ICSI Syllabus For Executive Group1<\/p>\n
Tax Laws<\/p>\n
June 2010<\/p>\n
Time allowed : 3 hours Maximum marks : 100<\/strong> PART\u2014A<\/strong><\/p>\n (Answer Question No.1 which is compulsory (v) In whose total income, the income of a minor child is included \u2014 2. (a) Re-write the following sentences after filling-in the blank spaces with appropriate (c) Ram and Shyam are partners in Mozart Co., a partnership firm, which is engaged 4. (a) Raman has following assets and liabilities as on 31st March, 2010. Compute his 5. (a) Amit is a cloth merchant in Ghaziabad. From the following profit and loss account 6. (a) Naveen owns a house at Indore. Its municipal valuation is Rs.24,000. He incurred PART\u2014B<\/strong><\/p>\n 7. Attempt any four of the following : (c) (i) When is an assessee registered under service tax required to surrender the PART\u2014C<\/strong><\/p>\n 8. Attempt any four of the following : ICSI Syllabus For Executive Group1 Tax Laws June 2010 Time allowed : 3 hours Maximum marks : 100 Total number of questions : 8\u00a0 NOTE : All references to sections mentioned in Part-A of the Question Paper relate to the Income-tax Act, 1961 and the relevant Assessment Year 2010-11 unless stated otherwise. PART\u2014A (Answer Question … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[2873],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/20593"}],"collection":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=20593"}],"version-history":[{"count":1,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/20593\/revisions"}],"predecessor-version":[{"id":115918,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/20593\/revisions\/115918"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=20593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=20593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=20593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nTotal number of questions : 8\u00a0<\/strong>
\nNOTE : All references to sections mentioned in Part-A of the Question Paper relate to the
\nIncome-tax Act, 1961 and the relevant Assessment Year 2010-11 unless stated
\notherwise.<\/p>\n
\nand any three of the rest from this part.)
\n1. (a) Choose the most appropriate answer from the given options in respect of the
\nfollowing having regard to the provisions of the relevant direct tax laws :
\n(i) Which of the following income is agricultural income \u2014
\n(a) Rent received from agricultural land
\n(b) Income from dairy farm
\n(c) Income from poultry farm
\n(d) Dividend from a company engaged in agriculture.
\n(ii) The term \u2018income\u2019 includes the following types of incomes \u2014
\n(a) Legal
\n(b) Illegal
\n(c) Legal and illegal both
\n(d) None of the above.
\n(iii) Every year, the residential status of an assessee \u2014
\n(a) May change
\n(b) Will certainly change
\n(c) Will not change
\n(d) None of the above.
\n(iv) Sneha is an employee in a private company. In the previous year she received
\nsalary Rs.1,80,000 and entertainment allowance Rs.12,000. She spent Rs.6,000
\non entertainment. Under section 16(ii), she is entitled to deduction of \u2014
\n(a) Rs.12,000
\n(b) Rs.6,000
\n(c) Rs.5,000
\n(d) Nil.
\nTax Laws<\/strong><\/p>\n
\n(a) Father
\n(b) Mother
\n(c) Father and mother both
\n(d) Parent whose total income is greater.
\n(1 mark each)
\n(b) State, with reasons in brief, whether the following statements are correct or incorrect :
\n(i) An Indian company is always resident in India no matter where and to what
\nextent its control and management is situated.
\n(ii) Rent from house property let-out by an assessee to his employees when such
\nletting is incidental to his main business, will be chargeable to tax under the
\nhead \u2018income from house property\u2019.
\n(iii) Income by way of winnings from lotteries in the hands of a dealer as a
\nregular business activity is not chargeable to tax under the head \u2018profits and
\ngains of business or profession\u2019.
\n(iv) Income from transfer of self-generated goodwill of a profession is not chargeable
\nto tax under the head \u2018capital gains\u2019.
\n(v) Literary awards instituted by the Central Government are exempted from
\nincome-tax.
\n(1 mark each)
\n(c) Particulars of income received by Mrs. Sarita for the year ended 31st March, 2010
\nare as follows :
\n(i) Family pension received from the Government of Madhya Pradesh Rs.15,000.
\n(ii) Royalty received from a publisher Rs.42,700. She spent Rs.2,700 on books,
\nstationery, typing, etc.
\n(iii) Winnings from lotteries (gross) Rs.90,000.
\n(iv) Winnings from horse race (net) Rs.35,000.
\n(v) Interest from tax-free debentures of a public company (listed) Rs.18,000.
\n(vi) Interest on tax-free notified government bonds Rs.10,000.
\n(vii) Dividend received from a foreign company (net) Rs.8,000. Nothing has been
\npaid to the Government of India out of tax deducted at source.
\nFrom the above information, compute income from other sources of Mrs. Sarita for
\nthe assessment year 2010-11.
\n(5 marks)<\/p>\n
\nword(s)\/figure(s) :
\n(i) The maximum exemption limit under the Income-tax Act, 1961 in case of a
\nwoman who is less than 65 years of age and who is non-resident in India is
\nRs.______________.
