REG NO:

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATIONS – MAY 2023
B.COM (T.T.) – VI SEMESTER
C2 15 MC 601: INCOME TAX – II
Duration: 3 Hours Max. Marks: 70
SECTION - A
I) Answer any TEN questions. Each carries 1 mark. (10x1=10)
1. Mention different forms of casual income.
2. Define the term ‘transfer’. Give two examples of cases not regarded as
’transfer’.
3. Define L.T.A.
4. State any four items deductible u/c 80C.
5. What do you mean by intra head set off of losses? Explain with suitable
example.
6. What is bond washing transaction?
7. What is ‘additional depreciation’? State the rate of additional depreciation.
8. Family pension received in Kenya for services rendered in India 54,000 by
Amar. Calculate how much would be taxable in his hands.
9. Compute deduction u/s 80QQB if Royalty earned was Rs 4, 00,000; associated
expenditure- Rs 20,000 ;Value of books sold Rs 40, 00,000.
10. List the provisions to avail deduction u/s 80TTA.
11. State with reasons whether the following expenses are admissible or not as
deduction while computing income from business or profession:
a) Rs 12,000 worth stock in trade was lost in fire
b) Rs 1500 - interest paid to bank on a personal loan taken to purchase a
two wheeler.
12. When and how is Section 50C applicable?
SECTION - B
II) Answer any THREE questions. Each carries 6 marks. (3x6=18)
13. Mr. David has furnished the following information in respect of donations
made by him for the PY 2021-22
1) Donation to PM national relief fund Rs.100000
2) Donation to national sports fund Rs.150000
3) Donation to Rajiv Gandhi foundation Rs.50000
4) Donation to approved charitable trust Rs.40000
5) Donation given to poor students Rs.20000
6) Rs.80000 given to municipality for family planning program
7) Rs.15000 paid to notified church.
His gross total income is Rs.1600000. Compute the amount of deduction
available to him.
14. Mr. Kumar is a leading advocate who maintains the books on cash basis.
From the following receipts and payments a/c for the year 2021-22, compute
his taxable income from profession.
Page 1 of 6
 Receipts Rs. Payments Rs.
To balance b/d 12000 By staff salary 19500
To consultation fee 37500 By office rent 28000
To special commission 85000 By car expenses 15000
To gifts from clients 72000 By computer purchased 40000
To loan from bank 100000 By repayment of loan 50000
To share of income from 50000 By car purchased 200000
HUF
To remuneration from 14000 By purchase of 8000
articles published in professional book
professional journal
To arbitration fee 10000 By interest on loan 12000
- By balance c/d 8000
Total 380500 Total 380500

Adjustments:
1) Loan is borrowed for profession purpose.
2) 25% of the car used for personal purpose.
3) Depreciation allowed as per IT rules are car 15%, computer 60% and books
100%.
15. Compute the capital gains in the following cases for AY 2022-23.
a)Rishi, a transporter acquired a route permit from David on 6/1/2000 for a
consideration of Rs 2,10,000. Its market value on 1/4/2001 is Rs 3,00,000. As
the title was disputed, Rishi had to spend Rs 75,000 in PY 2011-12for
defending his title. Rishi sold the above route permit to Sreesh in the PY 2021-
22 for Rs 8,00,000
b) Vishesh and his father Ramesh were staying in a tenanted premises since
June 2001.The tenancy agreement was in the name of Ramesh. Ramesh died
on 15/5/2005. The owner filed a suit against Vishesh to get the premises
vacated.
Vishesh spent Rs 50,000 to defend the tenancy right which he inherited from
his father. The landlord ultimately paid Rs 5,00,000 to Vishesh on 5/3/2022 to
get the house vacated.

16. Write short notes explaining the following sections of the IT Act
a) Section 54
b) Section 80 D

17. X Ltd is incorporated in Bangalore on 6th September 2021.It commences

production on 15th March 2022. The following expenses are incurred by the
company before commencement of business:
a. Expenses on incorporation, issue of shares etc Rs 92,000
Page 2 of 6
 b. Preparation of feasibility report, project report and conducting market
survey(the work is
completed by the taxpayer itself)-Rs 1,40,000
c. Engineering services(carried on by a concern which is not approved by the
Board)Rs 1,30,000
Determine the amount of deduction available u/s 35D assuming the
following figures of fixed assets
and capital on 31/3/2022(i.e the last day of the year on which the taxpayer
starts production)
1. Cost of fixed assets – Rs 55 lacs
2. Share Capital- Rs 40 lacs
3. Debentures- Rs 12 lacs
4. Long term borrowing from a financial institution (repayable in less than 7
years)- Rs 8 lac
SECTION - C
III) Answer any TWO questions. Each carries 15 marks. (2x15=30)
18. From the following particulars of Mr. Ramesh, compute taxable income from
other sources for the AY 2022-23.
a) Royalty from book written on tax Rs.100000. He claims deduction
towards salary to clerk Rs.15000 and telephone expensesRs.8000 paid in
this connection.
b) Income from articles published in magazines and journals Rs.15000
c) Family pension received Rs.62000
d) Winning from lottery Rs.42000.
e) Rs.100000, 8% tax free commercial securities.
f) Interest on post office cumulative time deposit Rs.2000
g) He lives in rented house by paying rent of Rs.15000 p.m, of which he
has sublet 25% portion for rent of 5000 p.m.. He incurred Rs.5500 for
repairs and Rs.4000 for municipal tax of whole house.
h) Winning from card games Rs.18000 (Net)
i) He invested Rs.100000 @ 8.5% on bonds of ABC ltd.
j) Interest on fixed deposit in a bank Rs.14000
k) Rs.12500 interest received on securities of TCS Co.ltd.

