CA PE - II :: Income Tax and Central Sales Tax : November 2004

Smt. Savita Rani born on 01.07.1938. She is a Deputy Manager in a Company in Mumbai. She is getting a monthly salary and D.A. of Rs. 45,000 and 12,000 respectively. She also gets a House Rent Allowance of Rs. 6,000 per month. She is a member of Recognised P.F. wherein she contributes 15% of her salary and half D.A. Her employer also contributes an equal amount.

During the previous year 2003-2004 her minor son has earned an income of Rs. 30,000 (computed) as rent from a House Property, which had been transferred to him by Smt. Savita Rani without consideration a few years back.

During the previous year 2003-2004 she sold Government of India Capital Indexed Bonds for Rs. 1,50,000 on 30.09.2003, which are purchased on 01.07.2000 for Rs. 80,000 (Cost inflation index-F.Y. 2000-2001—406 and for the F.Y. 2003-2004—463)

Her employer gave her an interest free loan of Rs. 1,50,000 on 01.10.2003 to one of her son's wife for the purchase of an Alto Maruti Car. Nothing has been repaid to the company towards the loan.

Mr. Tony had estates in Rubber, Tea and Coffee. He derives income from them. He has also a nursery wherein he grows plants and sells. For the previous year ending 31.3.2004, he furnishes the following particulars of his sources of income from estates and sale of Plants. You are required to compute the taxable income for the Assessment year 2004-2005:

A Proprietory Business was started by Smt. Rani in the year 2001. As on 1.4.2002 her capital in business was Rs. 3,00,000.

Her husband gifted Rs. 2,00,000, on 10.4.2002, which amount Smt. Rani invested in her business on the same date. Smt. Rani earned profits from her proprietory business for the Financial years 2002-2003, Rs. 1,50,000 and Financial year 2003-2004 Rs. 3,90,000. Compute the income, to be clubbed in the hands of Rani's husband for the Assessment year 2004-2005 with reasons.

State the special provisions in respect of certain undertakings or enterprises in certain special category states as laid down under Section 801C of the Act.

Is it mandatory for an Assessee to claim depreciation under Section 32 of the Income-tax Act?

Ownership itself is the criteria for assessment under the head income from house property. Discuss.

State the conditions to be fulfilled by an Amalgamated Company for carry forward of the Accumulated losses and Unabsorbed depreciation of the Amalgamating Company.

State the provisions relating to the exemption in respect of long-term capital gains on transfer of listed Equity Shares.

The Income-tax Act grants exemption from tax to political parties in respect of their income. The incomes so exempt be stated, as per the provisions of the Act.

Mr. 'X' furnishes the following data for the previous year ending 31.3.2004:

Mr. A is provided with two cars, to be used official and personal work, by his employer ABC Ltd. The following information is available from the company records:

A car purchased by S on 10.8.1999 for Rs. 3,25,000 for personal use is brought into the business of the assessee on 01.12.2003, when its market value is Rs. 1,50,000. Compute the actual cost of the car and the amount of depreciation for the Assessment year 2004-2005 assuming the rate of depreciation to be 20%.

Out of the goods sold for Rs. 1,50,000, on 16.7.2003 that were liable to CST @4%, goods worth Rs. 50,000 were returned on 12.12.2003 and goods worth Rs. 1,20,000 were returned on 01.2.2004. A buyer to whom goods worth Rs. 55,000 carrying 2% CST was despatched on 16.4.2003, rejected the goods and the same were received back on 15.11.2004. Compute the taxable turnover and tax liability of X Ltd., since all the relevant Forms have been received.