October 2008

Section I
Q.1 Mrs. Prafulla provides the following profit and Loss Account for the year ended 31/03/2007. Profit and Loss Account for the year ended 31st March, 2007. 18

Expenses	Rs.	Income	Rs.
To Salaries	2,00,000	By Gross Profit b/d	8,08,000
To Printing and Stationery	10,000	By U.T.I. dividend	10,000
To Advertisement expenses	40,000	By Winning from lottery	15,000
To Rent	50,000	By Gift from father	5,000
To Motor car expenses	30,000	--	--
To Personal drawings	50,000	--	--
To Embezzlement by an employee	5,000	--	--
To Staff welfare expenses	25,000	--	--
To Donations	15,000	--	--
To Income Tax	9,000	--	--
To Depreciation	30,000	--	--
To Sales Tax paid	4,000	--	--
To Net Profit	3,70.000	--	--
--	8,38,000	--	8,38,000

Additional Information:

1. Depreciation as per Income Tax Rules is Rs. 35,000.
2. 50% of the rent is paid for her residential house
3. Personal drawings includes her personal life Insurance premium of Rs. 5,000.
4. Printing includes Rs. 2,000 paid for printing birthday cards for her daughter's birthday
5. Donations are made to:

(a) National sports fund Rs. 10,000
(b) Indira Gandhi Memorial Trust Rs. 4,000.
(c) Recognised Charitable Institutions of books worth Rs. 1,000.
Compute total taxable Income of Mrs. Prafulla for assessment year 2007-08.


Q 2. Mr. Sachin Abhyankar is an employee of Godrej Ltd. He furnishes the following Information for the year ended 31st March 2007. 14

(a) Basic Salary (Net of Professional Tax and T.D.S.)	--
01/04/2006 to 30/11/2006	Rs. 24,000 per month
01/12/2006 to 31/03/2007	Rs. 30,000 per month
(b) Tax deducted at source:	--
01/04/2006 to 30/11/2006	Rs. 1,000 per month
01/12/2006 to 31/03/2007	Rs. 2,000 per month
(c) Professional Tax	Rs. 2,500 per annum
(d) Bonus received in October 2006	Rs. 48,000
(e) Conveyance allowance received	Rs. 2,000 per month
(Exempt u/s 10 @ Rs. 800 per month)	--
(f) Dearness allowance @ 65% of Basic salary.	--
(g) Loan from employer for daughter's marriage	Rs. 1,00,000
(h) Interest received on Bank saving account	Rs. 3,000
(i) Interest received on Government securities	Rs.7,000
(j) LIC premium paid by Mr. Abhyankar	Rs.10,000 in cash
(k) He paid medical Insurance premium of	Rs.5,000 in cash

Compute his Net Taxable Income for Assessment year 2007-08.


Q. 3 Mr. Kedar Patwardhan owns two house properties. Following are the details regarding these houses for the year ended 31/03/2007. 14
(A)House Property I: self occupied,

(1) Annual value Rs. 4,00,000.
(2) Municipal Taxes paid Rs. 20,000.
(3) Loan from ICICI Bank of. Rs. 15,00,000 for acquiring the house property in 2004.
(4) Interest paid on the above loan Rs. 1,80,000 for the-year.
(5) Repayment of Principal amount on housing loan during the year Rs. 30,000.

(B) House Property II:Let out
(1) Fair rent Rs. 3,25,000

(2) Actual rent received Rs. 30,000 per month.
(3) Municipal Taxes paid 18,000.
(4) Collection charges paid Rs. 500.

(5) Interest paid on loan for construction of house property Rs. 40,000.
(C) His other income was as follows:

(1) Interest on Public Provident Fund is Rs. 6,000.
(2) Dividend from Reliance Industries Ltd. Rs. 3,000.
(D)Mr. Patwardhan is physically handicapped (upto 30%).
Compute the Net Taxable Income of Mr. Patwardhan for the Assessment year 2007 08.


Q.4 (a) Professor Rajendra Bhatt a UK citizen (not a person of India Origin) is a visiting faculty at JNO University.provides you the details of his visit to India during the last 7 years. 8

Previous Year	No. of Days stay in India
2006 - 07	179
2005 - 06	195
2004 - 05	15
2003 - 04	130
2002 - 03	190
2001 - 02	100
2000 - 01	125

Prior to 01/04/2000 he did not visit India. Find out his Residential status for the Assessment year 2007-08.

(b) Shri R. P. Chitale purchased a House property for Rs. 1, 25,000 on 4th September, 1977. He constructed a First Floor during the Financial Year 1985 86 for Rs. 2,25,000. 6
The fair market value of the property on 01/04/1981 was Rs. 3, 50,000. He sold the property on 15/11/2006 for Rs. 35 lakhs. He paid brokerage Rs. 25,000 for the sale transaction.The cost inflation Index for Financial Year 1981- 82 is 100, for Financial Year 1985 86 is 133 and for Financial Year 2006 07 is 519.Your are required to compute the Income from Capital Gains for the assessment Year 2007-08.


Q.5 (a) Define and Explain the following as per Income Tax-Act 1961 (any two): 6
(i) Person
(ii) Company
(iii) Previous year
(b) Enumerate any Eight items of Investments / Payments eligible for deduction u/s 80C of the Income Tax Act, 1961. 8

Q. 6 Answer any seven of the following questions with reference to Assessment Year 2007-08 14
i. Aayushi received a gift of Rs. 11,000 from her father at the time of her marriage. Aayushi claims
that Rs. 11,000 is not taxable in her hands. Is her claim correct?
ii. Mr. Ramdas retired from a Government Organisation. He received pension @Rs. 5,000 p.m. during the previous year 2006-07. He claims this pension as exempt being received from a Government Organisation. Is his claim correct?
iii. Mr. Pandharinath is working in a private organisation. He gets entertainment allowance of Rs. 7,000 during the previous year 2006-07. Can he claim entertainment allowance deduction u/s 16(ii)?
iv. Mr. Bhuvan paid his Life Insurance premium of Rs. 6,000 in cash. Is he eligible for deduction u/s 80C?
v. Miss. Aalisha receives Rs. 50,000 as rent from a vacant plot of land owned by her. She claims thisincome as 'Income from house property'. Is her claim correct?
vi. Mrs. Sanchita owns two house properties in Mumbai. She occupies both the houses for her own stay. She claims Gross Annual value of both the properties as NIL. Is she correct?
vii. Miss. Neha, the minor daughter of Mr. Nayak is a
child artist. She earns income of Rs. 20,000 during the previous year 2006-07. Should her income be clubbed with the income of Mr. Nayak?
viii. Mr. Nityanand purchased a house property on 1st May 2005 and sold it on 1st June 2007. He treats this property as a long term capital asset. Is his claim correct?
ix. During the previous year 2006-07, Metasys Ltd. has to pay Rs. 2 lakhs as rent for their office premises. Should the company deduct tax at source while making the payment to the land lord?
Section II

Q. 7 Define and Explain the term 'Dealer' as per the provisions of the Central Sales Tax Act, 1956. 10
OR

Q. 7 Explain with reasons whether the following persons are 'Dealers' or not as per the provisions of the Central Sales Act, 1956.

(i) A Teacher providing Free coaching to students
(ii) An Interior Decorator.
(iii) A watch manufacturer.

(iv) A Money Lender.
(v) Mahanagar Gas Ltd., supplying piped Gas to its customers.

Q. 8 Mr. Limaye commenced his business on 1 st August 2007.Find out from which month he will be Liable for Registration and to pay tax as per the provisions of MVAT Act,2002.Give reasons for your answer.The details of sales and purchases are as under: 10

Month	Purchases		Sales
--	Taxable	Tax Free	Taxable	Tax Free
--	Rs.	Rs.	Rs.	Rs.
August 2007	6,000	40,000	8,000	60,000
September 2007	3,000	68,000	4,000	85,000
October 2007	2,000	98,000	3,000	1,20,000
November2007	4,000	1,12,000	10,000	1,50,000
December 2007	3,000	88,000	15,000	35,000
January 2008	2,000	1,26,000	6,000	1,46,000
February 2008	6,000	86,000	4,000	1,00,000
March 2008	6,000	1,10,000	8,000	1,40,000

OR


Q. 8 Shri Deosthalee a Registered Dealer under MVAT Act 2002, furnishes you the following details about purchases and sales for the month of December 2007. Ascertain the Tax payable as per MVAT Act 2002.

Sales	Rs.	Sales Returns	Rs.
Schedule 'A' Goods	1,80,000	Schedule 'B' Goods	5,000
Schedule 'B' Goods	55,000	Schedule 'C' Goods	8,000
Schedule 'C' Goods	1,08,000	Schedule 'E' Goods	6,000
Schedule 'E' Goods	2,66,000	--	--
Purchases	Rs.	Purchase Returns	Rs.
Schedule 'A' Goods	1,20,000	Schedule 'C' Goods	2,000
Schedule 'C' Goods	1,62,000	Schedule'E' Goods	4,000
Schedule 'E' Goods	2,04,000	--	--

Shri. Deosthalee has an Opening Balance (Credit) in VAT Credit Receivable Account of Rs. 4,500.
Rates of Tax for Schedule A, B, C and E goods are NIL, 1%, 4% and 12.5% respectively.

March 2008

Section I

Q.1 From the following Profit and Loss Account of Mr. Shaswat Hegde, a senior citizen, compute his total Taxable Income for the Assessment Year 2007-08. 18

Profit and Loss Account for the year ended 31st March 2007
Expenses	Rs.	Income	Rs.
To Salaries	76,000	By Gross Profit b/d	3,32,000
To Fire Insurance Premium	11,000	By Intrest on Deposits	--
To Staff Welfare expenses	18,000	with State Bank of India	--
To Postage and Telegram	3,000	(Gross Interest Rs. 20,000)	18,000
To Interest on proprietors capital	4,000	By Amount received on	--
To Travelling expenses	37,000	Maturity of LIC policy	50,000
To Miscellaneous expenses	21,000	--	--
To Repairs and Maintenance	7,000	--	--
To Donation	5,000	--	--
To Advertisement expenses	20,000	--	--
To Reserve for doubtful debts	5,000	--	--
To Depreciation	10,000	--	--
To Sales Tax paid	4,000	--	--
To Advance Income Tax	3,000	--	--
To Income Tax paid for P.Y. 2005-06	1,000	--	--
To Net Profit	1,75,000	--	--
--	4,00,000	--	4,00,000

Additional Information:

1. Depreciation as per Income Tax Rules is Hs. 15,000/-
2. Mr. Shaswat paid for self, medical Insurance Premium of Rs. 16,000/- by cheque.
3. Advertisement expenses include Rs. 15,000/- spent on advertising in a magazine published by a political party.
4. Repairs and maintenance include personal expenses of Rs. 2,000/
5. Donation is made to National Illness Assistance fund of Rs. 5,000/


Q 2. Shri Gangadhar Josh] took voluntary retirement on 1st October 2006. He has completed 28 years of service in Tech-India Ltd. He furnishes the following information for the year ended 31st March 2007. 14
1. Basic Salary Rs. 40,000/- per month

2. Dearness allowance @ 60% of Basic salary.
3. Entertainment allowance received Rs. 2,000/- per month.
4. Conveyance allowance received Rs. 1,500/- per month.
5. (Exempt u/s 10 @ Rs. 800/- per month)
6. Voluntary retirement compensation Rs. 8,50,000/
7 (Exempt u/s 10(10C) Rs. 5,00,000).

