|Time Allowed : 3 Hours||Full Marks : 100|
|The figures in the margin on the right side indicate full marks|
|Wherever required, the candidate may make suitable assumptions and|
state them clearly in the answers.
|Working notes should form part of the relevant answers.|
|All questions relate to the assessment year 2011 – 12 and the provisions stated relate to Income Tax Act, 1961,|
unless stated otherwise in the question.
|Answer Question No. 1 which is compulsory and any five from the rest.|
|1.||(a)||Fill up the blanks:||1x12=12|
|(i)||Mr. Nathan acquired on 30–3–2011, a building for Rs. 10 lakhs when the State stamp valuation authority adopted Rs. 15 lakhs for stamp duty purpose. the amount taxable in the hands of Mr. Nathan u/s. 56(2) will be __________.||(1)|
|(ii)||The due date for filling return of income u/s.139(1) in the case of individual assessee having turnover above Rs. 60 lakhs is ___________.||(1)|
|(iii)||Where an employee is paid fixed medical allowance of Rs. 1000 per month, a sum of Rs. ________ is taxable per annum.||(1)|
|(iv)||Salary paid to a working partner of a firm is chargeable to income– tax in the hands of such partner under the head __________.||(1)|
|(v)||Total tax payable on a lottery income of Rs. 3,00,000 as per section 115BB is Rs._________.||(1)|
|(vi)||Payment of education loan________(principal/interest) is deductible under section 80E.||(1)|
|(vii)||Property held under trust of charitable/religious purpose is _________(exempt/non–exempt) from wealth tax.||(1)|
|(viii)||Surcharge is payable by Indian Companies when the total income exceeds _________.||(1)|
|(ix)||Maximum amount exempt in respect of Transport Allowance granted to an employee for commuting between residence and place of work is Rs.________ per month.||(1)|
|(x)||Claim of depreciation is __________(mandatory/optional) while computing business income of the assessee.||(2)|
|(xi)||Advance tax is payable in _______ installments by a non– corporate assessee.||(1)|
|(xii)||The Minimum Alternate Tax rate applicable to certain companies is ________ per cent of the book profits.||(2)|
|(b)||Choose the correct alternative:||1x5=5|
|(i)|| An individual (aged 28 years) born in India left for employment in France on 30.10.2010. His visit outside India is for the first time. His residential status for the assessment year 2011–12 will be |
|(ii)|| Xmas Charities received anonymous donation of Rs. 5 lakhs. The said sum is. |
|(iii)|| Mr.A let out his house property to Mr.B. Mr.B sub–Let the property to Mr.C. The income from sub–letting in the hands of Mr.B will be |
|(iv)|| Miss padmaja received Rs. 50,000 on 13.10.2010 being the unrealized rent pertaining to an earlier year, consequent to court decree. The property to which the unrealized rent relates was sold in the year 2006–2007. The unrealized rent amount received now is ,— |
|(v)|| Guest home is liable for wealth tax |
|(c)||State with reasons whether the following statements are true or false:||2x4=8|
|(i)||Where Mr.VKS(an Indian resident) received Rs. 50,000 as dividend from a foreign company, the same is taxable.||(1)|
|(ii)||Farm house rent received from tenant of agricultural land is chargeable to tax as income from house property.||(1)|
|(iii)||Motor cars held by a dealer in vehicles for trading purposes, are treated as "assets" for purposes of wealth tax.||(1)|
|(iv)||Income from transfer of self–generated goodwill of a profession is not chargeable to tax under the head "Capital gains".||(1)|
|2.||(a)|| Mrs.Sneha, aged 64, has carried on business during the year ended March 31, 2011. The particulars of Profit and Loss Account are given below: |
|(b)||Scindia furnishes the following particulars for the previous year 2010–11: |
A plot of land was sold on 19–7–2010 for Rs. 35,00,000. He paid brokerage on its sales at one per cent. He had purchased this plot on 20–12–1988 for Rs.4,20,000. On 1–2–2010, he had purchased a residential house for Rs.18,00,000. He owns another residential house, purchased on 8–7–2009.
The cost of inflation index for financial years 1988–89 and 2010–11 are 140 and 711 respectively.
Find out the amount of capital gains chargeable to income tax.
Suppose Scindia sells the new residential house on 1–1–2013. What will be the taxable amount of capital gains and in which year it will be charged to tax?
If he purchases any other residential house on 1–6–2012. What will be taxable amount of capital gains and in which year it will be charged to tax? Is the same short–term or long–term in nature?
|3.||(a)|| Mrs.Vasudha retires on 15th Feb., 2011, after serving for 30 years and 5 months. She gets Rs. 10,70,000 as gratuity. Her salary details are as under: |
FY 2010–11 Salary Rs.1,00,000 p.m D.A. 50% of salary.50% there of taken for retirement benefits.
