CA PCC Question Papers- Group II<\/p>\n
Taxation \u00a0November 2010<\/p>\n
This\u00a0Paper\u00a0has 21 answerable\u00a0questions\u00a0with 0 answered<\/p>\n
Total No. of\u00a0Questions\u00a0\u2014 7] [Total No. of Printed Pages \u2014 8<\/em><\/p>\n Time Allowed : 3 Hours <\/em><\/em><\/p>\n Maximum\u00a0Marks\u00a0: 100 Interest received on enhanced compensation (It relates to transfer<\/p>\n 1,50,000<\/p>\n 1,10,000 Add: VAT @ 4% 2,50,000 3,01,600<\/p>\n 51,000 34,00,000 To State VAT paid 1,10,000 2,00,000 1,80,000<\/p>\n 12,55,000 (iii) (vi) Administrative charges include Rs. 46,000 paid as commission to brother of the assessee.The commission amount at the\u00a0market rate\u00a0is Rs. 36,000. (i) (for the period after the imposition of service tax) 75,000<\/p>\n 50,000<\/p>\n 14,26,500 year 2010\u201311 under the Income\u2013tax Act, 1961.You answer must be with reference Recognised Provident Fund contribution made by Raghu<\/p>\n 1,50,000 24,000<\/p>\n 20,000 Assume that all the facts given above relate to financial year 2009\u20132010. 12 (0) CA PCC Question Papers- Group II Taxation \u00a0November 2010 This\u00a0Paper\u00a0has 21 answerable\u00a0questions\u00a0with 0 answered Total No. of\u00a0Questions\u00a0\u2014 7] [Total No. of Printed Pages \u2014 8 Time Allowed : 3 Hours Maximum\u00a0Marks\u00a0: 100 Q.No. 1 is compulsory. Attempt any five\u00a0questions\u00a0from the remaining six\u00a0questions. Working notes should form part of the answer. Wherever necessary suitable assumptions may … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[120,4731],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/23191"}],"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\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=23191"}],"version-history":[{"count":1,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/23191\/revisions"}],"predecessor-version":[{"id":115527,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/23191\/revisions\/115527"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=23191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=23191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=23191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nQ.No. 1 is compulsory.
\nAttempt any five\u00a0questions\u00a0from the remaining six\u00a0questions.
\nWorking notes should form part of the answer.
\nWherever necessary suitable assumptions may be made by the candidates.
\nMarks
\n1. (a) Mr.Ram, an Indian citizen, left India on 22.09.2009 for the first time to work as an officer of a company in Germany.
\nDetermine the residential status of Ram for the assessment year 2010\u201311 and explain the conditions to be fulfilled for the same under the Income\u2013tax Act, 1961. 4×5=20 (0)
\n(b) Mrs.Kasturi transferred her immovable property to ABC Co. Ltd. subject to a condition that out of the rental income, a sum of Rs. 36,000 per annum shall be utilized for the benefit of her son\u2019s wife.
\nMrs. Kasturi claims that the amount of Rs.36,000 (utilized by her son\u2019s wife) should not be included in her\u00a0total income\u00a0as she no longer owned the property.
\nState with reasons whether the contention of Mrs. Kasturi is valid in law. (0)
\n(c) Determine the\u00a0total income\u00a0of Mr.Chand from the following information for the Assessment Year 2010\u201311:<\/em><\/em><\/p>\n\n
\n(0)
\n(d) Compute net VAT liability of Rishi from the following information:
\nparticulars Rs Rs
\nRaw materials from foreign market
\n(includes duty paid on imports @ 20%)
\nRaw material purchased from local market
\nCost of raw material
\nAdd:\u00a0Excise duty\u00a0@ 16%<\/p>\n
\nRaw material purchased from neighbouring State
\n(includes CST @ 2%)
\nStorage and transportation cost
\nManufacturing expenses<\/p>\n
\n40,000
\n2,90,000
\n11,600 1,20,000<\/p>\n
\n9,000
\n30,000
\nRishi sold goods to Madan and earned profit @ 12% on the cost of production. VAT rate on sale of such goods is 4% (0)
\n2. (a) Mr. Raju, a manufacturer at Chennai, gives the following Manufacturing, Trading and Profit & Loss Account for the year ended 31.03.2010.
