| 1. | The following information is available regarding X Ltd, for the year ending 31st March, 2002. During the year, the company has – | (i) | Purchased wheat for its canteen from an agriculturer for Rs. 50,000 in cash; | | (ii) | Purchased a new plant costing Rs. 3,00,000 on deferred payment (interest payable for the period subsequent to the installation amounting to Rs. 1,00,000 has been capitalized along with the cost) | | (iii) | Increased Rs. 20,000 for digging a bore well, which, however, did not yield any water; | | (iv) | Purchased certain equipment for its research laboratory at a cost of Rs. 1,50,000, which was capitalized. | | (v) | Supplied spare parts to customers (free of charge) under a warranty clause (cost is Rs. 1,20,000, normal selling price Rs. 1,80,000); | | (vi) | Increased Rs. 1,70,000 towards training an employee in Germany (Air fare Rs. 1,00,000 and daily allowance at Rs. 2,000 per day 35 days.) The Assessing Officer wants to treat the expense as capital expenditure and as being above prescribed limits, as held in the past; | | (vii) | Purchased a building for Rs. 5,00,000, to be used exclusively as a family planning centre for the employees; | | (viii) | Donated Rs. 1,00,000 to the Prime Minister’s National Relief Fund; | | (ix) | Paid interest of Rs. 30,000 for a shortfall in advance tax paid for the financial year 1999–2000. | | How would you deal with the above in computing total Income? |
| 18 | (0) |
| 2. | X is cost accountant in ABC Ltd. at Bombay and gets Rs. 18,000 per month as salary. He owns two houses one of which is let out to ABC Ltd. and provided by the company to X as rent–free quarters. Determine the total income of X for the assessment year, after taking into account the following information regarding his house properties:
Fair rent (Rent Control Act is not applicable)
Let out for Rent
Municipal Valuation
Municipal Taxes paid
Repairing Costs
Fire Insurance Premium paid
Land Revenue
Ground Rent
Interest on money borrowed by mortgaging
House I for construction of House II
Nature of occupation | House I
(Rs.)
60,000
63,000
61,000
14,000
3,500
3,000
7,500
4,000
18,000
Let out to ABC Ltd.
and provide to X
are rent–free
quarters. | House II
(Rs.)
1,82,000
1,84,000
1,85,000
40,000
7,700
33,000
24,000
7,800
–
Let out to
Y for the
letter’s
business. |
| 16 | (0) |
| 3. | X Ltd. is a company carrying on business in the construction and sale of residential flats. Compute the net wealth on the basis of the following information and the wealth tax payable for the assessment year 2002–2003.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12) |
Land in rural area (within 5 kms of Ajmer, construction
is permissible; land was purchased in 1987)
Land in urban area (construction not permitted as per law)
Land in urban area (held as stock–in–trade since 1994. construction just started.
Motor cars (including an imported car valued at Rs. 4,00,000)
Jewelery
Aircraft for use by directors & employees
Cash at bank
Cash in Hand as per Cash Book
Guest–house situated in Ajmer
6 residential flats of identical size alloted to 6 employees (salary of two
of them being in excess of Rs. 5,00,000 per annum) near the factory
Residence provided to Managing Director (salary exceeds Rs. 5,00,000 per annum)
Flats constructed but remaining unsold | Market value
Rs.
92,78,600
23,00,000
49,50,000
11,30,000
18,00,000
1,58,00,000
3,10,000
1,70,000
8,00,000
15,00,000
10,00,000
30,00,000 | | (13) | Three let out residential houses (each valued at Rs. 10 lakh, one having
been let out for only 50 days during the financial year 2001-2002) |
The company has taken a loan of Rs. 6 lakh, Rs. 7 lakh, Rs. 1,50,000 and Rs. 1,90,000 for acquiring the assets at Item nos. 3, 5, 6 & 12. | 16 | (0) |
| 4. | X, Y and Z are partners of the trading firm XYZ & Co., sharing profits and losses as X: Y: Z:: 5: 3: 2, and interest and other remuneration are paid to them as per Deed of Partnership. The Profit & Loss A/c of the Firm for the year ended 31st March, 2002 is as below:
Remuneration to Partners
X : Rs. 50,000
Y : Rs. 30,000
Z : Rs. 20,000 | Rs.
1,00,000 |
Gross Profit
Rent of House
Bank Interest
(Fixed Deposit) | Rs.
4,95,000
70,000
16,000 | Interest Loan of Y @ 20% p.a.
Interest on Capital at 24% p.a.
X : Rs. 24,000
Z : Rs. 72,000
Bonus to Y | 40,000
96,000
10,000 | Sale proceeds of
Depreciable Assets
(wdv. Nil)
Gain on sale of shares
purchased in 1999–2000 |
80,000
30,000 | Commission to Z
Municipal Tax for house (paid)
Establishment charges
Depreciation
Provision for Bad Debts
Donation to Gujarat
Earthquake Fund
sundry Expenses | 8,000
12,000
50,000
25,000
4,000
3,000
85,000 | Dividend from
Indian Company
Bad Debts recovered
Commission from Agency |
12,000
8,000
35,000 | Share Profit
X : Rs. 1,56,500
Y : Rs. 93,900
Z : Rs. 62,600 | 3,13,000 | | | 7,46,000 | | 7,46,000 |
Other information: | (a) | Municipal tax paid includes arrears of Rs. 2,000 for the preceding year. | | (b) | Depreciation as per income Tax Rules, Rs. 35,000. | | (c) | On 30.5.2002, the firm paid sales tax of Rs. 15,000 relating to the 1999—2000 and submitted the challenge to the Assessing Officer with the Income–Tax Return. | | (d) | Sundry expenses include Rs. 60,000 paid in cash to a supplier. | | (e) | The whole block of plant and machinery depreciated at 100% was sold for Rs. 80,000 as shown in the Profit & Loss A/c. | Compute: | (1) | The Book Profit | | (2) | Total Income and Tax of the Firm for the Assessment Year 2002—2003. |
|
| 16 | (0) |
