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Sunday, December 09, 2018

Dibrugarh University Question Papers: Direct Tax - II (May' 2018)


2018
(May)
COMMERCE
(Speciality)
Course: 601
(Direct Tax - II)
Time: 3 hours
The figures in the margin indicate full marks for the questions
 (NEW COURSE)
Full Marks: 80
Pass Marks: 24

1. (a) Write True or False:                             1x4=4
1)      Preliminary expenditure incurred after 31.03.2008 are allowed deduction in 10 equal installments.
2)      Conversion of debentures into shares shall not be regarded as transfer for capital gain purpose.
3)      If no system of accounting is followed, interest on securities is taxable on receipts basis.
4)      Loss on account of owning and maintaining the racehorse can be carried forward indefinitely.
(b) Fill in the blanks:                                        1x4=4
1)      Short-term capital loss on particular assessment year can be set off in the same assessment year from _____.
2)      For claiming exemption under Section 54, the assessee should construct the residential property within _____ years after the date of transfer.
3)      Interest on units of a Mutual Fund on or after April 1, 2003 shall be _____.
4)      Where a part of the block of assets is sold for a price less than the opening WDV plus cost of assets, if any, acquired during the year, the balance amount shall be treated as _____ for charging depreciation.
2. Write short notes on any four of the following:                                             4x4=16
a)      Block of assets.
b)      Chargeability under the head ‘Profits and gains of business or profession’.
c)       Long-term and short-term capital gains.
d)      Not allowable deductions from ‘income from other sources’.
e)      Carry forward of business losses.
3. (a) What do you understand by the term ‘depreciation’? What are the rules regarding grant of deduction for depreciation?                                    4+10=14
Or
(b) The following are the fixed assets owned and used by a firm in its business of manufacturing articles for the assessment year, 2016-17:
Block of Assets
WDV on
01.04.2015
(Rs.)
Addition during the year
(Rs.)
Rate of
Depreciation
(a) Factory
Building
10,00,000
2,00,000
(Completed on
01.01.2016)
10%
(b) Residential
Building
5,00,000
1,00,000
(Completed on
01.05.2015)
5%
(c) Plant and
Machinery
45,00,000
15,00,000
(installed on
15.06.2015)
15%
(d) Furniture
and Fittings
2,00,000
50,000
(Put to use on
13.04.2016)
10%
Calculated the total amount of depreciation.                                  14
4. (a) Explain, in detail, capital gain exempted from tax.                                                 14
Or
(b) Mr. S submits the following particulars about the sale of assets during the year, 2014-15:                   14

Jewellery
(Rs.)
Land
(Rs.)
Gold
(Rs.)
Sales Price
Expenses on sales
Cost of acquisition
Year of acquisition
CII
5,00,000
-
60,000
1987-88
150
18,50,000
50,000
2,10,000
1984-85
125
3,50,000
-
1,00,000
1999-2000
389
Calculate the amount of capital gain chargeable to tax for the assessment year 2015-16 if CII for 2014-15 is 1024.  
5. (a) Explain the provisions of the Income-tax Act regarding carry forward of losses.                       14
Or
(b) Mr. A furnishes the following particulars of his income for the assessment year 2016-17. You are required to deal with set-off and carry forward of losses:                         14

(Rs.)
Profit from wholesale business
Income from an agency business
Speculation income
Short-term capital gain
Long-term capital gain
50,000
4,000
1,000
6,000
12,000
The carry forward items from the assessment year, 2015-16 are:

(Rs.)
Loss from retail business(now discontinued)
Loss in agency business
Loss from wholesale business
Speculation loss
Short-term capital loss
Long-term capital loss
5,000
6,000
5,000
6,000
7,500
9,000
Current year’s depreciation for wholesale business is Rs. 2,500.
6. (a) Explain the important areas where tax planning may be attempted.                             14
Or
(b) What propositions may an employee consider for the purpose of tax planning under the head ‘Salaries’?
(OLD COURSE)
Full Marks: 80
Pass Marks: 32

