1. | (a) | Choose the correct answer: | 1x6 | |
| | (i) | The basic exemption limit for Income–tax for assessment year 2009–10 for a woman assessee resident in India and below the age of 65 years during the previous year is (1) | Rs. 1,00,000 | (2) | Rs. 1,25,000 | (3) | Rs. 1,50,000 | (4) | Rs. 1,80,000 | | | (0) |
| | (ii) | Under section 40A(3) of the Income–tax Act, 1961, any payment made otherwise than by an account payee cheque drawn on a bank or account payee bank draft is disallowed if (1) | The payment or aggregate of payment made to a person in a day exceeds Rs.20,000. | (2) | The payment or aggregate of payments made to a person in a day exceeds Rs.25,000. | (3) | Single payment exceeds Rs.10,000. | (4) | Single payment exceeds Rs.20,000 and multiple payments in a day exceeds Rs.50,000. | | | (0) |
| | (iii) | The due date of filling Income – tax returns in respect of a company and a person (other than a company) whose accounts are required to be audited under the Income – tax Act or under any other law is (1) | 31st October of the assessment year | (2) | 30th September of the assessment year | (3) | 30th September of the previous year | (4) | 31st October of the previous year | | | (0) |
| | (iv) | Surcharge of 10% payable a partnership firm where the total income exceeds (1) | Rs.7,50,000 | (2) | Rs.10,00,000 | (3) | Rs.1,00,00,000 | (4) | None of the above | | | (0) |
| | (v) | Mr. A aged about 55, has paid through net banking, mediclaim insurance premium of Rs.16,000 for himself and Rs.18,000 for his non‐dependant mother aged 66. The deduction available under section 80D of the Income–tax Act. 1961 is (1) | Rs.15,000 | (2) | Rs.34,000 | (3) | Rs.30,000 | (4) | None of the above | | | (0) |
| | (vi) | Exemption under section 5(v) of the Wealth Tax Act, 1957 is available in respect of urban land belonging to an individual of an areas of ______sq. metres or less. (1) | 500 | (2) | 600 | (3) | 400 | (4) | None of the above | | | (0) |
| (b) | State with reasons whether true or false (Answer without reasons will not deserve any credit): | 4x2 | |
| | (i) | Capital gains of Rs.75 lakhs from transfer of long term capital asset on 14.05.2008 will be exempt from tax if such capital gains is invested within six months from the date of transfer, in specified bonds issued by the National Highway Authority of India under section 54EC of the Income–tax Act. | | (0) |
| | (ii) | It is condition precedent to write off in the books of account, amount due from a debtor to claim deduction for bad debt. | | (0) |
| | (iii) | Where a house property is mortgaged to a bank in an approved transaction of reverse mortgage, the same is deemed to be "transfer" for capital gains purposes. | | (0) |
| | (iv) | Where the minor lives with his grandfather, the assets held by a minor acquired from income clubbed under section 64(1A) of the Income–tax Act, 1961 shall not be included in the hands any parent for wealth tax purposes. | | (0) |
2. | (a) | Vasudha Tyers Ltd., carrying business in manufacture, sale and export of tyres, tubes and accessories, has disclosed a net profit of Rs.12,00,000 in its profit and loss account for the year ending march 31, 2009. On the basis of the following particulars furnished by the company and ascertained on inquiry, compute, giving reasons for each item, its total income from the assessment year 2009–10. The company follows the mercantile system of accounting. (1) | A sum of Rs.50,000 is debited to compensation account. The company had placed an order for machinery to manufacture tyres with a UK company. However, due to a sudden increase in the price of machinery by the UK company, the assessee cancelled the contract. It was required to pay Rs.50,000 as compensation. The company claims the said amount as deduction on revenue account or, in the alternate, as loss under the head "Capital gains" as the payment was made towards extinguishment of right to acquire a capital asset. | (2) | "Loss on export of type account" shows a debit of Rs.21 lakhs. In this connection it is explained that two trucks belonging to the company carrying tyres and tubes valued at Rs.2 lakhs were intercepted at the international border and seized by customs authorities for illegal export of tyres and tubes. The goods were confiscated by the customs authorities and fine of Rs.1 lakh was levied. The company claims the valume of confiscated goods as a trading loss under section 28 and the payment of the fine of Rs.1 lakh which is debited to rates and taxes account as an expenditure in the course of business under section 37(1). | (3) | The company had set up a separate unit for manufacture of plastic tubes at Bangalore in 1995. The said unit suffered heavy losses. As a result the same was closed down and the plant and machinery were sold away. The company, however, claims unabsorbed depreciation amounting to Rs.5 lakh in its return of income. It is