8. Leave encashment (fully exempt) 3 months basic.
9. Gratuity received (fully exempt) Rs. 2,34,000/-.
10. Professional Tax paid Rs. 2,500/-.
11.Commmuted pension (1/3rd exempt) Rs. 96,000/-.
12.Uncommuted pension Rs. 10,000/- per month.
13.He paid Rs. 15,000/- towards LIC premium.

14.He donated Rs. 20,000/- to Prime Ministers National Relief Fund.
15.He donated clothes worth Rs. 20,000/- to an orphanage.

Compute his Net Taxable Income for the Assessment Year 2007-08.


Q. 3 Mrs. Gayatri Soman owns two houses in Mumbai. The particulars of her Income from properties for the year ended 31st March 2007 is as follows 14

(A)	Particulars	House Property I	House Property II
1.	Nature of occupancy	Self occupied	Let out
2.	Fair rent	Rs. 4,00,000	Rs. 6,00,000
3.	Municipal valuation	Rs. 4,20,000	Rs. 6,10,000
4.	Rent received	NIL	Rs. 6,50,000
5.	Municipal taxes paid on 15/03/2007	Rs. 30,000	Rs. 40,000
6.	Fire Insurance premium paid	Rs. 8.000	Rs. 10,000
7.	Rent collection charges	----	Rs. 8.000
8.	Land Revenue payable	Rs. 2,000	Rs. 3,000
9.	Interest paid on loan taken for construction of house property	Rs. 1,60,000	Rs. 1,50,000
10.	Date on which loan taken	26-11-2005	22-10-2004
11.	Repayment of principal amount of loan	Rs. 30,000	NIL.

(B) Mrs. Gayatri Soman also received the following other income :
1. Dividend from Mafatlal Industries Rs. 10,000
2. Interest on fixed deposits with Bank of India Rs. 20,000/-
(C) Mrs. Gayatri paid Medical Insurance premium of Rs. 18,000 –for self by cheque. Compute her Net Taxable Income for the Assessment Year 2007-08.


Q.4 (a) Shri Ram Gopal Desai, a citizen of USA has been staying in India since 1984. He leaves India on 16th July 2006 on a visit to USA and returns on 4th January 2007. Determine his residential status for the previous year 2006-07. 8
(b) Shri Vinod Gokhale purchased a residential house on 1st August 1978 for Rs. 2,00,000. The fair market value of the house on 1-4-1981 was Rs. 3,00,000. He incurred Rs. 1,00,000 towards cost of improvement during the previous year 1983-84. He sold the House on 31st December 2006 for Rs. 20,00,000. He paid brokerage of Rs. 50,000. The cost Inflation Index for Financial Year 1981-82 is 100 for Financial Year 1983-84 is 116 and for the Financial Year 2006-07 is 519. Compute the Income from capital gains of Shri Vinod Gokhale for the Assessment Year 2007-08. 6


Q.5 (a) Define and explain the following as per Income Tax Act 1961 (any two) 6
(i) Assessee
(ii) Person
(iii) Previous year
(b) Enumerate and explain in brief the deductions available under section 24 of the Income Tax Act 1961, in computing Income from House Property. 8



Q. 6 Answer any seven of the following questions with reference to Assessment Year 2007-08 14
i. Miss Smita received a gift of Rs. 21,000/- from her father at the time of her marraige. She claims that Rs. 21,000/- is not taxable in her hands. Is her claim correct ?
ii. Mr. Satish received Dividend of Rs. 5,000/- from XYZ Ltd., an Indian company. Can he claim this dividend income as exempt u/s 10(34) ?
iii. The minor daughter of Mr. Bharat earns interest of Rs. 5,000/- on fixed deposits which is clubbed with the income of Mr. Bharat. Is this clubbing of income correct ?
iv. Mr. Pradeep earns Rs. 1,50,000/- during the previous year 2006-07 as interest on Public Provident Fund (PPF) account maintained with State Bank of India. Whether Tax needs to be deducted at source by State Bank of India ?
v. Mrs. Shobha purchased a house property on 1st June 2004 and sold it on 1st April 2007. She treats this property as long term capital asset. Is her claim correct ?
vi. Mr. Avinash who earns taxable salary from ABC Ltd., requests the employer not to deduct tax from his salary and offers to pay tax on his own. Is it correct for the employer not to deduct tax ?
vii. Mr.Ambrish paid Life Insurance Premium of Rs.10,000/- on behalf of his wife who is dependent on him.He claims deduction u/s 80 C.Is he right in claiming the deduction ?
viii. Mrs. Kamla made a fixed deposit of Rs. 3,00,000/- in her husbands name on which earned interest of Rs. 25,000,/-. He offers the same as his income in his income Tax returns. Whether it is correct ?
ix. Mr. Joshi has invested Rs. 1,50,000/- in N.S.C. VIII issue during the previous year 2006-07. How much deduction can he claim u/s 80C ?


Section II

Q. 7 Define and explain the term 'Businessas per the provisions of the Central Sales Tax Act,1956. 10


OR


Q. 7 Explain with reasons whether the following are 'Business Activities' or not as per the provisions of the Central Sales Tax Act, 1956.
(i) Purchase of an office premise by a Business Organisation
(ii) Sale of Machines by a Machinery Manufacturer at a loss.
(iii) Jewellery and precious stones purchased as gifts to their clients, by a Business Organisation.
(iv) Running of a Cyber Cafe.

(v) Planting of saplings for beautification around the office.


Q. 8 Mr. Gadgil Commenced his Business as a Manufacturer on 1st February 2007. From the following particulars regarding purchases and Sales transactions, Find out from which month he will be liable for Registration and to pay Tax as per the provisions of MVAT Act 2002. Give Reasons. 10

Month	Details	of	Purchases	Details	of Sales
--	Out of State	With in	State	--	--
--	Taxable	Taxable	Tax Free	Taxable	Tax Free
--	Rs.	Rs.	Rs.	Rs.	Rs.
February 2007	8,000	28,000 1	6,000	40,000	20,000
March 2007	1,000	20,000	5,000	23,000	16,000
April 2007	5,000	8,000	28,000	18,000	24,000
May 2007	4,000 20,000	18,000	26,000	18,000
June 2007	3,000	15,000	24,000	20,000	16,000
July 2007	6,000	12,000	26,000	24,000	28,000
August 2007	8,000	16,000	14,000	12,000	16,000

OR


Q. 8 M/s Raje and Co., a Registered dealer under MVAT Act 2002, requests you to compute liability under MVAT Act 2002. for the month of March 2008 from the following information.

Sales	Rs.	Sales Returns	Rs.
Schedule 'A' Goods	1,00,000	Schedule 'A' Goods	20,000
Schedule 'B' Goods	50,000	Schedule 'E' Goods	20,000
Schedule 'E' Goods	2,20,000	--	--
Sale out of Maharashtra	1,50,000	--	--
Labour charges Received	75,000	--	--
--	5,95,000	--	40,000
Purchases	Rs.	Purchase Returns	Rs.
Schedule 'A' Goods	50,000	Schedule 'E' Goods	30,000
Schedule 'E' Goods	3,50,000	--	--
--	4,00,000	--	30,000

(i) There was an Opening Balance (Credit) in VAT credit Receivable Account of Rs. 12,000/
(ii) Rates of VAT for schedule A, B, and E Goods are NIL, 1% and 12.5% respectively.

Q. 9 Mr. Sushil Godbole has earned the following Income during the previous year ended 31st March 2007. 10

Particulars Amount	(Rs.)
(1) Interest from an Indian company received in London	1,000
(2) Pension from Former Employer in India received in USA	4,000
(3) Profit earned from a Business in Paris which is controlled in India	--
(half of the profits being received in India)	20,000
(4) Income from Agriculture in Bhutan and remitted to India	5,000
(5) Income from property in England received there	4,000
(6) Past untaxed Foreign Income brought to India	10,000
(7) Dividend from a Foreign Company Received in Thailand	5,000
(8) Professional fees received in India	7,000

Compute his total Income for the Assessment Year 2007-08 assuming

(i) He is resident and Ordinarily resident
(ii) He is Non-Resident.

Q. 10 Define and Explain the term 'Sale' under the provisions of Maharashtra Value Added Tax Act 2002. 10


OR

Explain with reasons whether the following transactions can be considered as 'Sale' under the provisions of the Maharashtra Value Added Tax Act, 2002.
(a) Sale of washing machines on Hire Purchase System
(b) Hypothecation of Goods

(c) Transfer of Goods from Head office to Branch
(d) Gift of Jewellery to a friend
(e) Sale of Scrap.

October 2007

Section I
Q.1 From the following P & L Account of Mr. Sonavane, compute his total taxable income for Assessment year 2006-07 22
Profit and Loss Account for the year ended 31st March, 2006

Payments	Rs.	Receipts	Rs.
To Opening Stock	3,34,000	By Sales	10,40,000
To Purchases	9,00,000	By Closing Stock	3,05,000
To Office Salaries	71,000	By Income Tax Refund (Including Interest Rs. 2,000)	15,000
To Bad Debts written off	25,000	By Dividend from U.T.I	50,000
To Advertisement	10,500	By Lottery Prize Received	1,10,000
To Fire Insurance Premium	4,500	--	--
To Conveyance	6,000	--	--
To Interest on Proprietor's Capital	25,000	--	--
To General Expenses	55,000	--	--
To Wealth Tax	5,000	--	--
To Sales Tax Penalty	4,000	--	--
To Depreciation	30,000	--	--
To Net Profit	50,000	--	--
Total	15,20,000	Total	15,20,000

Additional Information:

1. General Expenses include Advance Income Tax Rs. 10,000 and Rs. 500 for purchase of lottery tickets.
2. Depreciation allowable as per Income Tax Rules Rs. 25,000.
3. Purchases include Rs. 4,00,000 paid for cash purchases exceeding the limit of Rs. 20,000 prescribed under section 40 A(3) of Income Tax Act, 1961.

