA June 2013 Direct Tax 9999 22 7381 1. Section 56(2) Income from House Property. K . Pr 99 | C K a 9 2 M Ind . b.K. ANALYSED & EXPLAINED BY CS K.2 CMA June 2013 Direct Tax Solution FULLY SOLVED. a. b. 25 2. Section 5 & 9 Other Sources. AGRAWAL as per AY 2013-14 1. a. b. c. a.c o = o fo Di C ry m r C re S + c K 0 9 A t & . c. a. Good question Rates of tax. Section 6(1) & (6) Incidence of Tax. Appeals & Revision Charitable Trusts Business or profession Section 10 DTAA HRA Advance Tax TDS Presumptive basis of taxation Agricultural Income Business or Profession Business or Profession Q.2 2 3 10 Topic. (PGBP 21. b. d. P 33% | T 67% Theory Theory Practical Practical Theory Practical Practical Theory Practical Theory Practical Theory Theory Practical Practical Theory Theory Theory & Practical Theory Theory Theory From last 6 attempts this book has proved that 100% questions can be attempted with ease.5%) Multiple type questions Fill in the blanks RS of Individual. 15 Ca Co now ll fo mp led tax r u le g lti te T e + byk m ate ax The k. 15 7. c. b. b.N a. 15 6. 15 4. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Question 1 is compulsory. Attempt any 5 questions from the remaining 8 questions 25 + (15 x 5) = 100 Marks 13 12 3 7 5 8 4 3 5 5 5 5 5 5 4 4 3 2.taxbykk. Good question Tax deducted at source Wealth Tax Assessment procedure. a. 15 5. c. b. a. 15 3. c.
..... (x) No tax is deductible if the amount of rent credited or paid during the financial year does not exceed rupees ... A (B) Mrs.50...c o = o fo Di C ry m r C re S + c K 09 A t & ... c... 194 I of the Income Tax Act 1961.. The value of the jewellery as on 31st March 2013 is includible in the net wealth of (A) Mr... 54GB of the Income Tax Act 1961 would be (A) NIL (B) 10% of capital (C) 50% of (D) 100% of gain capital gain capital gain (xii) Amount received towards share application money when not properly explained it is (A) taxable u/s. (xi) When entire net consideration has been invested by an individual towards subscription of shares of an eligible company the exemption u/s. Pr 99 | C K a 9 2 M Ind .000 (B) 7.. 10 deduction @ 50% u/s. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es K . b..50. B on 25th May 2012.K. The tax liability of the company for the assessment year 2013-14 would be (A) 18.3 CS K.50..50 lakhs. the following % age of income from manufacture of Rubber shall be deemed to be business income and liable to tax (A) 15% (B) 25% (C) 35% (D) 50% (iii) Interest is payable to assessee on Refund under the income Tax Act 1961 at the rate of (A) 5% (B) 6% (C) 9% (D) 12% (iv) The maximum penatly leviable for failure to keep or maintain books of account or document as required u/s.. 8.taxbykk. A in turn gifted the said jewellery to Mrs. B (D) Mr.. 5 lakhs to his wife Mrs...000 (D) 2..000 (B) 1. 3 2 2 3 2 6 9999 22 7381 1.. Mrs.com a... u/s....000 (ii) Under Rule 7A of the Income Tax Rules. (vi) Mr.000 (D) 12. A gifted jewellery worth Rs. the wife of their son Mr.000 (viii) Loss from activity of outstanding and maintaining race horses can be carried froward for : (Assessment years) (A) 4 (B) 6 (C) 8 (D) 5 (ix) Annual value of house property if not let out is taken as.. above 57(iii) is allowable (xiii) Book profit u/s.500 (C) 10. 15 d..000 (B) 75. B (vii) The maximum amount of deduction from Gross Total Income available to an individual for interest on savings bank deposit is (A) 5.. Agrawal Penalty Deduction u/s 80GGC Clubbing of Income Salary Business or Profession Theory Theory Theory Theory Theory 1 x 13 = 13 Question 1(a) Choose the most appropriate alternative :(i) The basic Exemption limit for a female below the age of 60 years for the assessment year 2013-14 is (A) 1.000 (C) 1..00. A on 12th April 2012. 115JB of a domestic company was Rs......000 (C) 2. 68 (B) exempt (C) fully taxable but (D) None of the u/s.000 (D) 1. A (C) Mrs. 44AA of the Income tax Act 1961 is (A) 50.54% including (B) 19.80.90.000 (v) Tax on non-monetary benifit paid by the employer is (A) Fully taxable (B) Taxable to the (C) Taxable to the (D) Fully extent of 50% extent of 60% exempted from Tax. B...43% including cess including surcharge @ 5% cess & surcharge cess @ 2% Ca Co now ll fo mp led tax r u le g lti te T e + byk m ate ax The k.055% (C) 20% including (D) 19...
