| 1. | (a) | A firm of company Secretaries consisting of 3 partners earned a net surplus of Rs. 2,08,000 during the accounting year ended 31st March, 2006 after charging interest on capitals amounting to Rs. 36,000 calculated @ 18% per annum on the capitals of partners but before charging remuneration to partners. You are required to calculate the taxable income of the firm and tax thereon after allowing the maximum allowable remuneration to partners under the provisions of the Income–tax Act, 1961. | 3each | (0) |
| | (b) | Compute the value of perquisites in respect of rent-free furnished house, if Ashok stays in a city with a population of (i) more than 4 lakh; (ii) less than 4 lakh. Ashok is in receipt of the following amounts from his employer during the previous year ended 31st March, 2006 – Basic pay : Rs. 1,80,000; Dearness allowance : 25% of basic pay; Commission : 5% of basic pay; and Bonus : Rs. 5,000 and professional tax of Rs. 1,500 on his behalf. Besides, his employer provided refrigerator and television costing Rs. 24,000 and paid Rs. 500 per month towards rent of other furniture provided. | | (0) |
| | (c) | Explain briefly the provisions relation to time limit for completion of assessment or re–assessment under section 153 of the Income–tax Act, 1961. | | (0) |
| | (d) | Discuss in brief the special provisions for computing profits and gains of retail business under section 44AF of the Income–tax Act, 1961. | | (0) |
| | (e) | Bimal is one of the founder members of a charitable trust. The trust gives a loan of Rs.10 lakh to Mrs. Bimal @ 6% per annum. State whether exemption is available to the trust under section 11 of the Income–tax Act, 1961. | | (0) |
| 2. | (a) | A perusal of Rammohan’s bank account revealed the following deposits during the financial year 2005-06 : | (i) | Gift from his friend on 8th December, 2005 on Gift from his friend on 8th December, 2005 on Gift from his friend on 8th December, 2005 on his birthday : Rs.12,000. | | (ii) | Dividends from shares of various Indian companies : Rs.13,200. | | (iii) | Gift from his fiancee on 5th February, 2006 : Rs.85,000. | | (iv) | Gift from his mother’s friend on 7th July, 2005 on his engagement : Rs.28,000. | | (v) | Gift from his sister in Netherlands on 29th September, 2005 : Rs.2,20,000. | | (vi) | Interest on bank deposits : Rs.30,000. Compute his total income for the assessment year 2006–07 assuming that his income from house property (computed) is Rs.72,000. |
| 5 | (0) |
| | (b) | Explain in brief the meaning of the term 'assets' under section 2(ea) of the Wealth–tax Act, 1957. | 5 | (0) |
| | (c) | What do you understand by ‘willful attempt to evade tax’ ? Mention the consequences of a willful attempt to evade tax, etc., under section 276C of the Income–tax Act, 1961. | 5 | (0) |
| 3. | (a) | The written down value of the block of assets of Rosy Ltd. as on 1st April, 2005 was Rs.5 lakh. An asset of the same block was acquired on 11th May, 2005 for Rs.3 lakh. There was a fire on 18th September, 2005 and the assets were destroyed by fire and the assesses received a sum of Rs.11 lakh from the insurance company. Compute the capital gain assuming – | (i) | All the assets were destroyed by fire; and | | (ii) | Part of the block of assets was destroyed by fire. What will be the answer if assesses received Rs. 6 lakh from insurance company instead of Rs. 11 lakh? |
| 8 | (0) |
| | (b) | Ronnie, a person with disability, submits the following information : | Rs. | | Salary (per annum) | 1,80,000 | | Rent received (per month) | 3,500 | | Dividend from co-operative society | 1,000 | | Interest on bank deposits | 8,000 | | Interest on government securities | 1,000 | | Winnings from lotteries (gross) | 4,000 | | NSC (VIII Issue) purchased during the year | 10,000 | | Deposit under PPF Scheme | 30,000 |
He earned a long–term capital gain of Rs.12,000 on sale of gold during the year. Compute (i) taxable income; and (ii) tax payable by Ronnie for the assessment year 2006–07. | 7 | (0) |
| 4. | (a) | Zahir owns a house property which is situated at Pune. While annual value of the property as per the municipal records is Rs.1,20,000, rent received from the tenant is Rs.1,05,000. Municipal taxes are paid partly by Zahir Rs.3,000, and partly paid by the tenant Rs.5,250. Repair expenses, however, are borne by the tenant Rs.3,900. The tenant has deposited Rs.75,000 with Zahir as refundable security. It does not carry any interest. The difference between ‘unbuilt area’ and ‘specified area’ does not exceed 5%. Determine the value of the property on 31st March, 2006, being the valuation date for the assessment year 2006–07, on the assumption that the house is built on free–hold land. The property was acquired on 10th May, 1988 for Rs.18,75,000. | 5 | (0) |
| | (b) | What do you mean by ‘re–assessment’? State the provisions under the Income–tax Act, 1961 relating to re–assessment. | 5 | (0) |
| | (c) | Who and at what stage can apply for settlement of a case ? Discuss the procedure adopted by the Settlement Commission for disposing off the application received for settlement. | 5 | (0) |
| 5. | (a) | What do you understand by ‘advance payment of tax’ under the Income–tax Act, 1961 ? When does liability to pay advance tax arise ? When such a tax is to be paid and how is it calculated ? | 7 | (0) |
| | (b) | Haryana co-operative Society was constituted on 31st July, 1957. the society derived the following incomes during the previous year ended on 31st March, 2006 | Rs. | | Income from letting of god owns | 50,000 | | Dividends from other co-operative societies | 10,000 | | Agency business | 56,000 | | Processing of agriculture produce of its members | 60,000 | | Interest from members on delayed payment of the price of goods | 10,000 | | Income from house property | 35,000 |
compute the total income of Haryana Co–operative Society for the assessment year 2006–07. Note that the Society is processing the agricultural produce without the aid of power. | 8 | (0) |