4. Office salaries include Bonus due but not paid Rs. 16,500.

5. Mr. Sonavane who is physically handicapped person with 60% disability paid premium for LIC
Pension Policy Rs. 15,000.


Q 2. Mr. Dattatreya Rane is employed with Hi-Tech Ltd. He furnishes the following information for the Assessment Year 2006-2007. 16

(1) Net salary	Rs. 28,500 p.m.
(2) Income Tax deducted at source	Rs. 1,300 p.m.
(3) Professional tax deducted	Rs. 200 p.m.
(4) Bonus received during the year	Rs. 30,000
(5) Arrears of Salary received	Rs. 46,000
(6) Perquisite value of Gas, Water and Electricity	Rs. 12,000
(7) He took advance salary of Rs. 50,000 on account of marriage of his daughter.	--
(8) Mr. Dattatreya paid a LIC premium of Rs. 15,000 and Deposited Rs. 30,000 in his PPF A/c.	--
(9) Mr. Dattatreya is also a director of a company and received Rs. 5,000 as directors sitting fees.	--
(10)He received Rs. 4,000 as interest on fixed Deposits with State Bank of India.	--
(11) He donated Rs. 10,000 to Jawaharlal Nehru Memorial Fund during the year.	--

Compute his total income for the Assessment Year 2006-07.


Q. 3 Mr. Shastri owns two Houses, the details regarding these houses for the year ended 31-3-06 are as follows: 16

(a)The First House the fair Rent of which was Rs. 2,25,000 was let out at Rs. 20,000 p.m. He paid Rs. 6,000 as interest on Money Borrowed for construction of this house, Rs. 900 as ground Rent and Rs. 10,000 as Municipal Taxes.
(b)The Second House of the Annual value of Rs. 5,00,000 was occupied by him for his residence. Municipal Taxes paid by him were Rs. 25,000. He has borrowed Rs. 20 lakhs from HDFC Ltd. in April 2001 for acquiring this House property. Interest due for the year was Rs. 2,00,000 and he has repaid Rs. 40,000 out of the loan amount during the year.

The details of his other Income during the year 2005-2006 are as follows:
(i)Directorship fees received from JDC Ltd. Rs. 1,60,000.
(ii)Winning from lottery Rs. 1,00,000.

Mr. Shastri donated Rs. 5,000 as medical aid to a poor person and also donated books worth Rs. 10,000 to an approved Institution.

Compute the Net. Taxable Income of Mr. Shastri for the previous year 2005-06 relevant to Assessment Year 2006-07.


Q.4 (a) Mr. Sandeep has earned the following income during the previous year ended 31st March 2006. 8

(1) Professional fees received in India for 3 months	18,000
(2) Payment received in U.K. for services rendered in India	16,000
(3) Income from business in Australia, controlled from India	14,000
(4) Income from Agriculture in Bangladesh	12,000
(5) Dividend from a foreign company received in U.K.	10,000
(6) Amount brought into India out of the past untaxed profits earned in U.S.A.	18,000

Compute his total income assuming:
(i) He is resident and Ordinarily resident.
(ii) Non resident.
(b) Mr. Ranade purchased a house property for Rs. 2,50,000 on 6th July 1980. He made addition to the house property by constructing a first floor during the financial year 1995-96 spending Rs. 2,00,000. He sold the entire property on 10th June 2005 for Rs. 60,00,000. He paid brokerage @ 1% on the sale value. The fair market value of the property on 1st April 1981 was Rs. 3,50,000. The cost inflation index for financial year 1981-82 is 100, for financial year 1995-96 is 281 and for financial year 2005-06 is 497. (6)
Compute the Capital gain of Mr. Ranade chargeable to tax for Assessment Year 2006-07.

Q.5 (a) Define and explain the following as per Income Tax Act, 1961 (any two): 6
(i) Person.
(ii) Assessee.
(iii) Company.
(b)Enumerate any eight income which are Taxable under the head. "Income from other sources under Income Tax Act 1961.(8)

Q. 6 Answer any seven of the following questions briefly with reference to Assessment Year 2006-07. 8
(1) Rajaram received Rs. 7,50,000 as compensation on voluntary retirement and claims that entire amount is exempt u/s 10 (10c). Is he right?(2) A, B and C are co-owners of a house-property which is self occupied by the co-owners. They claim that the annual value for each co-owner shall be Nil. Are they right?
(3) What is the maximum amount exempt in case of Leave Encashment to non-Government employees?
(4) Sadashiv transferred his house-property to his wife Rekha with an agreement to live apart. In whose hands the income from property will be taxable?
(5) Tushar carrying on an agency business received a sum of Rs. 12,00,000 from his principal for termination of agency. He claims that compensation received shall be exempt as it is a capital receipt. Is he right?
(6) Kumar purchased equity shares worth Rs. 80,000 on 18th November 2004 and sold them for Rs. 1,20,000 on 25th November 2005. He claims the gain as a short term capital gain. Is he right?
(7) Amar has earned Rs. 5,000 from a lottery ticket and claims Rs. 500 as a deduction for purchase of lottery tickets. Can he avail this deduction?
(8) Is Interest credited to public Provident Fund fully exempt from tax?
(9) Mr. Shashank has paid Rs. 1,00,000 towards premium on pension fund policy of LIC of India. What is the amount of deduction he can claim from his Gross total Income?

Section II


Q. 7 Define and Explain the term 'Dealer' as per provisions of the Central Sales Tax Act, 1956. 10

OR

Explain with reasons whether the following persons are 'Dealers' or not as per the provisions of the Central Sales Tax Act, 1956.

(a) a Civil Contractor.
(b) a Cardiologist, supplying cardiogram to his patients
(c) a Film star.
(d) a Teacher of 'Feng Shui!
(e) a Chemist.

Q. 8 Mr. Nene Commenced his Business as a Manufacturer on 1st June 2006. From the following particulars regarding purchases and sales transactions, find out from which month he will be liable for Registration and to pay tax as per the provisions of MVAT ACT 2002. 10 (Give Reasons).

Month	Details	of	Purchases	Details of	Sales
--	Out of state	Within	state	Taxable	Tax Free
--	Taxable	Taxable	Taxfree	Rs.	Rs.
--	Rs.	Rs.	Rs.	--	--
June 2006	2,000	3,000	10,000	12,000	5,000
July 2006	6,000	6,000	12,000	10,000	25,000
Aug.2006	2,000	--	10,000	15,000	10,000
Sept, 2006	10,000	4,000	15,000	18,000	--
Oct. 2006	3,000	3,000	18,000	20,000	12,000
Nov.2006	4,000	15,000	12,000	15,000	30,000
Dec.2006	5,000	3,000	20,000	10,000	15,000

OR

M/s. Phutane & Co. Furnishes the following data, you are required to compute the amount payable as Tax under, MVAT Act 2002.

Month	--	Sales	--	Purchases
--	Schedule A	Schedule C	Schedule E	Schedule E
--	Rs.	Rs.	Rs.	Rs.
Oct. 2006	1,00,000	4,00,000	3,20,000	4,00,000
Nov.2006	2,00,000	4,25,000	4,10,000	4,50,000
Dec. 2006	2,50,000	6,00,000	2,20,000	5,50,000

There was an opening Balance of Rs. 2,500 in the Vat credit Receivable Account on 1-10-06.

March 2007

Section I

Q.1 From the following Income and Expenditure Account of Dr. Kamble compute his total taxable income for Assessment year 2006-07. 18

Income and Expenditures Account for the year ended 31-3-2006
Expenditure	Rs.	Income	Rs.
To Staff Salaries	1,20,000	By Consulting Fees	4,00,000
To Dispensary Expenses	67,500	By Visit Fees	1,00,000
To Dispensary Rent	60,000	By Gifts from Patients	40,000
To Purchase of Medicines	45,000	By Sale of Medicines at the Dispensary	80,000
To Income Tax	35,000	By Rent from House Property	1,20,000
To Professional Fees to Doctors	22,000	--	--
To Car Expenses (for Profession)	36,400	--	--
To Membership Fees	2,000	--	--
To Municipal Tax for Rented House	12,000	--	--
To Interest on Housing Loan for Rented House	18,000	--	--
To Printing Charges	4,000	--	--
To Depreciation	48,000	--	--
To Charity	1,500	--	--
To Surplus for the Year	2,68,600	--	--
Total	7,40,000	Total	7,40,000

Additional Information:

1. Gifts from patients include Rs. 1,000 rom his father in personal capacity.
2. Depreciation as per Income Tax Rules Rs. 45,000.
3. He paid medical insurance premiums of Rs. 8,000 by cheque.
4. He purchased National Savings Certificates of Rs. 30,000 and paid Life Insurance Premium of Rs. 60,000.
5. He paid Rs. 20,000 to Nationalised Bank towards Principle of Housing Loan.


Q 2. Mr. Chintan Chitale a severely physically disabled person (85%) is employed with Pidilite Industries. He furnishes you the following information for the year ended 31st March, 2006. 14

(a) Basic Salary Rs. 30,000 p.m.
(b) Dearness Allowance @ 20% of Basic Salary.
(c) Profession Tax deducted at Rs. 200 p.m.
(d) Bonus Rs. 30,000.
(e) House Rent Allowance (fully taxable) Rs. 800 P.M.
(f) Perquisite value of Gas, Water and Electricity Rs. 2,500.
(g) Arrears of Salary received as per revised pay scale. Net arrears Rs. 50,000, Tax deducted at sourceon arrears of salary Rs. 15,000.
(h) He owned a residential house which was used for his own residence. Fair rent Rs. 50,000 and Municipal valuation of the house was Rs. 60,000.
He spent the following amounts during the year:
(i) Municipal taxes paid Rs. 6,000.
(ii) Insurance of Property Rs. 2,000.

(iii) Interest on Housing Loan from ICICI Bank Rs. 40,000 (Loantaken in August 2004).
(iv) He paid Rs. 4,000 by cheque to GIC for Medical Insurance for his health.
Compute the total income of Mr. Chintan Chitale for the Assessment Year 2006-07.

Q. 3 Ms. Netra who is totally blind, has let out her house property situated at Navi Mumbai for Residential purpose. The details of the said property for the year ended 31st March 2006 are as follows: 14
(a) Rent Received Rs. 1,20,000.
(b) Municipal Valuation Rs. 1,00,000.
(c) Fair Rent Rs. 1,50,000.
(d) Municipal Taxes paid by Tenant Rs. 10,000.
(e) Interest on Loan taken from ICICI Bank for construction of house property Rs. 35,000. Loan was taken in April 1997.

Following are the details of other income earned by her during the year.
(i) Interest accrued on NSC, Rs. 20,000.
(ii) Interest accrued on Public Provident Fund account Rs. 5,000.
(iii) Dividend from M/s. Raymond Ltd. Rs. 10,000.
(iv) Interest Accrued on private loans to friend and relatives Rs. 60,000.
Compute the Net Taxable Income of Ms. Netra for Financial Year 2005-06, relevant to Assessment Year 2006-07.