.... Rs.....000............. years from the end of the relevant assessment year......... 35(1)(iii) of 125% the Income Tax Act 1961 the allowed deduction is...Ltd... (taxable / exempted) (vi) Salary received by Mr... (iv) Chapter VI ..R : Nil.... (chargeable / not chargeable) to tax in India (vii) Deduction for provision for bad and doubtful debts made by public financial institution is allowed upto ... Ltd.... Co now ll fo mp led tax r u le g lti te T e + byk m ate ax The k........ of days present in India 130 90 80 Question 1(b) Answers (i) Any sum paid to an approved university.......... P a foreign national & a non resident outside India for services chargeable rendered in India for 150 days is . Therefore he do not satisfy 2nd basic condition also.....000 (A) Fully exempt (A) Mr. (ix) In case of slump sale of any undertaking indexation benefit is .. Jeff .000 100% of capital gain Taxable u/s 68 19.... He satisfies 60 days condition but in last 4 years Mr. Jeff is not present in India for 365 days....... 90 days... Jeff is a foreign citizen therefore he will not fall in exception to the basic condition... % of total income before allowing such deduction 20% and deduction under chapter VIA.....(required /not required required) to deduct tax at source under section 194C of the Income Tax Act 1961..23...... Both condition is required to be checked... not (allowed/not allowed) for the purpose of computation of capital gain allowed exempt 85% K 16 years . 25.........4 CMA June 2013 Direct Tax Solution Solution 1(a) 1 x 13 = 13 (i) (ii) (iii) (iv) (v) (vi) (vii) Option Answers (C) 2. in the year 2012-13........ A (C) 10. 2010-11...... A charitable trust must apply atleast . 110 days and 130 days in the financial years 2009-10............... college or other institutions u/s....80. (viii) Z.... A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Annual value of any one palace in the occupation of a former ruler is . Ca Solution 2(a) Mr...9999 22 7381 1..............c o = o fo Di C ry m r C re S + c K 09 A t & ........ Mr....... Z.......000 (C) 35% (B) 6% S 271A.......... is . (100% / 125%) (ii) Interest payable to a partner by a firm shall not exceed .. Jeff do not satisfy 182 days condition.22.....00... Therefore his RS is Non Resident... a citizen of USA came to India for 80 days.. Pr 99 | C K a 9 2 M Ind ..... The time limit for issue of notice to assets the income in relation to assets located out side India for reassessment purpose is ............ 2011-12 and 2012-13 respectively...000 (viii) (ix) (x) (xi) (xii) (xiii) Option (A) (D) (A) (B) Answers 4 SOP ....... 12% (iii) An assessee ..... (18% / 12%) per annum.... awarded three contracts for repair work of Rs.. (v) Dividend receives by an Indian Company on shares of a Foreign Company is exempted . Determine his residential status for the AY 2013-14..000 not respectively to L......com (x) (xi) (xii) Question 2(a) Mr....055% taxbykk......... (shall / shall not) be allowed in shall not respect of income from short term capital gain... Previous Year 2012-13 2011-12 2010-11 No.... Vacant for whole year : Nil 1.. Rs......A deduction .... (can / cannot) spread over the arrears of rent over the cannot past several years.....000 and 30. Ltd... percent of its income towards its objects..............
