TAXATION-I

Time allowed – 3 hours

Total marks – 100

[N.B.: The figures in the margin indicate full marks. Questions must be answered in English. Examiner will take
account of the quality of language and the manner in which the answers are presented. Different parts, if any, of
the same question must be answered in one place in order of sequence.]
Marks
1. (a) Explain the objectives of Taxation. 8
(b) Can a foreign national be a `Resident‟ as per Income Tax Ordinance 1984? If yes, how? If not,
why? 5
(c) Write in brief about client confidentiality in relation to money laundering. 5
2. A new assessee hitherto had not assessed his income tax estimated tax of Tk.30,000 on Income
from Business and paid the sum U/S 64 during financial year 2014 - 2015. He also paid further sum
of Tk.10,000 U/S 74 on 15 September 2015. On regular assessment made on 31 March
2016, tax was determined at Tk. 60,000. Deputy Commissioner of Taxes charged interest U/S 73 at
the rate of 10% on Tk.30,000 from 1 April 2015 to 31 March 2016. Comment on the above action
of the Tax Authority with reference to the legal provisions. 6
3. Mr. Zahir, is a Finance Manager of a multi-national company. His income for the Assessment Year
2015–2016 were as under:
Basic Pay Tk.50,000/- Per Month.
House Rent - 60% of the Basic Pay.
Entertainment Allowance - 10% of the Basic Pay.
Medical Allowance - 10% of the Basic Pay.
Employer‟s Contribution to Recognized Provident Fund - 10% of the Basic Pay.
Bonus-Festival and Incentive, equivalent to 2 months‟ Basic Pay.
He was provided with a servant and mali at monthly salary of Tk.5,000 each.
He is entitled to one & half month‟s Basic Pay as a Gratuity at the time of retirement.
Besides the above, he is also entitled to a full-time car fully expensed by the company.
His other incomes were as follows:-
(i) Dividend from a Company Listed in the Dhaka Stock Exchange Tk.100,000.
(ii) Dividend from Private Ltd. Company Tk.40,000.
(iii) Interest from 5 Years‟ Bangladesh Sanchaya Patra Tk.50,000.
(iv) Gross Interest from Savings Bank A/c. Tk.25,000 from which 10% tax was deducted at
source.
He has a house which was let out at a monthly rent of Tk.50,000. He paid Municipal Tax of
Tk.3,500 per quarter. Interest paid on the Bank Loan was Tk.150,000 per annum.
Mr. Zahir contributed Tk.60,000 to Provident Fund. Interest accrued on the P.F. Balance was Tk.
300,000. He paid Life Insurance Premium of Tk.50,000. He purchased 5 years‟ Bangladesh
Sanchaya Patra of Tk.150,000.
Compute his Total Income and Tax Liability thereon for the Assessment Year 2015 – 2016. 15
4. Following transactions were taken place in the proprietorship business of Mr. X.
Cost of an asset as on 1 January 2016 Tk.120,000
Accumulated depreciation as on 1 January 2016 Tk. 60,000
Depreciation charged from 1 January to 31 May 2016 Tk. 5,000
On 31 May 2016 the asset was sold Tk.150,000
Calculate taxable Income of Mr. X from above transactions. 5
5. XYZ constructed a building and installed a machinery in the year 2014 but the commercial
production was started in the year 2015. From when initial depreciation will be allowed as
deductible expenditure and at which rate? 5

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6. In case of “Income from salaries” employee‟s contribution to Recognized Provided Fund is once
added to income and again rank for investment allowance. Why? What is the impact on calculation
of tax liability? Show with example. 5
7. An assessee regularly closes his annual accounts on 31 December and his last assessment for the
assessment year 2105-16, corresponding to the accounting year ended 31 December, 2014 was
completed. The assessee has decided to change his next annual accounts on 30th June. Determine
the date when shall this assessee close his next annual accounts. 4
8. Mr. Rahman has filed an appeal to Appellate Tribunal against the Order of Commissioner
(Appeals). He was served notice for hearing on 15 April, 2016. But due to not receiving the notice
in time Mr. Rahman can not appear for hearing. Can the Appellate Tribunal pass an order ex-parte
for non-appearance of Mr. Rahman on the hearing date of appeal? 4
9. (a) From the following information relating to PQR Steel Ltd., compute the balance of loss to be
carried-forward for adjustment beyond assessment year 2015-16: 9
Assessment year Particulars Tk. .
2009-10 Loss assessed (71,218)
2010-11 Income determined 39,813
2011-12 Loss assessed ( 3,517)
2012-13 Loss assessed (44,632)
2013-14 Income determined 21,382
2014-15 Income determined 7,419
2015-16 Income determined 14,625
(b) Mr. Ahmed, an individual assessee has the following Income or Losses under the heads of income
mentioned below. Compute his Total Income or Total Loss for the assessment years 2014–2015 and
2015–2016 affording him set-off or carry forward of losses as allowed under the law. 9

Assessment Year 2014 - 2015 Taka Assessment Year 2015 - 2016 Taka

1  Loss from Business 225,000 1 Income from Business 337,000

. .
 Cash Subsidy received from 150,000
Government
2 Loss under the head „Capital 2 Loss under the head „Capital
. Gains‟ 185,000 .Gains‟ 87,000
3 Income from House Property 45,000 3 Income from House Property 60,000
. .
4 Loss in Speculation Business 65,000 4 Income from Speculation 90,000
. .Business
5 Loss under the head 5 Loss under the head 125,000
. „Agricultural Income‟ 28,000 .„Agricultural Income‟

10. (a) When is “Registration” required for the purpose of VAT? Which “Persons” are required to be
registered for the purpose of VAT? 6
(b) What “Documents” need to be submitted for VAT registration? When registration may be
“Cancelled” for the purpose of VAT? 6
11. Mannan Traders, an importer, imported 200 of AC at CIF price @Tk.100,000 per piece. The
clearing and other incidental charges amounted to Tk.100,000 for the total consignment. He sold 80
pieces of AC to a whole seller at a markup of 10% (exclusive of VAT). The whole seller charged
10% markup to sell it to retailers. The retailers incurred a cost @Tk.2,000 for maintenance and
other expenses and added 10% markup to the price.
Required:
Compute VAT assuming that the retailers sold 60 pieces of AC in a trade fair among various
customers in the month of June, 2015. 8

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