Full Text Transcript
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PE- II
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GROUP-II. PAPER-S,
INCOME TAX AND CENTllAl,
Roll No............................... MAY2010
SALES TA:X
Total No. of Questions-6] [Total No. of Printed Pages-7
Time Allowed-3 Hours Maximum Marks-100
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Answers to questions are to be given only in English except in the case of candidates
who have opted for Hindi medium. If a candidate has not opted"for Hindi
medium, his answers in Hindi will not be valued.
Answer all questions.
Working notes should form part of the answer.
Wherever required suitable assumptions m5lYbe made by the candidate and stated
clearly in the answer.
Marks
1. (a) Mr. Sanjay, a retail trader from Delhi submits the following Trading and 20
Profit and Loss Account for the year ended 31st March, 2010.
Trading and Profit and Loss Account for the year ended 31st March, 2010
Particulars Amount Particulars Amount
(Rs.) (Rs..)
Opening stock 10,000 Sales 15,00,000
Purchases 12,50,000 Closing stock 20,000
Gross profit 2,6Q,000
15,20,000 15,20,000
Salaries 80,000 Gross profit 2,60,000
Rent and rates 50,000 Interest received-Savings Bank 5,200
Interest on loans 25,000 Profit on sale of shares 45,000
Printing and stationery 30,000 Winnings from lottery
Postage 15,000 (Net of TDS) (TDS 4,500) 10,500
Professional fees 40,000 Miscellaneous income 20,000
Motorcycle 40,000
(Purchased on 31.10.09)
Loss on sale oJ shares 20,000
Miscellaneous expenses 10,000
Net Profit 30,700
3,40,700 3,40,700'
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The following additional information was also provided by Mr. Sanjay :
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(i) Salary includes Rs. 24,000 paid to his brother-in-law which was unreason~ble
to the extent of Rs. 6,000.
(ii) The whole amount of printing and stationery was paid in cash in a single
transaction.
(iii) The details of Fixed Assets as on 1.4.2009 are as follows:
WDV as on Rate of
1.4.2009 Depreciation
(a) Plant and machinery 3,40,000 15%
(b) Furniture and fixtures 1,00,000 10%
(iv) Purchase of Fixed Assets during the year:
Motorcycle (31.10.2009) 40,000 15%
(v) Sale of Fixed Assets:
Plant and Machinery 40,000 15%
Furniture & Fixtures 20,000 10%
(vi) Sales-tax for the month ofMarch, 2010, Rs. 6,000 was paid on 30.4.2010.
Due date for payment was 25.4.2010.
(vii) Refund of Sales-tax Rs. 5,000 relating to the year 2007-08 in included
under miscellaneous income. .
(viii) Miscellaneous expenses include Rs. 10,000 contributed to.Prime Minister's
National Relief Fund.
(ix) Loss on sale of shares represents shares sold within a period of 6 months
from the date of purchase.
(x) Profit on sale of shares represents shares held for two years and on
which security transactions tax was paid.
You are required to compute the total income of Mr. Sanjay for the Assessment
Year 2010-11. You are also required to advise Mr. Sanjay, whether he can
offer his business income under Section 44AF i.e. on presumptive taxation.
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(b) Anand, a resident individual and a Senior Citizen, purchased 25,000 shares 10
ofAB Ltd., an unlisted company @Rs. 100 per share, on 1.4.2000. On 1.10.2001,
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AB Ltd. declared bonus shares @20% on the original holdings. On 1.4.2002,
AB Ltd. issued rights shares at one share per every two shares held @Rs. 60
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per share. Anand subscribed in full, his right share entitlement. Anand sold
all the shares of AB Ltd. on 30.4.~009 @Rs. 200 per share. He paid brokerage
@ 2% on sale value of shares. Anand purchased a residential flat for
Rs. 20,00,000 on 1.7.2009 as he did not own any house/flat and invested
Rs. 10.00 lakhs in REC Bonds (Capital gains) out of the net sale consideration
of sale of shares.. Anand has no other income during the previous year
2009-10. Compute the Capital Gains and the total income chargeable to tax
under the Income-tax Act, 1961 and tax thereon for the previous year
2009-10. Cost inflation index for tl;1.evarious years are as follows:
2000-01 406
2001-02 426
2002-03 447
2009-10 .632
2. (a) Mrs. Priya draws a salary of Rs. 36,000 per month. She received the following 6
gifts during the previous year 2009-10 :
(i) Gift of gold jewellery worth Rs. 4,00,000 on 24.9.2009 from her financee.
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(ii) Gift of Rs. 1,40,000 on 24.11.2009 from her father's brother.
(iii) Gift of land, the value of which is Rs. 1,50,000 from her. brother on
2.10.2009.
(iv) Gift of Rs. -1,00,000 from her husband's friend on 11.11.2009 on her
marriage.
(v) Gift of Rs. 50,000 on 12.2.2010 from her brother's mother-in-law.
Compute the Gross Total Income of Mrs. Priya for the Assessment Year
2010-11 under the Income-tax Act, 1961.
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(b) Mr. Mahesh has two flats at Chennai, one occupied by him and another 5
occupied by his parents and children, the particulars of which are provided 4
below:
(Rs.) (Rs.)