\nManufacturing, Trading and Profit & Loss Account for the year ended 31.03.2010
\nRs Rs
\nTo Opening Stock
\nTo Purchase of Raw Materials
\nTo Manufacturing Wages&Expenses
\nTo Gross Profit 71,000
\n16,99,000
\n5,70,000
\n10,60,000
\n34,00,000 By Sales
\nBy Closing stock 32,00,000
\n2,00,000<\/p>\n
\nTo Administrative charges
\nTo State VAT penalty<\/p>\n
\nTo General Expenses
\nTo Interest to Bank
\n(On machinery term loan)
\nTo Depreciation
\nTo Net Profit 3,26,000
\n5,000<\/p>\n
\n54,000
\n60,000<\/p>\n
\n5,00,000
\n12,55,000 By Gross Profit
\nBy Dividend from
\ndomestic
\ncompanies
\nBy Income from agriculture (net) 10,60,000
\n15,000<\/p>\n
\nFollowing are the further information relating to the financial year 2009\u201310:
\n(i)
\n(ii)<\/p>\n
\n(iv)
\n(v)<\/p>\n
\nThe assessee paid Rs.33,000 in cash to a transport carrier on 29.12.2009.This amount is included in manufacturing expenses (Assume that the provisions relating to TDS are not applicable to this payment.)
\nA sum of Rs. 4,000 per month was paid as salary to a staff throughout the year and this has not been recorded in the books of account.
\nBank term loan interest actually paid upto 31.03.2010 was Rs. 20,000 and the balance was paid in October 2010.
\nHousing loan principal repaid during the year was Rs. 50,000 and it relates to residential property occupied by him. Interest on housing loan was Rs. 23,000. Housing loan was taken from Canara Bank. These amounts were not dealt with in the profit and loss account given above.
\nDepreciation allowable under the Act is to be computed on the basis of following information:
\nPlant & Machinery (Depreciation rate @ 15%)
\nOpening WDV (as on 01.04.2009)
\nAdditions during the year (used for more than 180 days)
\nTotal additions during the year
\nRs.
\n12,00,000
\n2,00,000
\n4,00,000
\nNote: Ignore additional depreciation under section 32(1)(iia)
\nCompute the\u00a0total income\u00a0of Mr. Raju for the assessment year 2010\u201311.
\nNote: Ignore application of section 14A for disallowance of expenditures in respect of any exempt income.
\n12 (0)
\n(b) Prasad & Co. seeks your advise for the following in the context of service tax:
\n(i)
\n(ii) It wants to file revised\u00a0service tax return\u00a0even though the original return was filed belatedly.
\nIt will pay service tax only on actual receipt of money from the customers, though it maintains its books of account on mercantile basis.
\nYour answer must be with reasons. 4 (0)
\n3. (a) Two brothers Arun and Bimal are co\u2013owners of a house property with equal share. The property was constructed during the financial year 1997\u201398. The property consists ofeight identical units and is situated at Cochin.
\nDuring the financial year 2009\u201310, each co\u2013owner occupied one unit for residence and the balance of six units were let out at\u00a0a rent\u00a0of Rs. 12,000 per month per unit.The municipalvalue of the house\u00a0property is Rs. 9,00,000 and the municipal taxes are 20% of municipal value, which were paid during the year.The other expenses were as follows:<\/p>\n
\n(ii)
\n(iii)
\nRepairs
\nInsurance premium (paid)
\nInterest payable on loan taken for\u00a0construction of house Rs.
\n40,000
\n15,000
\n3,00,000
\nOne of the let out units remained vacant for four months during the year.
\nArun could not occupy his unit for six months as he was transferred to Chennai. He does not own any other house.
\nThe other income of Mr. Arun and Mr. Bimal are Rs. 2,90,000 and Rs.1,80,000, respectively, for the financial year 2009\u201310.
\nCompute the income under the head \u2018Income from House Property\u2019 and the\u00a0total income\u00a0of two brothers for the assessment year 2010\u201311. 12 (0)
\n(b) ABC & Co. received the following amounts during the half year ended 31\u20133\u20132010:<\/p>\n\n
\nAmounts realized and on which service tax is payable (excluding the items (i) to (ii) above) Rs.
\n3,50,000<\/p>\n
\nCalculate the service tax liability duly considering the threshold limit. 4 (0)
\n4. (a) Mukesh (aged 55 years) owned a residential house at Nagpur. It was acquired by Mukesh on 10.10.1984 for Rs. 4,00,000.It was sold for Rs.55,00,000 on 4.11.2009.The State stamp valuation authority fixed the value of the property at Rs.60,00,000.The assessee paid 2% of the sale consideration as brokerage for the sale of said property.
