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.
Q.1.
Mr. Wadekar gives you the following profit and loss account for the year ended 31st 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? |
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 |
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.
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 |
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.
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