000 K 1. Taylor. Shridhar for the AY 2013-14. the tenant vacated the first floor on 31st January. Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k. but later remitted to Indian 12. 2013 and Mrs. Deduction allowed is 50% of interest irrespective of the expenditure incurred for enhancement of compensation. UK citizen and non-resident for the Assessment Year 2013-14 from the following details furnished by him. Question 3(a) Mr.000 Nil 6.2012 and let out the first floor at a rent of Rs. He started construction of the house on Ist April . Pr 99 | C K a 9 2 M Ind .c o = o fo Di C ry m r C re S + c K 0 9 A t & . Interest received on delayed or enhanced compensation is taxed in the year of receipt under the head ‘Other Sources’.Dividend income exempt from tax u/s 10(34).com 9999 22 7381 1. Sridhar occupied the entire house from Ist February. Sale 3. an Indian Company 2. 2011 and completed construction on 30th June. The house has two floors of equal size.000 .50.Question 2(b) taxbykk.5 CMA June 2013 Direct Tax Solution Compute the total income of Mr.50. 20.000 proceeds were received in UK (iii) Rent from a house property in New jersey collected there.000 14.15 lacs at interest of 10% per annum on 1st july 2011. 2013 to 31st March.000 per annum 10.00.50.00. 2013. an Indian company.000 3.000 through normal banking channel (iv) Dividend received from MNO Limited .000 used by S & T Limited for its business carried on in Dubai.50. (i) (ii) Income from business carried out in Mumbai (60% received in USA) 5. 2013.000 (v) Royalty received in UK from PQR Limited . Solution 2(c) Section 56(2). an Indian company for use of trade mark for 6. Solution 2(b) (i) Indian Income (ii) Indian Income (iii) Foreign Income (iv) Indian Income .000 Capital gain from sale of shares of Zenith Private Limited. However.00.He occupied the ground floor on 1st july . (v) Indian Income (vi) Foreign Income Total Income Question 2(c) Write a note on how interest received by an assessee on delayed compensation or enhanced compensation is taxed. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Non -Resident 5. Other Information (i) Fair Rent of each floor (ii) Municipal value of each floor (iii) Municipal tax paid (iv) Repair expenses Mr Sridhar obtained a housing loan of Rs. Sridhar constructed his house on a plot of land acquired by him in Kolkata . Compute income from House Property in the hands of Mr.00. 2012 .000 5. He did not repay any part of the loan till 31st March.000 per annum 80. The loan was 3.000 its business operation in India (vi) Interest on loan received in UK from S & T Limited.000 per month on the same date. an Indian company.00.20.00.
000 6.500) (86.000 Completion of construction : 30-6-2012 Fair Rent : 1.500 1.R : 2 months Ground Floor SOP .250 4.000 20.m. 1.resident Capital Gain • Long.Solution 3(a) First Floor taxbykk.000) 1.12.500 Post Interest 1.000 1. DOB : 1-7-2011 DOR : not paid Total Interest 1.000 5. 20.250) Less : Standard Deduction @ 30% Less : Interest on borrowed capital.72.50.000 1.72.term capital gain on sale of land • Short-term capital gain on sale of shares (securities transactions tax paid) Income from Other Sources • Interest on fixed deposits Total Income Working note if Resident LTCG @ 20% 50.000 90.500 22. Pr 99 | C K a 9 2 M Ind .000 Basic Exemption Balance Tax Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.a. Rajput.500 / 5 = 22.000 (5.50.500 1.000 p.000 1.000 Computation of Interest on borrowed capital Ground Floor (SOP .80.35.500 / 2 = 86.50.250 HP 1 Question 3(b) Mr.126.96.36.199.80.000 1.000) 30.000 4.72.c o = o fo Di C ry m r C re S + c K 0 9 A t & .80.000 MT paid : 10.000 20.250) NAV (86.000) 20.250 HP 2 Income from House Property : (78. aged 82 years gives you the following information for the previous year 2012-13: (i) Interest on fixed deposits with banks (ii) Long.20.500 / 2 = 86.000 (40.80.R) GAV nil Less : Interest on borrowed capital.20.000) Computation of Total Income Computation of Income from House Property 1. Rajput for the AY in cases (i) he is resident.000 3.000 | MV : 80.250) 8. 1.500 Let out Rs.6 CMA June 2013 Direct Tax Solution 15 L @ 10% p.000 (4.000 (20.R : 12 months Previous Year 2011-12 2012-13 2013-14 Interest 1.000 50.40.com 9999 22 7381 1. SOP .000 K 50.000 4.term capital gain on sale of land (iii) Short-term capital gain on sale of shares (securities transactions tax paid) Solution 3(b) Compute tax payable by Mr.000 STCG STT paid @ 15% Normal Income at slab rate 20.000 nil . (ii) he is non .000 Pre Interest 22. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es First Floor (Let out) Expected Rent of 12 months Expected Rent of 9 months Actual rent of 7 months GAV Less : Municipal Tax (86.