not debited to the profit and loss account. | (4) | During the previous year 1991–92, the assessee–company acquired 5,000 shares of E Ltd. an Indian company, as a result, the enire share capital of the said company is now held by the assessee – company. In May, 2008, the assessee – company sold to E Ltd. plant and machinery for Rs.6,00,000. The actual cost is ascertained at Rs.4,00,000 and written down value at Rs.1,50,000. | (5) | In the years 1997–98 and 1998–99, the Government of India arranged exports of tyres and tubes through the Federation of Tyre Dealers, of which the company was a member. The exports which were made to Far Eastern countries resulted in loss which was shared by al members including the company. The Federation thereafter took up the questions of reimbursement of losses with the Government, which after protracted discussion and correspondence agreed to grant a subsidy calculated at a certain percentage of exports. The assessee–company received its shares of subsidy amounting to Rs.3 lakh in the previous year. The amount stands credited to the "Capital reserve account" and claimed as exempt. | (6) | Under voluntary retirement scheme framed by the company, four of its employees take voluntary retirement during the previous year 2008–09. A compensation of Rs.28 lakh is paid to them. The entire amount is debited to the P & L account. The scheme is not in accordance with the guidelines framed under section 10(10C). | | 14 | (0) |
| (b) | Gopal received Rs.5,00,000 being the maturity proceeds of LIC policy that he had taken out in the name of his wife. Can it be said that as he received the maturity amount himself, being alive, the entire amount is taxable as income from other sources in the year of receipt? | 2 | (0) |
| (c) | Somesh has hired certain premises temporarily for use as his office. The premises are not taken on rent as a tenant and Somesh is paying monthly compensation for the temporary use. Somesh incurred Rs.50,000/– on current repairs to the premises. Rajesh, his accountant, advices him that he can claim the whole of the repair expenses in computing his business income. Advise Somesh. | 2 | (0) |
3. | (a) | Mr. R has the following assets and liabilities on the valuation data 31.03.2009: | Rs. in Lakhs | (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) | Residential House A farm house 22 kms away from the local limits of Kolkata A car for personal use Jewellery Aircraft for personal use Urban land (under acquisition proceeding of State Government) Cash in hand Loan taken to purchase the aircraft | 60.5 30.0 16.0 24.0 180.0 40.0 11.0 80.00 |
Compute the Net wealth of Mr. R for the assessment year 2009–2010. | 12 | (0) |
| (b) | Mr. A transfers plant and machinery used in his business for several years for a consideration for Rs. 20,00,000 to Mr. B. The written down value in the books of Mr. A for the said asset is Rs.5,00,000. The market value of the asset as on the date of transfer was Rs.4,00,000. Determine the actual cost of the asset in the case of Mr. B for computing depreciation under section 32. Can the Assessing Officer take the same as Rs.4,00,000? | 6 | (0) |
4. | (a) | Mrs. X is a qualified Cost Accountant. She is a salaried employee in a firm of Cost Accountants in which Mr. X (her husband) is a partner. Mr X’s share in the firm is 20%. Mrs. X draws a salary of Rs.8,000 per month from the firm. Mr. X’s income by way of sitting fees from the various board meetings of the companies in which he is an independent director is Rs.1,50,000. Will Mrs. X’s income be clubbed with that of Mr. X under section 64(1) of the Income–tax Act, 1961? | 4 | (0) |
| (b) | Discuss the following issues, relating to Income from House property: (i) (ii) | Income earned by residents from house properties situated in foreign countries. Properties which are used for agricultural purposes. | | 3 | (0) |
| (c) | Mr. A furnishes the following information for the year ending 31.03.2009: (i) | Income from business —Loss from trading in securities in the nature of derivatives —Profit from non–speculative business | Rs. 50,000 1,50,000 | (ii) | Capital gains: —Long–term capital loss on sale of unlisted shares —Short—term capital loss on sale of shares —Short–term capital gain on sale of jewellery | (25,000) (90,000) 75,000 |
From the above information, compute the gross total income of Mr. A, and the loss to be carried forward. | 4 | (0) |
| (d) | Mr. A owns a commercial house property which is situated at Pune. The difference between unbuilt area and specified area is 22% of the aggregate area. The property was acquired on 31.05.1988 for Rs. 12,50,000. The property is built on freehold land. How will the property be valued for wealth–tax purposes? | 3 | (0) |
| (e) | What are the situations in which the Assessing Officer can make reference to Valuation Officer under section 16A of the Wealth–tax Act, 1957? | 4 | (0) |