Q.4 (a) Mr. Abhijeet, an Indian Citizen, furnishes the following particulars of income earned during the previous year relevant to assessment year 2006-07. 6

(a) Professional Fees received in India	Rs. 22,000
(b) Income earned in India but received in Paris	Rs. 24,000
(c) Dividend on shares of Indian Companies	Rs. 10,000
(d) Salary earned and received in France	Rs. 28,000
(e) Income from Agriculture in Nepal	Rs. 30,000
(f) Income from Business in UK controlled from India	Rs.32,000

Compute his Income for Assessment Year 2006-07 assuming the residential status as:
(a) Resident and Ordinarily Resident in India.
(b) Non Resident in India.
(b) Mr. Kanade purchased a House property for Rs. 1,25,000 on 16th August, 1971. He made the following addition to the House Property. Cost of Construction of 1st Floor in Financial Year 1985-86 Rs. 2,25,000.(6)
The Fair Market value of the property on 1-4-81 was Rs. 3,50,000. He sold the property on 15th September, 2005 for Rs. 35 lakhs. He paid the Brokerage of Rs. 25,000 for the sale transactions. The cost inflation index for Financial Year 1981-82 is 100, for Financial Year 1985-86 is 133 and for Financial Year 2005-06 is 497.
Compute the Capital Gain of Mr. Kanade chargeable to tax for Assessment Year 2006-07.



Q.5 (a) Define and Explain the following as per Income Tax Act, 1961 (any two): 6
(i) Assessee.
(ii) Person.
(iii) Previous Year.
(b) Enumerate and Explain any Four deductions allowable from the Income under the Head Profits and Gains of Business under the Income Tax Act, 1961. (8)



Q. 6 Answer any seven of the following questions briefly with reference to Assessment Year 2006-07: 14
(a) Mr. Ajinkya donated articles worth Rs. 20,000 to flood affected areas. Can he claim this as a deduction u/s 80G?
(b) Vinayak received Rs. 15,000 as a birthday gift from his father. Vinayak claims Rs. 15,000 is not taxable in his hands. Is he right?
(c) Manoj working as a manager of an agricultural estate received Rs. 1,20,000 as salary and claims it as his agricultural income. Is he right?

(d) Mr. Purohit, lecturer in Adarsh College Mumbai, received Rs. 8,000 as examinership fees from University of Mumbai. He claims it as income from other sources. Is he right?
(e) Ajay has two house properties. Both are self occupied. He claims that annual value of both houses shall be NIL. Is he right?
(f) Varun paid interest on loan of Rs. 1,30,000 before commencement of production in his business. He claims this as a revenue expenditure. Is he right?
(g) Mrs. Savitribai received a family pension of Rs. 60,000 during 2005-06. She claims a standard deduction to the extent of 1 /3rd of such pension. Is she right?
(h) Shri Kamble pays Rs. 1,25,000 as premium on his Life Insurance Policy. What is the maximum amount of deduction available u/s 80C?
(i) M/s. Sanglikar Pvt. Ltd. paid to M/s. Kokane & Co. Chartered Accountants sum of Rs. 30,000 as retainership fees during the previous year ending 31st March 2006 without deducting any tax at source. Are they right?

Section II

Q. 7 Define and Explain the term 'Sale' as per the provisions of the Central Sales Tax Act, 1956. 10


OR

Explain with reasons, whether the following are 'sale' as per the provisions of the Central Sales Tax Act, 1956.

(a) Pledge of Goods.
(b) Sale of Washing Machines on Hire Purchase System.
(c) Sale of Medicines by a Doctor.

(d) Catering Services in a Marriage Function.
(e) Transfer of Goods from 'Factory' to the Branch.

Q. 8 Mr. Lele commenced his Business on 1st February, 2006. Find out from which month he will be liable for Registration and to pay Tax as per the provisions of MVAT Act, 2002. Give reasons for your answer. The details of his sales and purchases are as under: 10

--	Purchases	--	Sales	--
Month	TaxableRs.	Tax FreeRs.	TaxableRs.	Tax Free Rs.
February 2006	8,000	50.000	4,000	95,000
March 2006	3,000	32,000	5,000	45,000
April 2006	4,000	2,10,000	1,000	3,05,000
May 2006	5,000	1,75,000	6,000	1,90,000
June 2006	2,000	2,00,000	2,000	2,10,000
July 2006	4,000	2,50,000	5,000	2,75,000
August 2006	4,000	1,70,000	4,000	1,90,000
September 2006	6,000	1,80,000	8,000	2,20,000

OR

Calculate the Set Off and Tax Payable under MVAT Act 2002 from the following details of August 2006 of M/s. Ragnekar Associates.

Particular	TotalRs.
Local purchases from Registered Dealers	12,00,000
Purchases from Unregistered Dealers	2,00,000
Sales Price of Goods	20,00,000
Inter State Stock Transfer	4,00,000

The ratio of Stock Transfer to total sales 20%. M/s. Ragnekar Associates had an Opening Balance (Credit) in VAT Credit Receivable Account of Rs. 12,500.

October 2006

Q.1 (a) Mr. Sham provides the following Profit and Loss account for the year ended 31-3- 2005. 22
Profit and Loss Account for the year ended 31st March, 2005

Payments	Rs.	Receipts	Rs.
To Salaries	1,30,000	By Gross Profit	7,67,000
To Rent	30,000	By U.T.I. Dividend	9,000
To Printing and Stationery	25,000	By Income form LIC Mutual Fund	5,000
To Advertisement Expenses	50,000	By Gift from Mother	5,000
To Entertainment Expenses	18,000	By Winning from Cross Word Puzzle	12,000
To Motor Car Expenses	30,000	By Interest on National Saving Certificates	3,000
To Personal Drawings	60,000	--	--
To Embezzlement by an Employee	7,000	--	--
To Staff Welfare Expenses	70,000	--	--
To Donations	30,000	--	--
To Depreciation	35,000	--	--
To Income Tax	16,000	--	--
Net Profit	3,00,000	--	--
Total	8,01,000	Total	8,01,000

Additional Information:

1. Depreciation as per Income Tax Rule is Rs. 38,000.

2. Staff welfare expenses include Rs. 20,000 for his own medical treatment.
3. 50% of the rent is paid for his residential house.
4. Printing includes Rs. 5,000 paid for printing marriage cards for his daughter's marriage.
5. Donations are made to
(a) The National Sports Fund Rs. 10,000.

(b) The Indira Gandhi Memorial Trust Rs. 8,000.
(c) The Prime Minister's National Relief Fund Rs. 12,000.
Compute the net taxable income of Mr. Sham for Assessment year 2005-06.



Q 2. Mr. Kadam a severally handicapped person (85%) took voluntary retirement on 1st Jan., 2005 after completing 25 years of service in a Private Company. He furnishes the following information for the year ended 31st March, 16

Basic Salary	Rs.20,000 p.m.
Dearness Allowance	@ 80% of Basic Salary
Conveyance Allowance Received	Rs.800/- P.M.
(Actual Conveyance Expenses Rs. 800/- p.m.)	--
Voluntary Retirement Compensation	Rs. 7,65,000
Profession Tax Paid	Rs.2,500/-
Gratuity Received (Fully exempt.)	Rs.1,78,600/-
Commuted Pension (1/3 rd exempt.)	Rs. 84,000/-
Uncommuted Pension.	Rs. 3,000 p.m.
Leave Encashment (Exempt. Upto 10 months)	2 Months Basic.
Reimbursement of Medical Expenses	Rs. 12,000

He was presented a gift cheque of Rs. 10,000 by his colleagues by collecting voluntary contribution.

He paid Medical Insurance Premium on 10th March, 2005 of Rs. 15,000/- by cheque.
Compute his net taxable income for year 2005-06.



Q. 3 Mr. Wadekar owns two houses in Mumbai, the particulars of which are as follows for the previous year 2004-05: 16

Particulars	House PropertyI	House PropertyII
Nature of occupancy	Let out	Self-Occupied
Municipal Valuation	Rs. 2,00,000	Rs. 3,00,000
Fair rent	Rs. 1,90,000	Rs. 2,70,000
Rent received	Rs. 3,50,000	Rs. NIL
Municipal taxes paid on 1/3/2005	Rs. 20,000	Rs. 30,000
Fire Insurance Premium paid	Rs. 3,000	Rs. 5,000
Collection charges	Rs. 1,000	Rs. NIL
Land revenue payable	Rs. 1,500	Rs. 2,400
Interest paid on loan taken for construction of house property	Rs. 1,60,000	Rs. 40,000
Repayment of principal amount of Loan	Rs. 50,000	Rs. 10,000
Date on which loan was taken	20/12/1999	25/1/1998

Mr. Wadekar also received the following Income during the previous year 2004-2005.
(a) Royalty on book written by him Rs. 25,000.
(b) Dividend received from co-operative society Rs. 5,000.
(c) Interest received on debentures from Indian Company Rs. 5,000

He contributed Rs. 11,000/- to L.I.C. Pension Fund Policy.

Compute the Net Taxable Income of Mr. Wadekar for the previous year 2004-05 relevant to assessment year 2005-06.

Q.4 (a) Miss Sanjali, an Indian citizen, furnishes the following information of her income earned during the previous year 2004-05. 8
(i) Professional fees received in India Rs. 10,000.

(ii) Income earned in India but received in France Rs. 15,000.

(iii) Dividend on shares of Indian co-operative bank received in India Rs. 7,000.
(iv) Salary earned and received in France Rs. 5,000.
You are required to find out her 'Gross Total Income' for assessment year 2005-06 if she is alternatively.
(i) Resident and Ordinarily Resident.
(ii) Resident But Not Ordinarily Resident and
(iii) Non Resident.
(b) Mr. Parag purchased a residential flat on 02/05/2002 for Rs. 10,00,000. He paid on the same day the stamp duty and registration charges of Rs. 48,750 on purchase of flat. He sold the said flat on 17/03/2005 for Rs. 12,00,000. The cost Inflation Index for F.Y. 2002-03 is 447 and for F.Y. 2004-05 is 480. Compute his Capital.(8)
Gain Chargeable to tax for assessment year 2005-2006.


Q.5 Answer any eight questions with reference to Assessment Year 2005-06: 16


1. What is the percentage of rebate available U/s 88 if the Gross total Income of an assessee exceeds Rs. 5 lakhs?

2. Mr. Sharad Bhide paid a Medical Insurance Premium to GIC of Rs. 6,000/- in cash on 15th February, 2005. Can he claim deduction U/s 80 D?
3. Mr. Manoj Shinde is physically handicapped (45%) as certified by medical authorities. He claims a deduction of Rs. 75,000/- U/s 80U Is he correct?
4. Mr. Shrinivas Gupte purchased a residential flat on 1st January, 2002 and sold it on 30th Dec, 2004. He claims the capital Gain as Long term. Is he correct?
5. Mr. Narayan has attained the age of 65 years on 15th November, 2004. Can he claim rebate U/s 88?

6. Mr. Kartik donated clothes and grains worth Rs. 25,000 to an approved Charitable Institution on 16th March, 2005. Can he claim deduction U/s 80 G?
7. Mr. Yogesh Datey has given his commercial property on rent of Rs. 1,00,000 p.m. He claims this as a business income. Is he right?
8. An Indian Company has its entire business in London. What is the residential status of the Company?
9. Mr. Mohan, son of Mr. Yeshwant, completed age of 18 years on 31st March, 2005. He earned Rs. 20,000 as interest on fixed deposits during the previous year 2004-05. In whose hands the income will be taxed?
10. Mr. P. has debited Rs. 20,000 as sales-tax to his P & L A/c which is unpaid till the due date of filing of his Income-tax return. Can he claim this as a allowable deduction?