4. 10% of 7.270 Tax on LTCG @ 20% on Rs.500 by D.000 Section 194A. an Indian Company to another Indian Company.7 CMA June 2013 Direct Tax Solution Computation of Tax if he is Resident. 20.230 42. Limited. 2013 are 20 lakhs and 10 lakhs respectively.c o = o fo Di C ry m r C re S + c K 0 9 A t & . 50. Limited Payment of interest of 7. Payment of 1. Question 3(c) (i) State briefly whether the following transaction require deduction of tax ay source: (ii) (iii) Solution 3(c) (i) (ii) (iii) The details of assets and liabilities as on 31st March.00. Limited.com 9999 22 7381 1. 6.000 at slab rate Total Tax + Education cess @ 3% Tax Note : Basic exemption advantage and tax concession advantage is not available to Non Resident. Compute the value of interest of the partners as on 31st March.000 nil 9. 10% of 5. 10.000 Tax on STCG STT paid @ 15% on Rs.80. 5 lacs by P. 20. Q.000 41. The contractor used materials which were purchased by him from a company.000 Tax on Normal Income Total Tax + Education cess @ 3% Tax Computation of Tax if he is Non Resident.000 Tax on STCG STT paid @ 15% on Rs.000 28. 2013 for the purpose of wealth tax. .000 1.000 3.taxbykk. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Section Rate of TDS & Amount of TDS Section 194J. resident in India to Mr.000 3.230 Payment of royalty of Rs. Limited. L. Palak and Nolak sharing profits and losses in the ratio of 3:1 is as follows: (i) Value of assets located outside India (ii) Value of assets located in India (iii) Debts incurred in relation to assets located in India 45 lakhs 120 lakhs 75 lakhs Capitals of Palak and Nalok as on 31st March. 30. resident contractor for manufacturing a product as per requirement of the firm.500 = 750 This is not the case of Job Work since raw material is not supplied by the Customer.000 270 9. 2013 of a partnership firm consisting of two partners. Solution 4(a) Value of assets located outside India Value of assets located in India Less : Debts incurred in relation to assets located in India Net Wealth of the Firm 45 lakhs 120 lakhs (75 Lakhs) 45 Lakhs 90 Lakhs K Question 4(a) Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.00.000 Tax on Normal Income on Rs. an Indian Company for delayed payment of sale proceeds. an Indian Company to M. Tax on LTCG @ 20% on Rs.000 = 50.000 by a partnership firm. Pr 99 | C K a 9 2 M Ind .
The trust has furnished the following details relating to previous year 2012-13: (i) (ii) (iii) (iv) Compute tax payable .50. AY 3 3 year from the end of relevant assessment year.450 .000 4.00. Pr 99 | C K a 9 2 M Ind .com 9999 22 7381 1.000 15. Srinivas Charitable Trust registered under section 12AA of the Income Tax Act is engaged in providing medical assistance to the physically challenged persons.00.50. by the trust for the Assessment Year 2013-14 Solution 4(c) Net income from the properties help under trust Voluntary Contribution (excluding corpus donation) Total Less : Deduction @ 15% Less : Application of income (Financial assistance) Less : Purchase of land Income of trust Tax on Total Income at slab rate on Rs.000 5.c o = o fo Di C ry m r C re S + c K 0 9 A t & . Question 4(c) Solution 4(b) 2 year from the end of relevant assessment year. AY 4 1 year from the end of financial in which notice u/s 148 is served.00.000 9.000 9.50.8 CMA June 2013 Direct Tax Solution Capital Contribution Balance net wealth to be distributed in Profit Sharing Ratio Net Wealth of Partner Question 4(b) Palak 20 L 45 L 65 L Nolak 10 L 15 L 25 L Total 30 L 60 L 90 L State the time limit prescribed for passing the following orders under the Income Tax Act: Particulars (i) An order of assessment by the Assessing Officer under section 143(3). 3. where reference has been made to Transfer Pricing Officer for determination of arm’s length price in international transactions.000 450 15. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Net income from the properties help under trust Voluntary Contribution (including donation 1.000 K 16.50.50.00.000 4.00.50. 2 year from the end of financial year in which assessment order is passed. (iii) An order of assessment by the Assessing Officer under section 147: (iv) An order of revision by the Commissioner of Income Tax under section 263: (v) An order by the Commissioner of Income Tax for granting registration to a public charitable trust under section 12AA.taxbykk.000 3. (ii) An order of assessment by the assessing officer under section 143(3).000 3.000 + Education cess @ 3% Tax Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.50.000 3.000 20. 6 month from the end of the month in which application for registration is made.000 received with direction from the donor that it would form part of corpus) Financial assistance to physically challenged persons Purchase of land for construction of office of the trust Computation of Total Income of Charitable Trust Computation of Tax of Charitable Trust 16.50. if any.
