|Total No. of Questions — 7]||[Total No. of Printed Pages — 11|
|Time Allowed : 3 Hours||Maximum Marks : 100|
| Answers to questions are to be given only in English except in case of candidates who have|
opted for Hindi Medium. If a candidate who has not opted for Hindi medium,
answers in Hindi, his answers in Hindi will not be valued.
|Question No. 1 is compulsory.|
|Answer any five questions from the remaining six questions.|
|Wherever required, suitable assumptions may be made by the candidates. |
Working notes should form part of the answer.
|1.||(a)||Rao & Jain, a partnership firm consisting of two partners, reports a net profit of Rs. 7,00,000 before deduction of the following items: |
|(b)||Shri. Madan (age 67 years) gifted a building owned by him to his son’s wife Smt. Hema on 01–10–2010. The building fetched a rental income of Rs. 10,000 per month throughout the year. Municipal tax for the first half–year of Rs. 5,000was paid in June 2010 and the municipal tax for the second half–year was not paid till 30–09–2011. |
Incomes of Shri. Madan and Smt. Hema other than income from house property are given below:
Compute the total income of Shri. Madan and Smt. Hema taking into account income from property given above and also compute their income–tax liability for the assessment year 2011–12.
|(c)||Vikas Coaching Centre engaged in commercial training and coaching service furnishes you the following information and the amounts received by it for the half–year ended 31–03–2011. |
|(d)||Laxman, a registered dealer submits the following information for the month of February, 2011. |
Assume that there was no opening or closing inventory. Compute the amount of Value Added Tax (VAT) payable by Laxman for the month of February, 2011.
|2.||(a)||Mr. Balaji, employed as Production Manager in Beta Ltd., furnishes you the following information for the year ended 31–03–2011 : |
|(c)||Explain the role of chartered Accountants in proper compliance of VAT. (Any 4 points).||4||(0)|
|3.||(a)||Mr. Selvan, acquired a residential house in January, 2000 for Rs. 10,00,000 and made some improvements by way of additional construction to the house, incurring expenditure of Rs. 2,00,000 in October, 2004. He sold the house property in October, 2010 for Rs. 75,00,000. The value of property was adopted as Rs. 80,00,000 by the State stamp valuation authority for registration purpose. He acquired a residential house in January, 2010 for Rs. 25,00,000. He deposited Rs. 20,00,000 in capital gains bonds issued by National Highways Authority of , India (NHAI) in June, 2011. |
Compute the capital gain chargeable to tax for the assessment year 2011–12.
What would be the tax consequence and in which assessment year it would be taxable, if the house property acquired in January, 2010 is, sold for Rs. 40,00,000 in March, 2012 ?
|(b)||ABC Private Ltd., is engaged in providing a taxable service. For the month of January 2011, its gross receipts were Rs. 18,00,000. The break–up of these receipts are as follows: |
|(c)||State any two benefits and two drawbacks for a dealer who opts for composition scheme under VAT as per White Paper.||4||(0)|
|4.||(a)||Ramji Ltd., engaged in manufacture of medicines (pharmaceuticals) furnishes the following information for the year ended 31–03–2011 : |
Note: Computation of total income is not required.
|(b)||Explain optional composition scheme under Service tax for distributor or selling agents of lotteries.||4||(0)|
|(c)||State with reasons whether the following are true or false in the context or VAT as per White Paper: |
|5.||(a)||Mr. Chandran (aged 38) owned 6 heavy goods vehicles as on 01–04–2010. He acquired 2 more heavy goods vehicles on 1–7–2010. He is solely engaged in the business of plying goods vehicles on hire since financial year 2006–07. |
He did not opt for presumptive provision contained in section 44 AE for the financial year 2009–10. His books were audited under section 44 AB and the return of income was filed on 5-8-2010. He has unabsorbed depreciation of Rs. 70,000 and Business loss of Rs. 1,00,000 for the financial year 2009–10.
|(b)||State the contents of Service tax return. (any eight points).||4||(0)|
|(c)||Ashok, purchased raw material ‘A’ for Rs. 30,00,000 plus VAT @ 4%. Out of such raw material 60% was used for manufacture of taxable goods and the remaining for manufacture of goods which are exempt from VAT. |
Another raw material ‘B’ was purchased for Rs. 15,00,000 on which VAT was paid at 1%. Entire raw material ‘B’ was used for manufacture of taxable goods only.
The entire taxable goods were sold for Rs. 50,00,000 plus VAT @ 12.5%.
Compute VAT liability of Ashok on the assumption that there was no opening or closing Inventory.
Note: Ashok is not a dealer who opted for Composition Scheme.
|6.||(a)||(i)||Brett Lee, an Australian cricket player visits India for 100 days in every financial year. This has been his practice for the past 10 financial years. Find out his residential status for the assessment year 2011–2012.||2x4=8||(0)|
|(ii)||On 10–10–2010, Mr. Govind (a bank employee) received Rs. 5,00,000 towards interest on enhanced compensation from State Government in respect of compulsory acquisition of his land effected during the financial year 2005–06. |
Out of this interest, Rs. 1,50,000 relates to the financial year 2007‐08; Rs. 1,65,000 to the financial year 2008–09; and Rs. 1,85,000 to the financial year 2009–10. He incurred Rs. 50,000 by way of legal expenses to receive the interest on such enhanced compensation.
How much of interest on enhanced compensation would be chargeable to tax for the assessment year 2011–12 ?
|(b)||Write short notes on Service Tax Code Number and the objective sought to be achieved thereunder.||4||(0)|
|(c)||Briefly explain the benefits of the system of cross7–checking under VAT as per White Paper.||4||(0)|
|7.||(a)||Answer any two of the following three sub divisions:||2x4=8|
|(i)||State any four of the specified businesses eligible for deduction under section 35 AD of the Income–tax Act, 1961.||(0)|
|(ii)||State the applicability of TDS provisions and TDS amount in the following cases: |
|(iii)||State with reasons whether you agree or disagree with the following statements: |
|(b)||Vaibhav Cargo Ltd., is engaged in providing Cargo Handling Service. In January 2011, it received Rs. 150 lakhs for the service rendered. |
The break–up of the total receipts are given below:
|(c)||X Co., furnishes you the following information : |
Raw material purchased Rs. 5,00,000 plus VAT @ 4%.
Manufacturing expenses (revenue nature) Rs. 2,00,000.
Sale price Rs. 8,00,000 plus VAT @ 4%.
Plant & machinery acquired Rs. 2,50,000 plus VAT @ 4% eligible for input tax credit in the year of acquisition itself
Compute VAT Liability under (i) gross product variant.
(ii) consumption variant.
State which variant is beneficial to the dealer?