Q.6 (a) Define and explain the following according to the Income Tax Act, 1961 (any two): 8

1. Person.
2. Previous Year.
3. Assessee.

(b) Explain the deductions u/s 24 available from income from House property for assessment year 2005-2006. 8


Section II

Q.7 (a) Explain when is a Sale or Purchase of Goods said to take place outside a state as per the provisions of the Central Sales Tax Act, 1956. 10

OR


(a) Define and Explain the term 'Dealer' as per the provisions of the Central Sales Tax Act, 1956.
(b) State with reasons whether the following persons are dealers as per the provisions of the Central
Sales Tax Act 1956:
(i) Company Secretary in Practice.
(ii) Excise Consultant.
(iii) Trader in Computers.

Q.8 Explain "Value Added Tax" (VAT) briefly. What are the benefits derived from VAT? 10

OR

Explain with reasons whether the following are 'Sales' as per the provisions of the Maharashtra Value Added Tax Act, 2002.(10)
(a) Sale of scrap by a scrap dealer.
(b) Mortgage of land.
(c) Sale of liquor.
(d) Consultancy provided by a Chartered Accountant.
(e) Sale of second hand furniture by a dealer in furniture.



Q.9The following information regarding the turnover of purchases and sales transactions is submitted by Mr. Hrishikesh, who started business on 1st May, 2005. Find out whether as per the provisions of the MVAT Act 2002, he is liable for registration and payment of Tax. Give reasons for your answer. (10)

Year & Month	Details of Purchases	--	--	Details of Sales	--
--	Within state	Outside the State	--	Taxfree Goods	Taxable Goods
2005	Taxfree Goods	Taxfree Goods	Taxable Goods	Rs.	Rs.
--	Rs.	Rs.	Rs.	--	--
May	90,000	4,000	5,500	85,000	4,000
June	1,02,000	3,500	3,500	1,50,000	3,500
July	1,50,000	6,000	2,500	1,75,000	1,500
Aug.	1,10,000	2,500	4,000	1,00,000	3,000
Sept,	1,75,000	1,500	3,000	2,50,000	3,500

OR

A dealer purchases the:-

Particular	TotalRs.	Input TaxRs.	Net PurchasesRs.
4% VAT Goods	7,80,000	30,000	7,50,000
12.5% VAT Goods	15,75,000	1,75,000	14,00,000
VAT Exempt Goods	1,50,000	NIL	1,50,000

Additional Information:
(a) VAT payable on sales made during the month is Rs. 3, 27,500/-.
(b) During December, 2005, the dealer utilized 4% VAT Goods costing Rs. 1, 50,000/- as input for manufacturing Exempted Goods.
(c) On 1st December, 2005 there was an opening balance of Rs. 10,000/- in VAT Credit Receivable/set off Account.
(d) The dealer has received a refund fo Rs. 2,500/- out of VAT credit Receivable Account. Prepare a statement of Computation of Tax to be paid under the provisions of Maharashtra Value Added Tax Act 2002.

April 2006

Direct and Indirect Taxation
April 2006

Time: 3Hours                                            Marks: 100

N.B:
1. Question No. 1 is compulsory and carries 22 marks.
2. Attempt any three questions from Question No. 2 to Question No. 6, each carrying 16 marks.
3. Attempt Question No. 7 to Question No. 9, each carrying 10 marks.
4. Answers to both the sections should be written in the same answer-book.

section I
Q.1.
Following is the Profit and Loss Account of Mr. Mangesh for the year ended 31st March, 2005: (22)

Profit and Loss Account for the year ended 31st March, 2005
--	Rs.	--	Rs.
To Salaries	2,10,000	By Gross Profit	4,18,000
To Rent	20,000	By Interest on Bank F.D	8,000
To Postage	7,000	By Dividend from Indian Company.	20,000
To Stationery and Printing	27,000	By Dividend from Co-operative Bank	2,000
To Advertising	20,000	By Winning from Lottery	15,000
To Repairs to Office	22,700	To Interest on Debentures of	--
Conveyance	17,000	Limited Company	5,000
To Income tax	30,000	--	--
To Expenses in Connection with	--	--	--
Scrutiny case of Income Tax	4,000	--	--
To Fees paid to C.A. for Income Tax	10,000	--	--
To Miscellaneous Expenses	25,000	--	--
To Depreciation	5,000	--	--
To Donations	20,000	--	--
To Net Profit	50,300	--	--
Total	4,68,000	Total	4,68,000

Additional Information:
(1) Salaries include bonus due to employees Rs. 30,000 which was not paid before the due date offiling Income Tax Return.
(2) Rent is paid for residential house of Mr. Mangesh.
(3) Repairs to office include a. one time cash payment of Rs. 20,000 on 18/08/2004.
(4) Miscellaneous expenses include purchase of shares of an Indian Company for Rs. 20,000.
(5) Donations include donation by cash Rs. 15,000 and donation of books worth Rs. 5,000 both to an approved charitable trust.
(6) Depreciation as per Income Tax Rules is Rs. 4,000.
Compute the net taxable income of Mr. Mangesh for Assessment Year 2005-06.


Q.2.
Mr. Chandrakant Limaye is employed as a Lecturer in Modern College. He furnishes the following information for the year ending 31st March, 2005 (16)

(i) Gross Salary received	Rs. 30,000 p.m.
(ii) Rent free bun glow (perquisite value)	Rs. 5,000 p. a.
(iii) Leave Salary received	Rs. 15,000
(iv) Bonus received	Rs. 30,000
(v) Arrears of Salary received for (2002-03 and 2003-04)	--
On 17th March, 2005	Rs. 1, 50,000
(vi) Profession Tax deducted from salary	Rs. 200 p.m.
(vii) Examiner ship remuneration from college	Rs. 7,500
(viii) Reimbursement of Medical bills	Rs. 4,800

(ix) He spent Rs. 4,500/- for purchase of books for his employment.
(x) He took a Medical Insurance Policy from GIC on 31st March, 2005 by paying a premium of Rs. 10,000/- in cash.
(xi) He made the following donations during the year :
(a) Rs. 15,000 to National Cultural Fund
(b) Rs. 15,000 to Air force Central Welfare Fund
(c) Rs. 5,000 worth of books given free to poor students.

Mr. Chandrakant Limaye is a handicapped person to the extent of 60%. Compute his net taxable income for the Assessment Year 2005-06.


Q.3.
Mr. Sandeep Patil owns two houses in Mumbai, both of which are used by him for his own residence.The particulars of these houses are as follows for the previous year ended 31/3/2005: (14)

Particulars	House Property I	House Property II
Gross Municipal Valuation	Rs.2,25,000	Rs.3,50,000
Fair Rent	Rs.2,50,000	Rs.4,00,000
Municipal taxes due	Rs.25,000	Rs.35,000
paid	Rs.2,000	Rs.1,000
Repairs	Rs.2,000	Rs.3,000
Insurance Premium due	Rs.500	Rs.600
Ground rent due	Rs.150	Rs.200
Interest on funds borrowed for	--	--
Construction of house property	Rs.40,000	Rs. 40,000
Year in which loan was taken	1997	1998

He also received the following income during the previous year 2004-05:
(a) Accrued Interest on N.S.C. (VII issue) Rs. 6,000
(b) Winning from lottery Rs. 10,000
(c) Interest on deposits with Bank of India Rs. 4,000
(d) Interest on P.P.F. Rs. 5,000.
He also paid Medical Insurance Premium for self, by cheque of Rs. 3,000/-.
Compute the Net Taxable Income of Mr. Sandeep Patil for the previous year 2004-05, relevant to Assessment Year 2005-06.


Q.4.
a) Mr. Sanjay, an Indian Citizen went to U.S.A. for the first time for the purpose of employment on 8 10th May, 2004. He came back to India on 19th November, 2004. Find out his residential status for Assessment Year 2005-06. (8)

b) Mr. Kamlesh purchased a house property for Rs. 1, 00,000 on 27th August, 1978. He made the following additions/alterations to the house property.

Cost of construction of 1st floor in Financial Year 1983-84 Rs. 3, 00,000. Cost of construction of 2nd floor in Financial Year 1990-91 Rs. 4, 00,000.Fair Market Value of the property on 01/4/1981 was Rs. 5, 00,000. He sold the property on 20th October, 2004 for Rs. 55, 00,000.He paid the brokerage of Rs. 55,000 for the sale transaction.The Cost Inflation Index for Financial Year 1981-82 is 1017, for Financial Year 1983-84 is 116, for Financial Year 1990-91 is 182 and for Financial Year 2004-05 is 480.Compute the Capital gain of Mr. Kamlesh chargeable to tax for Assessment Year 2005-06.


Q.5.
Answer any eight of the following questions with reference to Assessment Year 2005-06:- (16)
1. Does clubbing of income include clubbing of losses also?

2. What is the amount of exemptin available u/s. 10 when income of minor child is clubbed with the parent?

3. Mrs. Anuradha Patil who earns an 'Income from Business' attained the age of 65 years on 15th February, 2005. What is the maximum rebate she can claim?

4. Mr. Santosh Katdare has a gross salary of Rs. 96,000/- before giving any deduction u/s. 16, which is not less than 90% of his Gross Total Income. His allowable, investments for Sec. 88 are Rs. 20,000/-. He claims a rebate u/s. 88 @ 20%. Is he correct?

5. State whether remuneration received by a Member of Parliament is taxable as 'Income from Salary’?

6. Mr. Kapil Sawant purchased a flat on 1st June, 2002 for Rs. 4,00,000/ and sold it on 1st February, 2005 for Rs. 4, 75,000/-. He claims the capital gain as 'Long Term’. Is he correct?

7. "Rebate u/s. 88 is available to a partnership firm". Is the statement correct?

8. Mr. Ameya Patwardhan has paid Medical Insurance Premium of his brother who is totally dependent on him. Can he claim deduction u/s. 80 D?

9. A partner has received interest on capital from his partnership firm and claims it as "Income from Other Sources". Is he correct?

10. Mr. Ramesh transferred his tenanted house to Mr. Rajesh and received Rs. 3, 00,000 towards transfer of tenancy rights. Is he liable for Capital Gain Tax?


Q.6.
a) Define and explain the following according to the Income Tax Act, 1961. (Any two) (8)

1. Assesses.
2. Assessment Year.
3. Person.

b) Explain the various deductions u/s. 16 of the Income Tax Act, 1961 available from 'Income from Salary' for Assessment Year 2005-06. (8)

Section II

Q.7.
"Rates of Tax differ in varied Circumstances". Explain with reference to the provisions of Central Sales 10 Tax Act, 1956. (10)
OR

Q.7.Explain with reasons whether the following are "Business Activities" as per the provisions of the Central Sales Tax Act, 1956.