Restriction u/s 40(a) (ia) is applicable. The parties however have agreed to admit the receipt in their income statement and pay tax thereon. (iii) Co-operatives formed for promoting the interest of schedule tribes.000 was deducted at source in the country where the performances were given. Exempt u/s 10(34). Question 5(c) Mr. Basu is 3.000 of which two employees were paid salary in excess of 2. Tax of 20. Section 56(2).000 for which no tax was deducted at source. 1.Question 5(a) taxbykk.000.500.80. (iii) Interest on capital paid to partners at 15% per annum of 1. (ii) Rental income earned by a registered trade union.00. Deduction allowed @ 12% p. No tax was deducted at source on this amount Solution 5(a) Allowed.000. There is no requirement of deduction of tax at source on interest paid by Firm to its partners. Restriction u/s 40(a)(ia) is not applicable to payment made by way of Salary. No tax was deducted at source. Pr 99 | C K a 9 2 M Ind . (v) Rent paid for machinery 20.000 what is the relief due to him under section 91 for the assessment year 2013 .000 per month for 8 months. (v) Amount received by a non . India does not have any agreement with that country for avoidance of double taxation. 115-O .50. No tax was deducted at source on those salary payments.87. a partnership firm incurred the following expenses: Particulars (i) Salary paid to staff 12.02. Assuming that Indian Income of Mr.000 each.c o = o fo Di C ry m r C re S + c K 09 A t & . Section 10(37).00. Deduction is allowed. Basu is an actor deriving income from contracts performed outside India 1.000 received from a charitable trust by a college students.000 in a financial year.com 9999 22 7381 1.resident towards compulsory acquisition of urban agricultural land in India by Central Government.14 ? Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.a. K . Determine the allowability or otherwise of the above said expenses due to non deduction of tax at source. Exempt u/s 10(27). However the other parties have admitted for payment of tax therefore deduction is allowed.00. Two parties to whom payments were 87. No tax was deducted on such interest payment.9 CMA June 2013 Direct Tax Solution Abhishek & Co.000.00. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Exempt u/s 10(24). (ii) Interest paid to bank on working capital limit 27. Solution 5(b) Not taxable. Question 5(b) Decide the exemption / taxability of following receipts / recipients: Particulars (i) Educational scholarship of 10. Deduction is allowed since no tax is required to be deducted at source as the rent do not exceeds Rs.000 and 1. (iv) Payments made to contractors for job work process 6. Not allowed as per S 40(a)(ia). (iv) Dividend received from Indian companies by resident individuals and tax on such dividend paid by the company u/s.