\nMukesh acquired a residential house at Chennai on 10.12.2009 for Rs.15,00,000 and deposited Rs.10,00,000 on 10.4.2010 in the capital gain bond of Rural Electrification Corporation Ltd. (RECL). He deposited Rs. 5,00,000 on 6.07.2010 in the Capital Gain Deposit Scheme in a nationalized bank for construction of additional floor on the residential house property acquired at Chennai.
\nCompute the capital gain chargeable to tax in the hands of Mr. Mukesh for the assessment year 2010\u201311. Calculate the income\u2013tax payable on the assumption that he has no other income chargeable to tax.
\nCost inflation index : Financial year 1984\u201385 = 125
\nFinancial year 2009\u201310 = 632
\n7 (0)
\n(b) M\/s Arora Ltd.,submits the following details of expenditure pertaining to the financial year 2009\u201310:<\/p>\n\n
\nto section 40(a) read with relevant tax deduction at source provisions
\n5 (0)
\n(c) X & Co. is a service provider.It received Rs. 19,80,000 during the financial year 2009\u201310 after deduction of tax at source under section 194 J of the Income\u2013tax Act, 1961.
\nThe rate of tax deduction is 10% (i.e. after deduction of Rs. 2,20,000)
\n(i)
\n(ii) Calculate the service tax liability of X & Co.
\nCan a multiple service provider use a single challan for payment of service tax for various services rendered by it?
\n4 (0)
\n5. (a) Mr. Raghu, Marketing Manager of KL Ltd., based at Mumbai furnishes you the following information for the year ended 31.03.2010:
\nBasic salary \u2013
\nDearness allowance \u2013
\nBonus \u2013
\nContribution of employer to Recognised Provident Fund \u2013 Rs. 1,00,000 per month
\nRs. 50,000 per month
\n2 Months basic salary
\n15% of basic salary plus dearness allowance
\nRent free unfurnished accommodation was provided by the company at Mumbai(accommodation owned by the company).<\/p>\n\n
\n20,000
\n28,000
\n6,000<\/p>\n
\nCompute the total income of Mr. Raghu for the assessment year 2010\u201311. 8 (0)
\n(b) State the conditions for deductibility of bad debt written off under the Income\u2013tax Act, 1961. 4 (0)
\n(c) State how the service tax paid would be adjusted when the service is not provided either wholly or partially? 4 (0)
\n6. (a) State with reasons the taxability\/deductibility of the following items in the context of Income\u2013tax Act, 1961:<\/p>\n\n
\n(b) Raj and Co., a manufacturer of product \u2018X\u2019, sold its goods to a distributor at Rs. 11,250 (inclusive of tax). The distributor sold the goods to wholesaler for Rs. 13,500. The wholesaler sold the goods to a retailer for Rs. 16,875. The retailer sold the goods to
\nconsumer at Rs. 22,500. All the sales were inclusive of VAT @ 12.5%.
\nCompute the total VAT payable under the subtraction method. 4 (0)
\n7. Answer any four out of the following: 4×4=16
\n(a) Explain the tax treatment of Limited Liability Partnership under the Income\u2013tax Act, 1961. (0)
\n(b) Sachin received Rs.15,00,000 on 23.01.2010 on transfer of his residential building in a transaction of reverse mortgage under a scheme notified by the Central Government. The building was acquired in March 1991 for Rs.8,00,000.
\nIs the amount received on reverse mortgage chargeable to tax in the hands of Sachin under the head \u2018Capital gains\u2019?
\nCost inflation index for the Financial year 1990\u201391\u2013182
\nFinancial year 2009\u201310 \u2013632 (0)
\n(c) AB Co. Ltd. allotted 1000 sweat equity shares to Sri Chand in June 2009.The shares were allotted at Rs.200 per share as against the fair market value of Rs.300 per share on the date of exercise of option by the allottee viz. Sri Chand. The fair market value was computed in accordance with the method prescribed under the Act.
\n(i)
\n(ii) What is the perquisite value of sweat equity shares allotted to Sri Chand?
\nIn the case of subsequent sale of those shares by Sri Chand, what would be the cost of acquisition of those sweat equity shares?
\n(0)
\n(d) Discuss briefly on carry forward and set off of losses in the case of change in constitution of firm or on succession under section 78 of the Income\u2013tax Act, 1961. (0)
\n(e) List out the merits of VAT. (0)<\/p>\n","protected":false},"excerpt":{"rendered":"