(a) Running of a Private Engineering College.
(b) Plantation of Teak Trees.
(c) Motor car purchased for personal use.
(d) Export of Ice creams.
(e) Running of a Restaurant.


Q.8.
(For REVISED COURSE)

Define and explain the terms 'Purchase Price' and 'Sale Price'as per the provisions of the Maharashtra Value Added Tax Act.2002. (10) State with reasons whether the following are 'Goods' as per the provision of Maharashtra Value Added Tax Act, 2002:

(a) Newspapers.
(b) Mango Trees.
(c) Equity Share of Siemens Ltd.
(d) Residential Flat used for business.
(e) Malai Kulfi.


Q.9.
(For REVISED COURSE)

Mrs. Divya commenced her business from 1st April, 2005. From following information furnished to you by her regarding purchase and sales transactions, find out from which month she will be liable for Registration and to pay tax as per the provisions of Maharashtra Value Added Tax Act, 2002. Give reasons for your answer. (10)

Year and Month	Details of Purchases	--	Details of Sales	--
--	Taxfree Goods	Taxable Goods	Taxfree Goods	Taxable Goods
--	Rs.	Rs.	Rs.	Rs.
April to July 2005	45,000	9,000	60,000	8,000
August 2005	1,00,000	20,000	1,20,000	25,000
September 2005	1,50,000	40,000	1,75,000	50,000
October 2005	80,000	50,000	20,000	15,000
November 2005	20,000	10,000	50,000	20,000
December 2005	1,00,000	25,000	1,20,000	40,000

OR

Q.9.
Mr. Vinu, a Registered Dealer of a Product covered under Schedule 'E' Sells Goods for Rs. 7,50,000/-.

The purcahses required for the product is procured from Registered Dealers within the state as under: Material X Covered by Schedule 'C' Rs. 2,00,000.
Material Y covered by Schedule 'E' Rs. 4,00,000.
Mr. Vinu had an Opening Balance (Credit) in VAT credit receivable Account of Rs. 15,000/-Mr. Vinu had utilised material Y for manufacture of Exempted Goods.
Calculate the tax payable under MVAT Act, 2002.

October 2005

Paper Not Available

March 2005

Direct and Indirect Taxation
March 2005

Time: 3Hours                                            Marks: 100

N.B.:
(1) Q.1 from Section I is compulsory carrying 22 marks.
(2) Answer any three questions from remaining questions from Section I carrying 16 marks each.
(3) Attempt all the questions from Section II carrying 10 marks each.
(4) Answers to both the sections are to be written in same answer book.

SECTION I
Q.1.
The following is the Receipts and payments account of MR. Rajesh, an architect, for the year ending on March 31, 2004.

Receipts Amount	(Rs.)	Payments Amount	(Rs.)
To Balance b/d.	3,00,000	By Salaries to staff	88,000
To Professional fees	6,50,000	By Printing & Stationery	98,300
To Rent from House Property	1,20,000	By Society Maintainence charges for : - Office 8,000 - Houses 5,000	13,000
To Gift received from clients for professional work	8,000	By Advance Tax	30,000
To Loan from HDFC Bank (on April 1, 2003 for House at Panvel)	2,00,000	By Purchase of new house at Panvel (on April 1, 2003)	2,50,000
--	--	By Other Office Expenses	83,000
--	--	By Purchase of Car (on April 1, 2003)	50,000
--	--	By Donation	5,000
--	--	By Mediclaim Insurance Premium (by Cheque)	10,000
--	--	By HDFC Loan Repaid	50,000
--	--	By Municipal Taxes	20,000
--	--	By Interest on HDFC Bank Loan	20,000
--	--	By Balance c/d.	5,60,700
Total	12,78,000	Total	12,78,000

You are also informed that :
(1) The details of his business assets :

Name of the Asset	WDV on 1-4-03	Rate of Depreciation as per I.T. Act
Office Premises	Rs. 10,00,000	10%
Furniture	Rs. 3,50,000	15%
Car	--	20%

(2) He stays in a house at Vashi. He purchased a new house at Panvel on April 1, 2003. The municipal valuation of this house is Rs. 1,00,000. It is rented at a monthly rent of Rs. 10,000 from April 1, 2003.
(3) Municipal taxes paid includes municipal taxes of house at Vashi Rs. 10,000 and Rs. 2,000 for house at Panvel, balance for office.
(4) Donation was made to Indira Gandhi Memorial Trust.
(5) 1/4th of the car use has been for personal purposes.

Determine the taxable income of Mr. Rajesh for the assessment year 2004-05. (22)


Q.2.
Mr. X, joined a company, AB Ltd. on June 1, 2003 and was paid the following emoluments and allowed perquisites as under : (16)
Emoluments :Basic pay – Rs. 50,000 per month Dearness Allowance – Rs. 20,000 per monthBonus (Target Achiever) – Rs. 1,00,000 per month Perquisites :
(1)Furnished accommodation owned by the employer and provided free of cost. Taxable value of this rent free furnished accommodation was Rs. 2,20,000.
(2)Motorcar owned by the company along with Chauffeur for official and personal use, the taxable value being Rs. 36,000.
(3)The company paid medical insurance premium of Mr. X amounting to Rs. 15,000. Before joining the company AB Ltd., he was a Central Government employee and retired on May 31, 2003. He was paid the following emoluments and perquisites till May 31, 2003 by the Government. Basic Salary - Rs. 96,000 p.a. Dearness Allowance- Rs.6,000 p.a.Entertainment Allowance since 1960- Rs. 24,000 p.a. From June 1, 2003 he receives the monthly pension of Rs. 3,000 from the Government. He received Rs. 30,000 as Leave Salary in respect of earned leave at his credit. He received Rs. 1,20,000 as gratuity. Compute the taxable salary of Mr. X for assessment year 2004-05.


Q.3.
a) During the previous year ending on March 31, 2004 Mr. A sells the following :-(8)

Assets	Date of Sale	Sale Proceeds Rs.	Cost of acquisition Rs.	Year of purchase	FMV on 1-4-81 Rs.
Shares	1-4-03	4,10,000	1,00,000	1993-94	1,80,000
Agricultural Land in Urban Area	10-6-03	23,00,000	6,17,250	1986-87	2,00,000
Agricultural Land in Rural Area	25-5-03	30,00,000	2,30,000	1973-74	3,40,000
Debentures (Listed)	10-4-03	3,17,900	2,30,615	1993-94	1,80,000
Personal Car	1-7-03	1,25,000	70,000	1986-87	NotAvailable

Calculate the income under the head Capital Gain of Mr. A for assessment year 2004-05. Cost Inflation Index : F.Y. 2003-04 – 463; F.Y. 1986-87 – 140; F.Y. 1993-94 – 244.

b) Mr. B holds the following securities on April 1, 2003 :(8) - Rs. 1,00,000 7%securities of Tamil Nadu Government. - Rs. 60,000 14% non-listed Debentures of ABC Ltd. On August 1, 2003, he borrows Rs. 33,000 at 7% p.a. and invests it in 8% securities of Central Government purchased at Rs. 110 (Face Value Rs. 100). On October 1, 2003, he further borrows Rs. 40,000 @ 8% p.a. for investing it in 10% listed debentures of DEF Ltd. Determine his income from other sources for the assessment year 2004-05. The interest on all investments are due and received on March 31 every year.


Q.4.
a) Mr. X is a USA citizen. He came to India on October 15, 2003 for a visit and was in India till 31st March, 2004. In earlier previous years, he is in India as under :

1993-94	188 days
1994-95	190 days
1995-96	185 days
1996-97	200 days
1997-98	40 days
1998-99	300 days
1999-00	195 days
2000-01	185 days
2001-02	100 days
2002-03	200 days

Find out the residential status of Mr. X for the assessment year 2004-05 assuming that he is not a person of Indian origin. (8)

b) Compute the income of Mr. Kaka for the assessment year 2004-05, assuming that he is resident but not ordinary resident in India during the previous year 2003-04.(8)

(i)	Interest on company deposits in India	Rs. 70,000
(ii)	Income deemed to be earned in India	Rs. 31,000
(iii)	Income from business, situated in Japan and controlled in India (40% is received in India and balance is received outside India)	Rs. 84,000
(iv)	Salary received in India for services rendered outside India	Rs. 92,000
(v)	Interest received from Government of India (Received outside India)	Rs. 1,60,000
(vi)	Interest received from a foreign company outside India (On capital which is utilized outside India)	Rs. 70,000
(vii)	Past untaxed profit of the year 2000-01 brought into India in May, 2003	Rs. 1,10,000
(viii)	Royalty received in India from a non-resident in respect of technology used by such person outside India	Rs. 50,000
(ix)	Pension from a former employer in India, received in Nepal	Rs. 2,30,000

Q.5.
Answer the following :-
a) Find out the amount of rebate u/s 88 of the Income Tax, 1961 in the cases given below for the assessment year 2004-05.(4)

Assessee		Gross Total Income	Tax on Income (other than LTCG)	Investments
(1)	Mr. K	Rs. 1,40,000	Rs. 15,000	Rs. 59,000 in LIC and Rs. 20,000 in PPF.
(2)	Mr. J	Rs. 66,000	Rs. 2,200	Rs. 20,000 in Infrastructure Bonds and Rs. 70,000 in PPF.
(3)	Mr. L	Rs. 1,51,000	Rs. 16,000	Rs. 30,000 in NSC and Rs. 30,000 in Infrastructure Bonds.
(4)	Mr. M	Rs. 5,50,000	Rs. 1,38,000	Rs. 70,000 in PPF and Rs. 30,000 inInfrastructureBonds

b) The rate of T.D.S. on payment of interest to a resident other than a company is 12%. Is it correct? Give reasons. (2)
c) Master T is the minor son of Mr. N. HE has earned Rs. 1,00,000 in the previous year 2003-04 from acting in a film. In addition to that he earned Rs. 10,000 as interest from debentures of an Indian company. (Debentures were gifted to him by his mother). Who is liable to pay tax on the above incomes? (2)
d) Mrs. X is employed with A Ltd., where her husband Mr. X and his brother are holding 15% shares each, whether the clubbing provision u/s. 64(1)(ii) will be attracted? Explain. (2)
e) Mr. R transferred Rs. 3,00,000 to his wife Mrs. R out of love and attraction. She earns interest on it of Rs. 30,000. In whose hands Rs. 30,000 is taxable? Why?
f) Enumerate any four payments to which TDS provisions are applicable. (4)


Q.6.
a) Define and explain as per Income Tax Act, 1961 (any two) :
(1)Person, (2) Assessee, (3)Previous Year. (8)

b) What is ‘Capital Asset’ as per Income Tax Act, 1961? Whether the following are capital Assets within the definition of sec. 2(14) :

(i) Goodwill of a business
(ii) A House for personal use
(iii) Personal Scooter
(iv) Utensils
(v) Vacant Land
(vi) Jewelry
(vii) Shares of AB Ltd.
(viii) Debentures of XY Ltd. (8)

SECTION II


Q.7.
a) Define and explain the term "Business" as per the provisions of the Central Sales Tax Act, 1956. (4)
b) State, giving reasons, whether the following activities are business activities or not as per Central Sales Tax Act, 1956 : (6)

(i) Sales of Machines by a Machinery Manufacturer
(ii) Purchase of a house for personal use
(iii) Sale of scrap

OR
Explain in details the Provisions of C.S.T. Act, 1956 regarding sale or purchase in the course of Import or Export u/s 5. (10)


Q.8.
Define and explain the following terms under B.S.T. Act, 1959. (Any two) :(a) Goods,(b)Business,(c) Purchase Price (10)

OR

Explain when does a dealer become liable to pay sales tax under Bombay Sales Tax Act, 1959. (10)


Q.9.
From the following Purchase and Sales Register of A and Co. find out from when is the Co. liable for registration, under B.S.T. Act, 1959.