In addition he gets 6 lakhs as dearness allowance (forming part of basic salary). Amount of TDS = 10% of 50. 4.00. Such individual do not have any business income.00.00.000 Nil Least is A Actual HRA received 2.52. He however pays 2.000 Relief u/s 91 = 5. determine the quantum of HRA exempt from tax.00.000 Computation of tax & relief u/s 91 Tax as per slab rate + Education cess @ 3% Tax Less : Relief u/s 91 (see note) Tax Question 6(a) “X” a resident of Bengaluru receives 20.10 CMA June 2013 Direct Tax Solution Working note for computation of Relief u/s 91 1. Such individual is resident in India.150) 15. and c.Solution 5(c) taxbykk.80. a remuneration of Rs.5% commission on sales made by him (sale made by X during the previous year is 80.x 100 = 5.000 2. State whether tax has to be deducted from the payment and if so the amount to be deducted. Average Foreign Tax = 20.00. b.000 Foreign Income 1.000 = 5.x 100 = 20% 1.000. a.000 = 5. 1.40. .000 Computation of exemption of HRA M 40% of SAS = 40% of 28.80.000 11.000 Total Income 4.15% 4. Question 6(c) A company pays in August 2012.000 + Dearness Allowance forming part of salary 6.2.600 (5. K If all the following conditions are satisfied then senior citizens are not required to pay advance tax. 2.000 as house rent.40.000 .10% of SAS = 2.00.000 ----------.00. Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k. Average Indian Income Tax = 20.450 3.000 + Commission based on sales turnover 2.000 600 20.00.00. 3.600 ----------.88.c o = o fo Di C ry m r C re S + c K 09 A t & .00. (SAS) = BS + DA (not forming part of salary) + Commission (if) Basic Salary 20. Pr 99 | C K a 9 2 M Ind . A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es 20.80. Solution 6(c) Yes tax is to be deducted u/s 194J.000 SAS 28.80.000). 50.150 Computation of total income Indian Income 3. which is not in the nature of salary.000 nil Question 6(b) Solution 6(b) Enumerate the conditions for exemptions of senior citizens from payment of advance tax u/s 44AD. Solution 6(a) Salary for the purpose of HRA.000 Doubly taxed income = Rs.15% of 1.000 to its Director.80.000 is paid to him as house rent allowance .000 as basic salary. An individual is aged atleast 60 years.00.000 is exempt exempt F Rent paid .com 9999 22 7381 1.
Valuation of stock : Assessee has a choice to value at (i) cost (ii) market price (iii) cost or market value whichever is less (Chainrup Sampatram –vs.44. 44AD. or b. LIFO method. Solution 7(b) Validity of claim is justified. the AO would not be precluded from applying the correct method (British Paints India Ltd-vs-CIT 188 ITR 44 SC). The value of enhanced closing stock shall be taken as value of opening stock of next year. the Assessing Officer enhanced the value of closing stock and added the difference to the total income.Question 6(d)(i) Solution 6(d)(i) taxbykk. (ii) Conversion of sugar cane into gur. However. If a person is a Company. if closing stock is varied by the ITO then such varied value shall be treated as opening stock of the next year irrespective of valuation disclosed in books. In the assessment year subsequent to this.CIT 189 ITR 285 SC) Finished or semi finished goods — (i) where cost method is applied then it should include all overhead expenses otherwise it would give distorted picture (ii) merely because incorrect method was applied in past. FIFO method. a. K Other Facts : Only for reading Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k. If a person is Non Resident. average cost method etc. LLP.11 CMA June 2013 Direct Tax Solution State who are the persons not eligible to avail any benefit u/s. (ALA Firm-vs. by the same amount. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es 4.CIT 24 ITR 481 SC). AOP / BOI. the value of the opening stock of the year.000 1. While applying the cost method. The above rule is subject to one exception that on discontinuation of business. the same should be applied regularly unless change is bonafide.500 x 12 = Solution 7(a) 100% Non Agricultural Income 40.agricultural income. a medium goods vehicle of 11 months and another medium goods vehicle for 12 months during the previous year.com 9999 22 7381 1.500 49. Solution 6(d)(ii) Light Commercial Vehicle Medium Commercial Vehicle Medium Commercial Vehicle Total Question 7(a) State whether the following are agricultural income or non.500 x 9 = 4. the cost is being determined through different modes i. once a particular mode is applied. Question 6(d)(ii) An assessee owns a light commercial vehicle for 8 months and 3 days.500 54. Question 7(b) In the course of assessment proceedings.c o = o fo Di C ry m r C re S + c K 09 A t & . it should always be valued at market price. Compute his profits from the three trucks in term of section 44AD. However it should be regularly employed. Local Authority.e. assessee wants the AO to enhance.500 x 11 = 4. (i) Where owner himself performs slaughter tapping & them sells the rubber. Pr 99 | C K a 9 2 M Ind . Discuss the validity of the claim.000 100% Agricultural Income . Following persons are ineligible to avail any benefit u/s 44AD.