1. (a) Write True or False:                             1x4=4
1)      Unabsorbed depreciation which could not be set off in the same assessment year, can be carried forward for 8 years.
2)      Exemption under Section 54F shall not be allowed if the assessee, on the date of transfer, owns any residential house.
3)      Income under the head ‘income from other sources’ is taxable on due basis.
4)      A business loss can be carried forward and set off in the subsequent assessment year whether the business on account of which this loss has arisen is continued or not.
(b) Fill in the blanks:                                        1x4=4
1)      Dividend declared by a domestic company shall be _____.
2)      Wealth tax is no longer applicable from the assessment year _____ onwards.
3)      For claiming exemption u/s 54B, the asset transferred should be _____.
4)      Loss on account of owning and maintaining racehorses can be carried forward for _____ years.
2. Write short notes on any four of the following:                             4x4=16
a)      Amortisation of preliminary expenses.
b)      Unabsorbed depreciation.
c)       Cost of acquisition.
d)      Carry forward of capital losses.
e)      Exempted assets under the Wealth-tax Act.
3. (a) What are the incomes which are chargeable to tax under the head ‘Profits and gains of Business or profession’? Discuss in detail.                               12
Or
(b) Mr. X, a businessman, submits the following Profit and Loss Account for the year ending 31.03.2016:          12
Particulars
(Rs.)
Particulars
(Rs.)
Salaries
Travelling Expenses
Rent and Taxes
Interest on Capital
Administrative Charges
Depreciation
Income Tax
Net Profit
75,000
1,25,800
3,000
5,000
25,000
25,000
50,000
3,76,200
Gross Profit
Interest on Company deposits
Discount received
6,75,000
8,500
1,500

6,85,000

6,85,000
The following additional information is furnished:
1)      Salaries include a payment of Rs. 30,000 to Mrs. X, who is acting as supervisor of the quality control department. She does not have any other income during this year. Till February, 2015 she was employed in Z Ltd. In a similar post for 10 years and was drawing a monthly salary of Rs. 2,000.
2)      X had gone on a foreign tour in connection with business. The journey was for 15 days in which he spent 3 days on visiting tourist spots. Total expenses incurred in respect of this foreign tour were Rs. 80,000.
3)      Depreciation allowance as per the Income-tax Rules, 1962 is Rs. 45,000.
4)      X raised a loan from LIC of India on the security of his life insurance policy and used the same for the payment of expenses relating to repairs of machinery. Interest of Rs. 3,000 in respect of this loan was paid out of his drawings.
From the above particulars, compute the business income of Mr. X to be taxable for the assessment year 2016-17.
4. (a) (1) How to convert cost of acquisition into indexed cost of acquisition?                       3
(2) Explain the method of computation of short-term and long-term capital gain.                  8
Or
(b) (1) State any six items of income included in Section 56(1) under the head ‘Income from other sources’.    6
(2) State any five items deductible under Section 57 in computing taxable income under the head ‘Income from other sources’.                              5
5. (a) What are the assets mentioned in Section 2(ea) of the Wealth-tax Act, 1957? Discuss in detail.                        11
Or
(b) What is net wealth? How is it computed?                                  4+7=11
6. (a) Write the provisions of the Income-tax Act regarding carry forward and set off of business loss and capital loss.   11
Or
(b) From the following details, compute the gross total income of Mr. B for the assessment year, 2016-17:

Rs.
Taxable income from salary
Income from house property:
House A (let out)
House B (self-occupied, interest on borrowed money)
Short-term capital gain
Long-term capital loss
Interest on securities (gross)
80,000

(-) 95,000
(-) 9,000
12,000
25,000
10,000

7. (a) (1) Distinguish between tax planning and tax management.                             7
(2) Distinguish between tax planning and tax evasion.                        4
Or
(b) What are the objectives of tax planning? “Tax evasion is a crime, but tax avoidance is not.” Comment briefly.           7+4=11

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