Purchase Register
Date	Inv. No.	Name of Party	Place	Amount (Rs.)	Remarks
1-1-04	101	Shetty, N. M.	Mumbai	50,000	Machinery Purchase – Taxable
3-1-04	201	V. N. Kamat	Nasik	5,000	Raw Materials – Taxable
8-1-04	301	A. N. Reddy	Ratnagiri	30,000	Raw Materials – Taxfree
11-1-04	401	V. T. Shetti	Vashi	40,000	Raw Materials – Taxable
15-1-04	501	H. N. Maniar	Mumbai	9,000	LabourCsharges
25-1-04	601	G. N. Ravi	Valsad	7,000	Raw Materials –Taxable

Sales Register
Date	Inv. No.	Name of Party	Amount (Rs.)	Remarks
8-1-04	01	Sneha T.	15,000	Taxable
13-1-04	02	Vicky	20,000	Taxfree
22-1-04	03	Avinash	60,000	Taxable
24-1-04	04	Genu	30,000	Taxable
28-1-04	05	Anna	10,000	Labour Charges
30-1-04	06	Aparna	30,000	Taxable

Taxable goods are manufactured within the factory and delivered on the date of production. (10)
OR

Q.9.
M/s. Patel & Co. provides you with the following information regarding Sales Tax Liability for the month of January, 04.(10)

Particulars	Rs.
Sale of Schedule "A" goods	33,00,000
­Sale of Schedule "B" goods	18,00,000
Sale of Schedule "B" goods @ 8% (inclusive of Sales Tax Surcharge and Turnover Tax)	21,96,000
Sale of Schedule "c" goods @ 13% (exclusive of taxes)	36,00,000
Cost of Installation	4,00,000
Labour charges recovered	8,00,000
Sale against Form 14	1,00,000
OMS Sales	6,40,000
Sales Return of Schedule ‘A’ Goods	3,00,000
Sales Return of Schedule ‘B’ Goods	5,00,000
Sale Return against Form 14 (including previous month)	2,00,000

The Company is also liable to Pay Purchase Tax of Rs. 1,02,000. They are also entitled to set-off of Rs 2,70,000. They are also liable for Surcharge and Turnover Tax.

October 2004

Direct and Indirect Taxation
October 2004

Time: 3Hours                                            Marks: 100

N.B.:
(1) Q.1 from Section I is compulsory carrying 22 marks.
(2) Answer any three questions from remaining questions from Section I carrying 16 marks each.
(3) Attempt all the questions from Section II carrying 10 marks each.
(4) Answers to both the sections are to be written in same answer book.

SECTION I
Q.1.
Mr. Wadekar gives you the following profit and loss account for the year ended 31^st March, 2003.

--	Rs.	--	Rs.
To opening stock	1,60,000	By Sales	18,50,000
To Purchases	14,05,000	By Closing stock	1,08,500
To Salaries	1,84,350	By Wining from lottery	5,000
To Office expenses	70,400	By Interest on Fixed deposits with bank	15,000
To Office Rent	20,000	By Interest on RBI bonds (exempt u/s. 10)	16,000
To Staff Welfare	13,000	By Bad debts recovered	20,000
To Advertisement expenses	65,000	By Dividend from Indian companies	9,000
To Donations	10,000	--	--
To RDD	21,000	--	--
To Mediclaim insurance paid in cash	10,000	--	--
To Income tax	8,000	--	--
To Depreciation	20,000	--	--
To Net profit	37,110	--	--
Total	20,23,500	Total	20,23,500

Additional Information :
(a) Advertisement expenses include Rs. 11,000 for advertisement in a soveniour of a local political party and Rs. 20,000 for introducing a new product in the market.

(b) Donations are given for the following purpose:
Chief Minister’s Relief fund Rs. 7,500
Donation of books to poor students Rs. 2,500
(c) On 10th August, 2002, furniture of Rs. 20,000 was purchased on Credit, the payment for which was
made on 2nd April, 2003. The same was not recorded in the books of accounts. The rate of depreciation on furniture is 15% p.a. On other fixed assets depreciation was charged as per Income Tax Rules.
(d) Bad Debts recovered of Rs. 20,000 were allowed during previous year 2000-01.
You are required to compute the taxable income of Mr. Wadekar for A.Y. 2003-04.


Q.2.
Mr. Kambli who is suffering from a permanent disability received the following emoluments from BCA Ltd. his employers for last 10 years ended 31st March, 2003;

(a)	Basic Salary (Net of Profession Tax and Tax Deducted at Source)01-04-2002 to 30-09-200201-10-2002 to 31-03-2003	Rs.10,000 p.m.Rs.12,000 p.m.
(b)	Tax Deducted at Source 01-04-2002 to 30-09-200201-10-2002 to 31-03-2003	Rs. 600 p.m.Rs. 700 p.m.
(c)	Professional Tax Deducted from Salary	Rs. 2,350 p.m.
(d)	Dearness Allowance	40% of basic salary
(e)	Entertainment Allowance	Rs.500 p.m.
(f)	Actual amount spent for entertainment	Rs.300 p.m.
(g)	Bonus for the year	Rs.8,000
(h)	Conveyance allowance	Rs.1,000 p.m.
(i)	Actual amount spent out of conveyance allowance	Rs. 800 p.m.
(j)	Commission from employer	1 % of turnover of Rs. 10 Lakhs achieved by him	--
(k)	He needs a personal physical attendant whose salary of Rs. 2,000 p.m. was paid by the employers.
(l)	He paid mediclaim insurance of Rs. 12,000 for himself and Rs. 5,000 for his brother.

You are required to compute his total income for the Assessment Year 2003-04


Q.3.
Mr. Balaji, an Indian Citizen and a professional cricketer toured South Africa, Australia, U.K., West Indies and Zimbabwe on various dates. The details of departure from and arrival to India are as under:

Country	Date of Departure	Date of Arrival
South Africa (for the first time)	01-03-2000	25-03-2002
Australia	15-04-2002	01-05-2002
U.K.	05-05-2002	11-07-2002
West Indies	31-08-2002	14-09-2002
Zimbabwe	01-01-2003	23-03-2003

Q.4.
Mr. Agarkar, a resident of Mumbai, is owner of three houses. House No. 1 is occupied by him for his own residence. House No.2 and 3 are let out. Following are the details of all three houses during the three years ended 31st March, 2003.

--	House No.1	House No.2	House No.3
Date of completion of construction	10-02-1997	15-03-1998	15-08-2001
Interest on construction loan	Rs. 75,000	Rs. 1,10,000	Rs. 1,20,000
Municipal Valuation	Rs. 95,000	Rs. 1,60,000	Rs. 2,25,000
Fair Rent	Rs. 1,00,000	Rs.1,80,000	Rs.2,50,000
Rent per month	--	Rs. 12,000	Rs. 20,000
Vacancy period (months)	--	(2 months)	--
Repairs charges paid	Rs. 25,000	Rs. 15,000	Rs. 10,000
Municipal taxes paid	Rs. 10,000	Rs. 16,000	Rs. 22,500
Unrealized rent of last year recovered during the year	--	--	20,000

Municipal taxes of House No. 2 paid on 28-03-2003 out of which 50% was borne by the tenant whereas Municipal taxes of House No. 3 were fully paid by Mr. Agarkar on 2-5-2003.
During the year he received an income tax refund of Rs. 2,600. He also received Rs. 12,000 as royalty on books.
You are required to compute his taxable income for assessment year 2003-04.


Q.5.
a) Write a note on agricultural income under Income Tax Act 1961.
b) Write any eight items of perquisites which are not taxable at all under Income Tax Act, 1961.


Q.6.
a)
Mr. Gavaskar purchased a residential house on 01-06-1979 for Rs. 1,00,000. He incurred expenses of Rs. 50,000 toward cost of improvement on 02-07-1983. The fair market value of the house on 01-04-1981 was Rs. 1,50,000. He sold the house on 10-10-2002 for Rs. 10 Lakhs. The cost of inflation index for F.Y. 1981-82 is 100, for F.Y.1983-84 is 116 and F.Y. 2002-03 is 447. You are required to compute his capital Gains for Assessment Year 2003-04.

b) Answer ant five with brief reasons wherever necessary:

(i)	Mr. Badani who earns taxable salary from T.N.Ltd. requests the employers not to deduct tax from his salary and offers to pay the income tax on his own. Whether it is correct?
(ii)	Mr. Raju earns Rs. 2,00,000 during Assessment Year 2003-04 as interest on PPF account maintained with state Bank of India. Whether tax needs to be deducted at source?
(iii)	Mr. Patil made a fixed deposit of Rs. 2,50,000 in his wife’s name on which she earned an interest of Rs. 15,000. She offers the same as her income in her income tax return. Whether it is correct?
(iv)	Mr. Sachin gives a gift of Rs. 1,00,000 to his friend Mr. Vinod which he invested in Shares. The dividend on such shares is whose income?
(v)	Mr. Pawar paid life insurance premium of Rs. 10,000 on behalf of his wife and claims rebate u/s. 88. Can he do so?
(vi)	Mr. Umrigar aged 70 years claims rebate u/s. 88B against tax on long term capital gain? Can he do so?

SECTION II

Q.7.
a) Define and explain the term "Dealer" as per the provisions of the Central Sales Tax Act, 1956.

b) State with reasons whether the following person is a Dealer or not as per the provisions of the Central Sales Tax Act, 1956 (any two):

(i)	A film star
(ii)	A professor teaching in coaching class
(iii)	A doctor selling all kinds of medicines

OR


Q.7.
How and when the laibilty to pay tax arises unser the Central Sales Tax Act, 1959? Are there any exceptions?


Q.8.
Explain the provisions regarding Purchse Tax payable by a dealer as per the provisions of the Bombay Sales Tax Act, 1959.

OR

Q.8.
(a)
Define and explain the term “Manufacture” as per provisions of the Bombay Sales Tax Act, 1959.

(b) Explain with reasons whether the following activities are manufacturing activities or not as per the provisions of the Bombay Sales Tax Act, 1959 (ant two):

(i) Assembling TV from various parts.
(ii) Polishing of furniture.
(iii) Retreading of old tyres.