FY2009–10 Salary Rs.90,000 p.m. D.A. 50% of salary.50% there of forms part of retirement benefits.
Compute the taxable amount of gratuity in her hands in the following situations:
|(b)||State the treatment of the following perquisites for income tax purpose in the hands of the employee: |
|(c)||State the conditions under which the political party gets tax exemption under section 13 A in respect of certain types of income/receipts.||3||(0)|
|(d)||Distinguish between inter – source adjustment and inter –head adjustment.||2||(1)|
|4.||(a)|| Mrs.Vimala commenced construction of house meant for residential purpose on 01.11.2008. She raised a loan of Rs. 10 lakhs @ 11% per annum from a bank. Finding that there was over run in the cost of construction, she raised a further loan of Rs. 5 lakhs from her friend at 15% rate of interest per annum on 1.10.2010. The construction was completed by February, 2011. |
Compute the amount of interest allowable exemption under section 24 of the income–tax Act, 1961 in the following cases:
Is there any deduction available u/s. 80C towards principal repayment in respect of above loans?
|(b)|| Mr.Janak receives the following gifts during the previous year 2010–2011: |
Discuss the taxability of each of the above as income from other sources.
|(c)||What do you mean by annexure less return? In what manner can the return of income be filed?||4||(0)|
|5.||(a)||Miss Vivitha, who carried on wholesale cum retail trade during the year 2010–11, reports a turnover of Rs. 52,50,000. |
WDV of plant as on 01.04.2010 was Rs. 3,10,000.
On 01.12.2010, she acquired a plant for Rs. 50,000.
Net profit as per profit and loss account (before depreciation) was Rs. 4,35,000.
Compute business income both under regular provisions and applicable presumptive provisions of the Act.
State what would be the income chargeable to tax with the conditions to be complied with in this regard.
|(b)|| Mrs. Arundhati aged 70 years furnishes, the following details for the assessment year 2011–12: |
Compute total income of Mrs.Arundhati and her tax liability.
|(c)||What is the due date of filling of return of income in case of a non–working partner of a firm whose accounts are subject to tax audit? who is regarded as ‘working partner’?.||3||(0)|
|6.||(a)||Mr.Rajiv commenced business with a capital of Rs.2 lakhs in the financial year 2004–05. His capital as on 1.4.2009 was Rs. 5 lakhs. His wife gifted Rs. 1 lakh on 10.04.2009, which was also invested in the business. |
His Net profit for the year 2009–10 = Rs.2 lakhs
His Net profit for the year 2010–11 = Rs. 4 lakhs
Compute the income from business to be clubbed in the hands of Mrs. Rajiv and the income from business taxable in the hands of Mr. Rajiv for the assessment year 2011–12.
Mr. Rajiv did not withdraw any money from the business from 01.04.2009 to 31.03.2010.
|(b)|| Johnson is provided 2 cars by his company ABC Ltd. Other pertinent details are as under: |
Compute the perquisite value of car on the assumption that Car 1 is meant for both official and personal use and that Car 2 is meant for exclusive personal use.
|(c)||Vasudevan converted jewellery/ornaments owned by him into stock in trade on 1.9.2010, when he commenced a sole proprietary business by name Vaasu Jewellers. The jewellery/ornaments were acquired on 1.4.1975 for Rs.2,00,000. The FMV on 1.4.1981 was Rs. 4 lakhs. The market value on 1.9.2010 was RS. 35 lakhs. |
He recorded the value at Rs. 25 lakhs in his books of account.
Compute taxable capital gain chargeable to tax.
If the entire jewellery stock so converted was sold for Rs. 32 lakhs before 31.03.2011, how much is taxable and under what head it is taxable?
Clearly indicate the assessment years in which the above are taxable. Cost inflation indices for financial years 1981–82 and 2010–11 are 100 and 711 respectively.
|7.||(a)|| Banerjee, a person of Indian origin was working in Australia from 1997. He returned to India for permanent settlement in May , 2009, when he remitte money into India. For the valuation date 31st March, 2011, the following particulars were furnished: |
You are required to compute the taxable wealth as on 31–3–2011.The reason for inclusion or exclusion of each item above should be stated.
|(b)||What is a protective assessment under income–tax law? When is it resorted to and what is the procedure followed for the recovery of tax in such cases? Can penalty be imposed in a protective assessment?||4||(0)|
|8.||(a)||X held 18% shares in a private limited company. He gifted all the shares to his wife Y on 1st Nov., 2010. Y obtained a loan of Rs. 8,00,000 from the company when the company’s accumulated profit was Rs. 6,00,000. What are the tax implications of the above transaction?||2||(0)|
|(b)|| Mr. Ramachandran submits details of his income/savings for the previous year 2010–11 as below: |
Compute the tax liability of Mr. Ramachandran.
|(c)||Discuss the liability towards deduction of tax at source in the following cases: |