2019 (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) Any income arising from transfer of long-term capital asset, being shares and the transaction of sale of such securities is entered into a recognised Stock Exchange in India on or after 01.10.2004 shall be fully exempted.
2) Reserve or Provision for bad and doubtful debt will be fully allowed to be debited u/s 36.
3) From the Assessment Year, 2006-07, speculation loss shall be carried forward for 4 succeeding previous years.
4) Income by way of Interest on Securities held as stock-in-trade is taxable under the head income from other sources.
(b) Fill in the blanks: 1x4=4
1) Income received as rent from sub-letting would be taxable under the head _______.
2) Salary, bonus, interest, commission or remuneration received by a partner and allowed as deduction u/s 40(b) is taxable under the head.
3) Long-term capital loss can be carried forward for _______ succeeding previous years to be set off only from long-term capital gains.
4) All those assets to which one rate of depreciation is applicable are known as _______.
2. Write short notes on any four of the following: 4x4=16
a) Additional Depreciation [Sec. 32(1)(IIA)]
b) Capital Gains exempted from Tax.
c) Deemed Income.
d) Specific Incomes [Sec. 56(2)]
e) Difference between Tax Planning and Tax Avoidance.
3. (a) What is business as per the Income-tax Act, 1961? Explain charging provisions u/s 28 for the income taxable under the head profit and gains from business and profession. 4+10=14
Or
(b) From the following Profit & Loss A/c of Mr. Anil, compute business income for the Assessment Year, 2018-19: 14
Particulars
|
Rs. (DR)
|
Particulars
|
Rs. (CR)
|
To Salaries
To Rent
To Discount
To Depreciation
To Legal Expenses
To Donations
To Municipal Taxes
To Insurance
To Entertainment
To Advertising
To Sales Tax
To Income Tax
To Travelling Expenses
To Provision for Bad Debts
To Net Profit
|
60,000
40,000
10,000
15,000
10,000
8,000
4,000
12,000
15,000
24,000
6,000
8,000
12,000
6,000
3,55,000
|
By Gross Profit
By Rent from House Property
By Interest on Bank Deposits
By Dividends from Indian companies
By Lottery Winnings
By Bad Debts Recovered
|
4,40,000
60,000
20,000
15,000
45,000
5,000
|
5,85,000
|
5,85,000
|
Additional Information:
1) Salaries include Rs. 10,000 paid to proprietor’s son for his casual help.
2) Rent was paid for the godown owned by the proprietor.
3) Out of municipal taxes Rs. 3,000, out of insurance premium Rs. 2,000 relate to let out house property.
4) Allowable depreciation Rs. 22,000.
5) Donations were given to an approved institution.
6) Advertizing bill was paid through bearer cheque.
4. (a) Define ‘capital gain’. Discuss the procedure for computation of capital gain. 4+10=14
Or
(b) Mr. Arindam owns two houses at Jorhat and Dibrugarh. He transfers the following long-term capital assets during 2017-18:
Residential House Property at Dibrugarh
|
Gold
|
Silver
| |
Date of sale
Sale consideration (Rs.)
Indexed cost of acquisition (Rs.)
|
19.04.2017
9,00,000
4,00,000
|
20.04.2017
8,00,000
6,00,000
|
21.04.2017
5,00,000
1,50,000
|
Mr. Arindam purchases the following assets:
Date of purchase
|
Amount invested (Rs.)
| |
Residential house at Guwahati
Bonds of National Highway Authority of India (NHAI)
for the purpose of Section 54EC
|
20.10.2017
19.10.2017
|
7,50,000
2,50,000
|
Ascertain the amount of capital gain chargeable to tax for the Assessment Year, 2018-19. Can Mr. Arindam claim exemptions under Sections 54, 54EC and 54F? 14
5. (a) What are the provisions of the Income-tax Act, 1961 regarding set-off of losses? Discuss briefly the provisions of the Income-tax Act regarding the carry forward of loss from business income and capital gain. 4+10=14
Or
(b) The following are the particulars of income and loss of an individual under different heads of income. Set off losses in the Assessment Year, 2018-19 and find out the Gross Total Income: 14
Particulars
|
Rs.