\n(ii) The time limit for filing an appeal before the appellate tribunal on receipt of
\nan appeal order from the Commissioner is _________ days.
\n(iii) Wealth-tax is charged at the rate of _________ % on net wealth in excess of
\nRs. _________ lakh under the Wealth-tax Act, 1957.
\n(iv) Business loss relating to illegal business is _________ as deduction.
\n(v) Marriage gift from a non-relative is _________ to tax.
\n(1 mark each)
\n(b) Write short notes on any two of the following :
\n(i) Belated return
\n(ii) Taxation of zero coupon bonds
\n(iii) Profit in lieu of salary.
\n(3 marks each)
\n(c) Discuss the procedure for rectification of mistakes under the Income-tax Act, 1961.
\n(4 marks)
\n3. (a) An asset is transferred by a person to another person under a partly revocable
\ntransfer whereby a part of the asset will revert back to the transferor. Who
\nshall be liable to pay tax in respect of income from the asset transferred as per
\nsection 61 ?
\n(2 marks)
\n(b) Distinguish between any three of the following :
\n(i) \u2018Mercantile system of accounting\u2019 and \u2018cash system of accounting\u2019.
\n(ii) \u2018Free trade zone\u2019 and \u2018special economic zone\u2019.
\n(iii) \u2018Exemption to capital gains under section 54G\u2019 and \u2018exemption to capital
\ngains under section 54GA\u2019.
\n(iv) \u2018Intra-head adjustment\u2019 and \u2018inter-head adjustment\u2019.
\n(2 marks each)<\/p>\n
\nin manufacturing carpets. They share profits and losses in the ratio of 2:3. The
\nprofit and loss account of the firm for the year ended 31st March, 2010 is as follows :
\nLiabilities Rs.
\nCost of goods sold 10,00,000
\nDepreciation 50,000
\nSalary to staff 1,00,000
\nRemuneration to partners :
\nRam Rs.2,50,000
\nShyam Rs.1,20,000 3,70,000
\nInterest on capital @15% :
\nRam Rs.45,000
\nShyam Rs.67,500 1,12,500
\nSundry expenses 1,00,500
\nNet profit 7,35,200
\n24,68,200
\nAssets
\nSales 23,00,000
\nDividends 28,200
\nWinnings from lotteries (Rs.2,00,000) 1,40,000
\n24,68,200
\nAdditional information :
\n(i) The firm donated Rs.30,000 to National Defence Fund and this amount is
\nincluded in sundry expenses.
\n(ii) Depreciation admissible under the income-tax rules is Rs.68,000.
\n(iii) The firm is evidenced by partnership deed.
\nCompute the taxable income and amount of tax liability of the firm for the assessment
\nyear 2010-11.
\n(7 marks)<\/p>\n
\nnet wealth and wealth-tax liability for the assessment year 2010-11 :
\nMarket Value
\n(Rs.)
\n(i) Cash in hand 75,000
\n(ii) Cash at bank 10,00,000
\n(iii) Residential house (Loan taken to purchase this
\nhouse Rs.5,00,000) 45,00,000
\n(iv) Land in rural area (it is within 5 kms. from Delhi) 48,00,000
\n(v) Land in urban area (construction not permitted
\nunder the law, loan taken to purchase this
\nland Rs.3,00,000) 28,00,000
\n(vi) Motor car for personal use 14,00,000
\n(vii) Jewellery 6,00,000
\n(viii) Aircraft for personal use (Loan taken to purchase
\naircraft Rs.20,00,000) 1,00,00,000
\n(ix) Farm house situated within 20 kms. from local
\nlimits of municipality 24,00,000
\n(x) One let-out residential house given on rent
\nthroughout the year (Loan taken to construct
\nthis house Rs.2,00,000) 20,00,000
\n(5 marks)
\n(b) State the provisions regarding deduction of tax at source in respect of the
\nfollowing incomes :
\n(i) Winnings from horse races.
\n(ii) Payment by way of fees or royalty for professional or technical services.
\n(iii) Payment of compensation on acquisition of immovable property.
\n(2 marks each)
\n(c) Discuss the cases in which payment by way of loan\/advance to the extent of
\naccumulated profits by a closely held company is treated as dividend under
\nsection 2(22)(e).
\n(4 marks)<\/p>\n
\nfor the year ended 31st March, 2010, compute his taxable income and tax payable
\nfor the assessment year 2010-11 :
\nRs. Rs.
\nOpening stock 1,00,000 Sales 40,00,000
\nPurchases 25,00,000 Closing stock 3,00,000
\nReserve for bad debts 10,000 Gift form friend 70,000
\nHousehold expenses 20,000 Gift from brother 80,000
\nAdvertisement 40,000
\nDepreciation 20,000
\nSalaries and wages 1,20,000
\nReserve for future losses 20,000
\nTravelling expenses 15,000
\nExpenditure on scientific research 50,000
\nNet profit 15,55,000
\n44,50,000 44,50,000
\nAdditional information :
\n(i) Household expenses include an amount of Rs.5,000 paid for premium on life
\ninsurance policy of Amit.
