| 1. | (a) | Raman has furnished the following particulars from the previous year 2002-03. Calculate his total income if he is a non-resident— | Rs. | | — | Salary for 3 months received in India (computed) | 9,000 | | — | Dividend received in Germany from British companies
out of which Rs.3,000 were remitted to India |
22,000 | | — | Income from business in Pakistan being
controlled from India |
10,000 | | — | Interest on saving bank deposits in State Bank of India | 1,000 | | — | Amount brought to India out of past untaxed
profit earned in Japan | 20,000 | | — | Income from house property in India (computed) | 3,400 |
| 3 | (0) |
| | (b) | Vinod is the owner of the three houses, which are all let out and covered by the Rent Control Act. From the following particulars, find out the gross annual value in each case | Particulars | House – I
(Rs.) | House – II
(Rs.) | House – III
(Rs.) | | Municipal value | 30,000 | 26,000 | 35,000 | | Annual rent | 42,000 | 36,000 | 30,000 | | Fair rent | 36,000 | 28,000 | 30,000 | | Standard rent | 30,000 | 35,000 | 36,000 | | Unrealised rent | 7,000 | 9,000 | 2,500 | | Period of vacancy | 1 month | 2 months | 3 months |
| 3 | (0) |
| | (c) | Explain the scheme of partial integration of agricultural income with the total income for computing tax liability. | 3 | (0) |
| | (d) | Discuss the provisions relating to rectification of mistakes apparent from record. | 3 | (0) |
| | (e) | Describe the procedure for computation of capital gains on transfer of shares of an Indian company by non–residents. | 3 | (0) |
| 2. | (a) | Vivek is a leading lawyer of Mumbai. He deposits in the bank all the receipts and always pays all the expenses by cheque. The analysis of his bank account for the year ending 31st March, 2003 is as under : | | Rs. | | Rs. | | Balance b/f | 7,500 | Salaries | 14,000 | | Professional fees | 1,40,000 | Rent of chamber | 4,500 | | Dividend | 8,000 | Telephone expenses | 1,000 | | House rent | 22,500 | Magazine subscription | 3,000 | | Income from horse race | | Motor car expenses | 8,000 | | (gross Rs.15,000) | 10,000 | Purchase of motor car | 25,000 | | Share of income from HUF | 7,110 | Misc. office expenses | 5,500 | | Advance payment of
income-tax |
40,000 | | Donation to Mumbai
University |
10,000 | | Personal expenses | 45,500 | | House property expenses: | | | Taxes
Repairs
Insurance
Collection charges | 5,000
1,500
1,500
2,000 |
|
10,000 | | Balance c/f | 28,610 | | 1,95,110 | | 1,95,110 |
Compute his total taxable income after taking into account the following information : | (i) | One-fourth of the motor car expenses relate to personal use. | | (ii) | Rate of depreciation on motor car is 20%. | | (iii) | Vivek stays in his house, the gross annual value of which is Rs.9,800. |
Following are the expenses which have been included in the above account in respect of this house:
— Insurance premium, Rs.500
— Municipal taxes Rs.2,400 | 10 | (0) |
| | (b) | What do you understand by ‘advance payment of tax’ ? When does the liability to pay advance tax arise ? When such a tax is to be paid and how it is calculated and paid ? | 5 | (0) |
| 3. | (a) | Rajesh, a director at Young Pvt Ltd., Mumbai, carrying on transport business has submitted the following particulars of his income for the assessment year 2003–04. Compute his taxable income and tax payable : | (i) | Director’s remuneration and perquisites : | — | Remuneration @ Rs.11,000 p.m. – Rs.1,32,000. | | — | Free use of car of engine capacity of 1,500 cc provided by the company. | | — | The company has provided rent–free accommodation (unfurnished) to Rajesh at Mumbai. It is ascertained that for this purpose the company has obtained a flat on lease from Prem Ltd. for which the company pays a rent of Rs.40,000 p.a. which is also the fair rental value. | | — | Medical expenses met by the company on ordinary treatment of Rajesh and members of his family Rs.4,500. |
| | (ii) | Rajesh was occupying a bungalow on rent at New Delhi since November, 1986. He agreed to transfer his tenancy right in the said bungalow in favour of Bala Ltd. for a sum of Rs.2,00,000 payable as follows : | — | Rs. 50,000 in cash | | — | A flat valued at Rs.1,50,000 (at cost) in the new building to be put up by Bala Ltd to be allotted free of cost. The cash payment was made on 5th April, 2002 and the flat was allotted to him on 5th October, 2002 which was kept for his own residence from that date. |
|
| 10 | (0) |
| | (b) | Explain the income–tax provisions regarding ‘set–off‘ and ‘carry forward’ of losses. | 5 | (0) |
| 4. | (a) | Profit and loss account of a partnership firm for the year ended 31st March, 2003 is as follows : | Rs. | | Rs. | | Cost of goods sold | 10,00,000 | Sales | 15,00,000 | | Remuneration to partners | 1,45,000 | Rent of house property | 60,000 | | Interest to partners @ 20% p.a. | 40,000 | Dividend | 1,70,000 | | Municipal taxes of house property | 25,000 | | Other expenses | 2,40,000 | | Net profit | 2,80,000 | | 17,30,000 | | 17,30,000 |
Other information : | (i) | Out of other expenses, Rs.18,400 is not deductible under sections 36, 37(1) and 43B. | | (ii) | On 15th January, 2003, the firm pays an outstanding sales tax liability of Rs.54,700 for the previous year 2001–02. As this amount pertains to the previous year 2001–02, it has not been debited to the aforesaid profit and loss account. |
Calculate remuneration deductible under section 40(b) | 5 | (0) |
| | (b) | Is it compulsory to file a claim of refund ? Discuss. | 5 | (0) |
| | (c) | Discuss the provisions of section 264 of the Income-tax Act, 1961 relating to revision of orders by the Commissioner of Income-tax (CIT) in favour of the assesses. | 5 | (0) |
| 5. | (a) | Bharat has the following assets and liabilities on the valuation date : | Rs. in lakhs | | Residential house | 40 | | A farm house, 15 km. away from local limits of Kolkata | 10 | | Car for personal use | 6 | | Jewellery | 14 | | Aircraft for personal use | 150 | | Urban land (construction is not permitted under the law) | 10 | | Cash in hand | 1.5 | | Shops given on rent | 20 | | Gold deposit bonds | 10 | | Loan taken for purchase of aircraft | 50 |
Compute the net wealth of Bharat and find out wealth–tax payable. | 10 | (0) |
| | (b) | Discuss the provisions of ‘self assessment’ under the Income–tax Act, 1961. | 5 | (0) |