|
Income from house property A
Loss from house property B
Income from interest on securities
Loss from cycle business
Profit from speculation business
Loss from short-term capital asset
Long-term capital loss
Long-term capital gain (investments)
|
4,000
9,000
25,000
35,000
35,000
7,000
25,500
21,500
|
6. (a) Explain the meaning, need and limitations of tax planning. 14
Or
(b) “A tax planner should have a thorough knowledge of various sources of law relating to the income tax.” Discuss. 14
(OLD COURSE)
Full Marks: 80
Pass Marks: 32
1. (a) Write True or False: 1x4=4
1) Rent paid by a partnership firm to one of its partners for using his house for the business of the firm is an admissible deduction.
2) Term Capital Asset u/s 2(14) includes only tangible asset.
3) Income Tax Authorities shall act as authorities under the Wealth-tax Act.
4) With effect from Assessment Year, 1999-2000 loss under the head house property can be carried forward for 8 succeeding previous years to be set off from income under the head house property only.
(b) Fill in the blanks: 1x4=4
1) 100% of advertisement expenses exceeding Rs. _______ paid in cash are disallowed expenses on computation of profit from business.
2) Cost Inflation Index (CII) for the Assessment Year, 2017-18 is _______.
3) Speculation loss to be carried forward for _______ succeeding previous years [Section 73(4)]
4) When total depreciation is more than available profits, the excess is called _______ depreciation.
2. Write short notes on any four of the following: 4x4=16
a) Inadmissible deduction u/s 40.
b) Capital assets.
c) Carry forward of loss from capital gain.
d) Net wealth under the Wealth-tax Act.
e) General incomes [Section 56(1)]
3. (a) What is understood by the term ‘depreciation’? Discuss the rules regarding grant of deduction for depreciation. 4+8=12
Or
(b) The following is the Profit & Loss A/c of Mr. Gaurav for the year ending 31.03.2018:
Particulars
|
Rs. (DR)
|
Particulars
|
Rs. (CR)
|
To Opening Stock
To Purchases
To Wages
To Rent
To Repairs to Motor Car
To Income Tax paid
To Medical Expenses
To General Expenses
To Bad Debts
To Provision for Bad Debts
To Depreciation
To Profit for the year
|
15,000
40,000
20,000
6,000
3,000
5,000
2,000
10,000
500
1,000
5,000
39,500
|
By Sales
By Closing Stock
By Gift from father
By Sale of Motor Car.
By Refund of Income
|
1,00,000
20,000
15,000
9,000
3,000
|
1,47,000
|
1,47,000
|
Additional Information:
1) Rent includes Rs. 1,000 paid for the residential portion.
2) General expenses include Rs. 1,000 paid to the domestic servant.
3) Depreciation admissible under the Income-Tax Act is Rs. 10,000.
Compute his taxable income from business for the relevant Assessment Year. 12
4. (a) What are capital assets in the context of capital gains? Describe the assets which are outside the purview of capital gains. 4+7=11
Or
(b) What is transfer of capital asset? Under what circumstances a transfer is not regarded as transfer under Section 47 of the Income-tax Act? 4+7=11
5. (a) What is meant by the term ‘assets’ under the Wealth-tax Act? What are the assets mentioned in Section 2(ea) of the Wealth-tax Act? 4+7=11
Or
(b) Explain the deemed assets under the Wealth-tax Act. 11
6. (a) Discuss the provisions of the Income-tax Act, 1961 regarding carry forward and set-off of losses. 11
Or
(b) (1) Describe the rules of set-off of losses from one head against the income of the other head. 6
(2) How loss under the head house property is to be carried forward? 5
7. (a) What is Tax Planning? Distinguish between Tax Planning and Tax Avoidance. 5+6=11
Or
(b) Write short notes on the following: 4+4+3=11
1) Requisites of a Successful Tax Planner.
2) Tax Management.
3) Tax Evasion.
***
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