\n(ii) Depreciation admissible as per the income-tax rules is Rs.30,000.
\n(iii) Advertisement costing Rs.10,000 appeared in a newspaper owned by a political
\nparty is included in the total amount spent on advertisement.
\n(iv) Expenditure on air fare from Delhi to Bangalore and from Bangalore to Delhi
\nof a sales manager costing Rs.10,000 is included in travelling expenses. The
\nsales manager is otherwise entitled for a second class AC train where the
\nexpenditure would be Rs.4,000.
\n(v) Expenditure on scientific research relates to the money spent by Amit on
\nconducting research relating to the business of cement which he proposes to
\nundertake in future.
\n(7 marks)
\n(b) Explain with the help of suitable illustration how capital gains are computed
\nunder section 45(2) in case of conversion of capital asset into stock-in-trade.
\n(4 marks)
\n(c) Describe the powers of Central Board of Direct Taxes (CBDT) under the Incometax
\nAct, 1961.
\n(4 marks)<\/p>\n
\nthe following expenses in respect of the house property :
\nMunicipal tax @ 20%, fire insurance premium Rs.2,000 and land revenue Rs.2,400.
\nHe took a loan of Rs.25,000 @16% per annum on 1st April, 2006. The whole
\namount is still unpaid. The house was completed on 1st April 2009. Find out the
\nincome from house property for the assessment year 2010-11 in respect of the
\nfollowing options :
\n(i) If the house is used by the assessee throughout the previous year for his
\nresidential purpose; and
\n(ii) If the house is let-out for residential purposes on monthly rent of Rs.2,000
\nfrom 1st April, 2009 to 31st January, 2010 and self-occupied for the remaining
\nperiod.
\n(6 marks)
\n(b) What are the due dates of payment of advance tax in the case of corporate and
\nnon-corporate assessees ?
\n(3 marks)
\n(c) How is the liability to advance tax computed as per provisions of section 210 ?
\n(3 marks)
\n(d) Explain the deductions which are available to an assessee under section 57 while
\ncomputing taxable income chargeable under the head \u2018income from other sources\u2019.
\n(3 marks)<\/p>\n
\n(a) As per rule 2(1)(d) of the Service Tax Rules, 1994, who is the person specified to
\nbe liable for paying service tax in respect of the following services \u2014
\n(i) Telecommunication services.
\n(ii) Services in relation to general insurance business.
\n(iii) Services in relation to any taxable service or service to be provided by any
\nperson from a foreign country to any person in India.
\n(iv) Business auxiliary service of distribution of mutual fund by a mutual fund
\ndistributor or an agent, as the case may be.
\n(v) Sponsorship services provided to any body corporate or firm located in India.
\n(1 mark each)
\n(b) (i) Which category of persons must mandatorily obtain registration under
\nChapter V of the Finance Act, 1994 ?
\n(3 marks)
\n(ii) What are the time limits for making application for registration and granting
\nregistration for service tax under Chapter V of the Finance Act, 1994 ?
\n(2 marks)<\/p>\n
\nregistration certificate ?
\n(ii) On which amount \u2014 amount of bill raised on the client or amount actually
\nreceived from the client, service tax is payable ?
\n(iii) If an assessee pays service tax on the billed amount but he gets less amount
\nfrom his customers, can he get refund from the government ?
\n(iv) If the service provider fails to recover service tax on a bill of Rs.12,000 where
\nservice tax is not shown separately in the invoice, what will be the amount
\nof service tax ?
\n(v) When will the small service provider claiming exemption from paying service
\ntax apply for registration under service tax ?
\n(1 mark each)
\n(d) Comment on the following statements \u2014
\n(i) \u201cService tax is payable as soon as advance is received even if the service is
\nprovided later.\u201d
\n(2 marks)
\n(ii) \u201cExcess service tax collected is to be paid to the Central Government.\u201d
\n(3 marks)
\n(e) Discuss the exemption available to small service providers from paying service
\ntax.
\n(5 marks)<\/p>\n
\n(i) \u201cAs a result of introduction of value added tax (VAT), the central sales tax will be
\nphased out.\u201d Explain the statement.
\n(ii) Discuss in what respects VAT system as adopted in India is deficient in the
\ndirection of getting maximum benefits of VAT.
\n(iii) \u201cVAT liability of a dealer is calculated by deducting input tax credit from tax
\ncollected on sales during the payment period.\u201d Discuss with the help of a suitable
\nillustration.
\n(iv) Discuss the cases of purchases in respect of which generally no input tax credit
\nis available.
\n(v) Explain the various methods of computation of VAT liability.
\n(5 marks each)<\/p>\n","protected":false},"excerpt":{"rendered":"