Instead it shall be taxable in the hands of minor child itself.000 u/s 80U. Do not write this Applicable to Not applicable to Contribution to Amount of deduction 80GGB Indian Company Others 80GGC All assessee Local authority & every artificial juridical person wholly or partly funded by the Govt. Rs.000 has expended for shifting of business from the original site to another place which is more advantageously located.000 and 3.000. 10.00. Question 7(c) : Please advise regarding admissibility of the following items of expenditure: (i) Payment of interest of 40. (iv) Expenses for registration of trademarks. Revenue expenditure and hence allowed.000 respectively. 50.40.in. Pr 99 | C K a 9 2 M Ind . Capital Expenditure and hence not allowed.000 for the assessment year 2013-14.000 on monies borrowed from bank for payment of dividends to share holders. If it is insured it was uninsured insurance premium is charged under the head Business Income.trade assuming (a) it is insured (b) Allowed u/s 28 as a loss. The total income of his father B and of his mother C for the relevant assessment year is 4.00. Solution 8(c) Income of mentally retarded minor child is covered u/s 80U. The return of income shall be in the name of minor child but signed by either of his parents. (ii) 12. Assessee can claim depreciation @ 25%. Question 8(b) Solution 8(b) What is the effect of contribution made by an individual to electoral trust on his taxable income? Simple answer : Contribution made by an individual to electoral trust is eligible for 100% deduction u/s 80GGC which shall reduced his gross total income. Question 8(a) What are the consequences if a person fails to comply with provisions of section 139A of the Income Tax Act. 1961? Solution 8(a) Section 272B: Penalty for failure to comply with the provisions of section 139A. a mentally retarded minor has a total income of 2. (iii) Lump sum paid to acquire a licence regarding technical information to reduce production cost. Political party or Electoral Trusts 100% of contribution Question 8(c) A. K .com 9999 22 7381 1. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Political party or Electoral Trusts 100% of contribution Capital expenditure to acquire intangible assets. Discuss the treatment to be accorded to the total income of A for the relevant assessment year.c o = o fo Di C ry m r C re S + c K 09 A t & . He can claim deduction of Rs.taxbykk.12 CMA June 2013 Direct Tax Solution Solution 7(c) Business expenditure therefore allowed. Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k. Hence his income shall not be clubbed in the hands of parents. He has to file his return of income since his gross total income exceeds basic exemption. (v) Theft of stock .
Allowed. He is transferred from one city to another city. line of business. b. (v) (vi) Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k. then exemption is only for upto 15 days. Pr 99 | C K a 9 2 M Ind . a.13 CMA June 2013 Direct Tax Solution What are the conditions to be fulfilled by an employee to get his accommodation in a hotel that will not be a taxable perquisite? Solution 8(d) a. and He is provided a accommodation in a hotel. No need to take RBI approval. State the deductibility of the following expenses while computing the business income: (i) Anticipated hedging loss under a contract to purchase raw material. The assessee claims the setoff of unabsorbed depreciation of a As per section 32(2) unabsorbed discontinued business against the profits of another business. then exemption is only for upto 15 days.Question 8(d) taxbykk. (iv) 500 VIP briefcases costing 2. He is provided a accommodation in a hotel. Allowed in 5 equal installment from the completion of new line of business. K . (ii) Consultation fees paid to tax advisor. He is transferred from one city to another city.com 9999 22 7381 1.c o = o fo Di C ry m r C re S + c K 09 A t & . (iii) Advertisement expenses incurred outside Indian in foreign currency. Question 8(e) Business expenditure hence allowed. RBI permission has not been obtained. A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es Solution 8(e) Anticipated loss not allowed. Travelling expenses incurred to explore the feasibility of new Treated as preliminary expenses. depreciation can be set off from discontinued business.000 each presented to customers. and b. Business expenditure and hence allowed.
A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es CMA June 2013 Direct Tax Solution .14 Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.c o = o fo Di C ry m r C re S + c K 09 A t & .com K 9999 22 7381 Notes 1.taxbykk. Pr 99 | C K a 9 2 M Ind .
c o = o fo Di C ry m r C re S + c K 09 A t & .15 Ca C no ll om wle fo p r u le dge taxb lti te T + yk m ate ax The k.com K 9999 22 7381 Notes 1. Pr 99 | C K a 9 2 M Ind . A ctic 2 7 A | ire gr al 38 CS ct T aw = 1 ax al cla ss es CMA June 2013 Direct Tax Solution .taxbykk.