19. Mr. Inder gives the following details for the period ending 31/3/22, you are
required to compute the taxable profits from business
Rs Rs
To opening stock 2,11,000 By sales 2,62,84,300
To purchases 2,03,80,000 By closing stock 2,26,600
To manufacturing 3,65,900
expenses
To factory rent, rates 2,30,000
and taxes
To depreciation on 15,000
machinery & building
To gross profit 53,09,000
Page 3 of 6
 2,65,10,900 2,65,10,900
To office salaries 46,27,000 By gross profit 53,09,000
To establishment 6,100 By rent of staff quarters 19,000
expenses
To interest on capital 3,300 By refund of tax penalty 2,000
To Fire insurance 200 By sale of a machinery 25,000
To bad debts 7,000 By recovery of bad 6,000
debt(disallowed earlier)
To income tax 6,000 By sundry receipts 35,000
To expenses on GST 2,000
proceedings
To expenses of income 13,000
tax proceedings
To Diwali expenses 4,000
To audit fee 7,000
To medical expenses of 3,000
proprietor
To staff welfare 12,000
expenses
To repair of staff 4,000
quarters
To bonus payable to 2,20,000
employees
To Provision for tax: 25,000
GST
To municipal taxes for 4,000
staff quarters
To general reserve 26,000
To entertainment 16,000
expenses
To net profit 4,10,400
53,96,000 53,96,000
Other Information:
a) Purchases include a petty purchase of Rs 21,000 paid by crossed
cheque
b) Inder always valued stock at cost price but on 31/3/22, he has valued
closing stock at market price which was in excess of the cost price by
10%
c) Office salaries paid include Rs 10,400 to the proprietor
d) Diwali expenses include gifts of Rs 1,000 made to relatives
e) The WDV of the block consisting of machinery(15%) as on 1/4/21 is Rs
59,000. One machine whose WDV as on 1/4/21 was Rs 5,000 was sold
for Rs 25,000 during the year
f) The WDV of the block consisting of factory building(10%) as on 1/4/21
is Rs 90,000.
g) GST amounting to only Rs 20,000 was paid on or before 25/6/21

Page 4 of 6
 h) Office salary includes Rs 4,00,000 on which TDS @30% was deducted
on 5/6/22 and the same was deposited on 16/7/22.
i) Bonus was yet to be paid to staff.

20. From the following particulars given below compute the depreciation and
other claims for AY 2022-23:
Assets Actual cost WDV on Rate of
1/4/21 depreciation
Factory
Building
I 8,00,000 4,50,000 10%
II 6,00,000 80,000 10%
Plant &
machinery
A 12,10,000 9,50,000 15%
B 4,00,000 2,00,000 15%
C 5,60,000 3,10,000 40%
The following new additions were made during the
month of June 2021
Building
III 4,00,000 - 10%
IV 2,80,000 - 5%
Plant &
machinery
D 8,00,000 - 15%
E 1,60,000 - 40%
The following assets were sold during the previous year
Net
consideration
Building II 5,00,000
Plant B 8,50,000
Plant C 5,00,000

21. Mr. X owns 2 acres of Agricultural land in an urban area

of Kanpur which he sold on 30th Nov 2021 at Rs 50 lacs
per acre. Other particulars are:
a) Cost of 2 acres of land purchased in 1997 – Rs 6 lacs
b) Fair market value as on 1/4/2001- Rs 23 lacs
c) Selling expenses- Rs 1 lac
d) He owns one residential house on 30/11/2021
e) Date of filing Income tax return- 31 st July 2022
f) Mr. X purchased 10 acres of agricultural land in a rural area for Rs 8 lacs on
10-06-2022
g) Mr. X purchased a piece of land to construct a residential building for Rs 6
lacs in Kanpur.

Page 5 of 6
 h) He deposits Rs 15 lacs in a Schedule bank in Capital gain deposit scheme
on 30-07-2022 to construct a residential house

i) Amount invested in bonds of NHAI was Rs 8 lacs on 31-03-2022

Assume that he actually withdraws Rs 12 lacs from the deposit account to
complete his residential house.

Calculate taxable ‘Capital Gains” for different assessment years.

(A.Y. 2022-23)

SECTION - D
IV) Case Study – Compulsory question. (1x12=12)
22. A) G of Goa ordered goods from K of Karnataka to supply 100 tables to be
supplied to A of Andhra Pradesh. Which is the place of supply and
location of supplier? ( 4 marks)

B) i) M of Mangalore exports goods to Singapore via Chennai

ii) C of Chennai imports goods via Mangalore port. The goods reaches
to Chennai via Bangalore.
Question: Which is the place of supply and Location of supplier? ( 4 marks)

C) Mr. Lokesh, a registered architect from Karnataka prepares building

plan for X Ltd who set up a factory in Delhi. He does not have
registration any other places. Mr. Lokesh have visited once the site,
otherwise he guides from Bangalore. He collected Rs. 50,00,000.

Question: Which is the place of supply and location of supplier? (4 marks)

&&&&&&&&&&&&&&&&&&&&&&

Page 6 of 6