Q.9.
Mr. Anand is a dealer. Find out from which month he will ne liable for registration as per provisions of the Bombay Sales Tax Act, 1959. Give reasons:

MonthYear 2003	Purchases		Sales
Taxable(Rs.)	Tax Free(Rs.)	Taxable(Rs.)	Tax Free(Rs.)
April to June	3,500	18,500	2,500	14,000
July	2,500	24,000	2,000	26,000
August	3,500	52,000	1,000	65,000
September	3,00	25,000	4,000	28,000
October	4,500	72,000	2,500	75,000
November	6,000	25,000	4,500	26,000
December	9,000	75,000	7,000	84,000

OR


Q.9.
Sensex Marketing, a registered dealer, gives you the following details of sales:

Particulars	May 2003 Rs.	June 2003Rs.
Gross sales including sales tax @13%(Schedule “C”goods)	2,26,000	1,13,000
Labour charges received	40,000	60,000
Sale against form 14 (excluding sales tax)	1,00,000	80,000
Resale (Schedule “A” goods)	60,000	1,00,000
Sales (Excluding sales tax) our of Maharashtra	94,000	47,000
Total Turnover	5,20,000	4,00,000

Compute sales tax liability under Bombay Sales Tax Act, 1959, monthwise.

March 2004

Direct and Indirect Taxation
March – 2004

Time: 3Hours                                                Marks: 100

N.B.:
(1) Q.1 from SECTION I is compulsory carrying 22 marks.
(2) Answer any three questions from remaining questions from SECTION I carrying 16 marks each.
(3) Attempt all the questions from SECTION II carrying 10 marks each.
(4) Answers to both the sections are to be written in same answer book.

SECTION I
Q.1.
Mr. Jitendra is the proprietor of a business. Following is the Profit & Loss A/c for the year ended 31st March 2003.


”

To Office Salary	24,000	By Gross Profit	2,51,200
Proprietor’s Salarytd	12,000	Interest on Govt. Securities	12,000
General Expenses	11,000	Dividend fromIndian Companies	3,850
Bad Debts	3,000	Interest on Post Office S/B A/c	2,950
Advertising	8,400	Winning fromCamel Races	24,000
Fire Insurance Premium	3,600	Depreciation	7,800
Motor Car Expenses	3,000	Donation	5,000
Sales Tax	29,00	Interest on Prop. Capital	2,800
Provision for Contingencies	10,000	Income Tax	8,800
Life Insurance Premium	8,000	Net Profit	1,57,600
Total	2,94,000	Total	2,94,000

Additional Information :
(a) Donation is made to Indian Olympic Association.
(b)General Expenses include personal expenses of Rs. 2,000.
(c) Depreciation is found to be in excess by Rs. 3,000 as per the IncomeTax Act.
(d) Advertising Expenses include Rs. 1,500 for sponsoring sports activities amongst his employees.
(e) Out of the Sales tax debited to P/L A/c an amount of Rs. 4,500 is not paid till the date of filing of I. Tax return.
(f) Winning from Camel Races is after T.D.S. of Rs. 6,000.
Compute the Net Taxable Income of Mr. Jitendra for A.Y. 2003-04.


Q.2.
a)Mr. Nikunj who is totally blind is employed with BXL Ltd. The details of his salary for the previous year 2002-03 is as follows:

(a)	Basic Salary	Rs.8,000 p.m.
(b)	D. A.	@ 75% of Basic
(c)	H.R.A. [Exempt amount Rs. 400 p.m. u/s 10(13A)]	@ 20% of Basic
(d)	Entertainment Allowance	Rs.2,000 p.m.
(e)	Arrears of Salary	Rs.5,000
(f)	Advance against Salary	Rs.6,000
(g)	Contribution of Employer to Recognised Provident Fund in excess of Prescribed limits	Rs.2,300
(h)	Interest on Recognised Provident Fund in excess of Prescribed limit	Rs.780
(i)	Bonus equal to 2 months basis was declared.	--
(j)	Amount spent by him on entertainment	Rs.500 p.m.
(k)	Education Allowance [Exempt u/s 10(14) Rs. 1,200]	@ Rs.600 p.m.
(l)	Perquisite value of vehicle provided by employer for personal use	Rs.4,000
(m)	Professional Tax Deducted from Salary	Rs.200 p.m.
(n)	He paid medical insurance premium for himself and his wife	Rs.7,000 by cheque

Compute the net taxable income for A.Y. 2003-04.


Q.3.
Mr. Gharwala is the owner of various house properties. The details of which for the Previous Year 2002-03 is as follows:

(a) Property I is let out on a monthly rent of Rs. 7,500. The fair rent of the property is Rs. 85,000 and municipal valuation is Rs. 80,000. Municipal Tax paid amounted Rs. 8,000 p.a. out of which 50% of the tax is borne by tenant. The house remained vacant for 2 months during the year. Mr. Gharwala had taken loan for construction of this property on which interest paid amounted to Rs. 35,000.

(b) Property II is occupied by himself for his own residence. The municipal valuation of the property is Rs. 1,20,000 and Fair Rent Rs. 1,50,000. The municipal taxes of Rs. 12,000 were paid by him on 29th March 2003. He had constructed this property after 1st April 1999. The Construction started on 01/04/99 and was completed on 31st March 2001. Loan of Rs. 2,00,000 @12% p.a. was taken on 1st April 1999 and is still outstanding. Interest is paid regularly.

(c)Property III was inherited by him from his father which is also kept by him for his own residence. The Municipal valuation of the property is Rs. 46,000 and Fair Rent Rs. 48,000. MR. Gharwala paid municipal taxes of Rs. 4,600 on 10th April 2003 for above house property. He had to pay Rs. 12,000 p.a. as annual charge his sister. Interest on loan for this house property paid was Rs. 6,000 to Mr. Ponting of Australia without any TDS and there is no agent of Mr. Ponting in India for the purpose of income tax.

(d) He also owns an open plot of land which was given on rent during the year for rent of Rs. 20,000.

(e) He had taken a room on rent for his office work at the rent of Rs. 1,500 p.m. However, instead of himself using the room he sub-letted this room to another person at the rate of Rs. 2,000 p.m. during the whole of P.Y. 2002-03.

Compute his Gross Total Income for the A.Y. 2003-04.


Q.4.

a) Mr. Shane, an American Citizen, came to India for the first time on 1st April 1998 and started a business in Mumbai. He went out of India on 1st April 2002 and came back to India on 1st Jan 2003 and was in India thereafter. Find out his residential status for A.Y. 2003-04.

b) Mr. Dhaval, an Indian Citizen, went out of India for the first time for the purpose of his employment outside India on 1st May 2002 and came back to India on 1st December 2002. Find out his residential status for A.Y.2003-04.


Q.5.
a) Define and Explain the following according to the income tax Act, 1961:


(i) Assessee (ii) Person


(iii) Assessment Year (iv) Previous Year.


b)Explain the deductions u/s 24 available from income from house property for A. Y. 2003-04.


Q.6.
a)Mr. Sharewala purchased Shares in Indian Companies (unlisted) as investment on 10th June 1982 for Rs. 2,00,000. On 1st June 2000 he started a business as a dealer in Shares and transferred the entire holdings to the business. The market value of the Shares as on that date was Rs. 8,00,000. The Shares were sold by him for Rs. 9,20,000 on 20th Oct 2002. Compute his income from Capital Gains from the above transactions for A.Y. 2003-04.The cost inflation index for

F.Y. 1982-83 109


F.Y. 2000-01406


F.Y. 2002-03447

b)Answer the following for A.Y. 2003-04 giving reasons wherever necessary:

(i)Mr. Pinkesh has a gross total income of Rs. 1,75,000 and his allowable investments for Sec. 88 are Rs. 60,000. He claims rebate u/s 88 @ 20. Is he correct?

(ii)Mr. Gambhir who is aged 68 claims rebate u/s 88B on tax payable on total income including long term Capital gains. Will it be allowed?

(iii)What is the amount of Interest paid or payable in a P.Y. after which TDS on interest on securities becomes applicable u/s 193.

(iv)What is the rate of TDS on Payments Pursuant to any contract or sub-contract of work u/s 194C?

(v)Mr. Sundaram, a member of HUF, converted his separate property as his HUF property in the year 2001. The income of the HUF from said property is Rs. 25,000 during P.Y. 2002-03.Find out in whose hand the said income will be taxable.

(vi)Mrs. Kavita gets interest on Capital from a partnership firm where her husband is also a partner. The ITO wishes to club the interest paid in the hands of husband u/s 64(i)(ii). Discuss.


SECTION II
Q.7.
a)Define and explain the term "Sale" as per the provisions of the Central Sales Tax Act, 1956.

b)State with reasons whether the following transactions are "Sale" as per the provisions of the Central Sales Tax Act, 1956 (any two):
(i) Sales of illegally imported mobile phones
(ii) Installation of plant
(iii) Hire purchase transaction.

OR
Explain the provisions of Sale/Purchase in course of inter-state trade under the Section 3 of Central Sales Tax Act, 1956.


Q.8.
Explain briefly the provisions of Turnover Tax, under Section 9 of the Bombay Sales Tax Act, 1959.

OR

Define and explain the following according to the Bombay Sales Tax Act, 1959 (any two):(i) Resale (ii) Sale Price (iii) Goods.


Q.9.
Mr. Nishu furnishes the following information regarding his turnover of purchases and sales transactions. You are requested to find out whether & from which month, as per the provisions of the Bombay Sales Tax Act, 1959, he is liable for registration and paying Sales Tax. Give reasons for your answer.

Month	Details of Purchase				Details of Sales
	Tax Free Goods	Import of		Total	Tax Free Goods	Taxable Goods	Total
		Tax Free Goods	Taxable Goods
	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.
December 2002	1,60,000	2,000	2,400	1,64,400	2,00,000	6,000	2,06,000
January 2003	1,00,000	4,000	2,400	1,06,400	80,000	1,600	81,600
March 2003	1,80,000	3,000	5,000	1,88,000	1,60,000	1,600	1,61,600
April 2003	1,80,000	3,000	6,500	1,89,500	2,30,000	9,000	2,39,000

OR

Q.9.
M/s Raj & Co. requests you to compute liability under Bombay Sales Tax Act, 1959 for the month of February 2004, from the following information. The firm is a registered dealer under Bombay Sales Tax Act, 1959.

Particulars	Rs.
Sale of Schedule "A" goods	80,000
Sale of Schedule "B" goods	40,000
Sale of Schedule "c" goods ( at the rate of 13%)	1,00,000
Sale out of Maharashtra	2,00,000
Labour charges received	80,000
Resale of Schedule "C" goods (Registered dealer purchases)	1,20,000
Total	6,20,000
Less: Sale Returns : of Schedule" A" goods	4,000
Second Sale (Resale of Schedule "c" goods)	6,000
Schedule "C" goods	10,000
Total	20,000

M/s Raj & Co. is also liable to pay purchase tax of Rs. 4,000. Set off available for this month is Rs. 7,300.
Sales figures are exclusive of Sales tax.