Particulars Flat I Flat II
occupied by occupied
Mr. Mahesh by parents
(i). Municipal valuation 24,000 42,000
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(ii) Fair Rent (Rent which similar
property would fetch 34,000 36,000
(iii) Standard rent 30,000 45,000
(iv) Municipal taxes paid 6,000 8,000
(v) Repairs 12,000 4,000
(vi) Insurance premium 1,500 1,800
(vii) Interest on loan
Loan availed on 1.4.2005 12,000
Loan availed on 1.4,..1998 60,000
You are required to advise Mr. Mahesh which flat can be treated as self-
occupied and the other deemed to be letout in a manner beneficial to him.
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(c) Distin~ish between a "Belated Return" and a "Revised Return" under the
Income-tax Act, 1961.
3. (a) State with reasons, whether the following statements are true or false with 10
regard to the provisions of Income-tax Act, 1961, for the Assessment Year
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2010-11:
(i) Donation paid by a company to electoral trusts shall be allowed as 100%
deduction in the computation of income of the donor.
(ii) Tax under 194C is not required to be deducted where the aggregate
payment to a person/entity during the previous year does not exceed
Rs. 50,000.
(iii) Daily allowance received by a member of Parliament is exempt upto
Rs. 2,000.
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(iv)The surcharge payable in case of firm, is 10% of Income-tax.
(v) Mr. Y receives Rs. 20,000 towards principal as his contribution towards
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an unrecognised provident fund and Rs. 15,000 as interest thereon, at
the time of his retirement. The sa,me is exempt from tax.
(b) Fill in the blanks with reference to the provisions of Income-tax Act, 1961, for 5
the Assessment Year 2010-11 :
(i) No tax at source under Section 194(1) is required to be deducted where
the aggregate rent paid does not exceed Rs. during the previous
year.
(ii) Short-term capital loss can be carried forward for assessment
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years immediately succeeding the year in which the loss was first
computed.
(iii) The maximum amount of remuneration that can be paid to partners
under Section 40(b), where the book profit is negative is Rs. ........
(iv) Sweat equity shares received by an employee is in the hands of
such employee for the Assessment Year 2010-11.
(v) Surcharge at the rate of per cent is pay,ableby a fQreign company
where its income during the previous year exceeds Rs. 1 crore.
4. Answer the following with reference to Income-tax Act, 1961 3x5=15
:
(a) It is compldlsory to maintain accounts in the case of all assessees ? If not,
state the cases where the books of accounts are to be maintained compulsorily
under the Incogle-tax Act, 1961.
(b) Explain briefly about payments to relatives and associates under Section 40(A)
with regard to the provisions of the Income-tax Act, 1961.
(c) What are the deductions available from Gross total income of a company in
respect of any contribution given to a political party?
5. (a) What are the objects of Central Sales-tax Act, 1956 ? 5
(b) What are the concessions available under the Central Sales-tax Act, 1956 to 5
units located in any special economic zone? 'What are the conditions to be.
fulfilled to avail the benefit? Discuss.
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(c). Fill in the blanks with reference to the provisions of Central Sales-tax Act, 5 .
1956 :
(i) CST on electrical energy is .........
(ii) An appeal against an order demanding security can be made within ........
days of service of order.
(iii) On appointment, the liquidator of a company should inform about his
appointment to the Sales-tax authorities within days of his
appointment.
(iv) Weighment Charges charged separately from buyer form part of
Sales price.
(v) Anil of Mumbai sends goods to Sunil of Surat for doing some job work.
Sunil adds some materials of his own, completes the job and returns the
same to Ani!. The above transaction attract liability to Central
Sales-tax.
6. (a) State with proper reasons whether the following statements are True/False 5
with regards to provisions of Central Sales-tax Act, 1956 :
(i) Sale of newspaper as a waste paper is not considered as sale of goods,
hence no CST is levied.
(ii) A pledge constitutes sale under the CST Act.
(iii) Goods being sent from Kolkata to Darjeeling, pass through the State of
Bihar. It is an inter-state trade.
(iv) Sri Hari of Kanpur sold goods to Sri Om of Kolkata, which the latter
Proposes to sell to parties outside India against orders to be received in
future. Subsequently Sri Om has exported such goods to some overseas
parties. Sri Om claims that the sale is sale in the course of Export.
(v) Rahul's turnover for the year ended 31.3.2010 is Rs. 1,50,000. This includes
Rs. 35,000 goods sold in February, 2010, which have been returned in
April, 2010. Rahul claims that the deduction of the sale price of the goods
returned shall be made in the year of return.
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(b) From the following details, compute the Central Sales-tax payable by the
dealer carrying on business in Kolkata :
Particulars Rs. ~
Turnover for the year which includes 36,00,000
(i) Installation charges 80,000
(ii) Freight, insurance and transport charges
recovered separately in the invoice 1,30,000
(iii) Trade commission for which credit note have
to be issued separately 1,00,000
. (iv) Excise duty' ..... 1,70,000
(v) Goods returned by dealer within six months of sale,
but after the end of financial year 90,000
(vi) Central Sales-tax buyers have issued 'c' Forms for all purchases.
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