223

Roll No
Time allowed : 3 hours Maximum marks : 100
Total number of questions : 8 Total number of printed pages : 5
PART A
(Answer Question No.1 which is compulsory
and any three of the rest from this part.)

1. (a) Raman has furnished the following particulars from the previous year
2002-03. Calculate his total income if he is a non-resident
Rs.
Salary for 3 months received in India (computed) 9,000
Dividend received in Germany from British companies
out of which Rs.3,000 were remitted to India 22,000
Income from business in Pakistan being
controlled from India 10,000
Interest on saving bank deposits in State Bank of India 1,000
Amount brought to India out of past untaxed
profit earned in Japan 20,000
Income from house property in India (computed) 3,400
(3 marks)
(b) Vinod is the owner of the three houses, which are all let out and covered
by the Rent Control Act. From the following particulars, find out the
gross annual value in each case :

Particulars House - I House II House - III

(Rs.) (Rs.) (Rs.)

Municipal value 30,000 26,000 35,000

Annual rent 42,000 36,000 30,000
Fair rent 36,000 28,000 30,000
Standard rent 30,000 35,000 36,000
Unrealised rent 7,000 9,000 2,500
Period of vacancy 1 month 2 months 3 months
(3 marks)
(c) Explain the scheme of partial integration of agricultural income with
the total income for computing tax liability.
(3 marks)
(d) Discuss the provisions relating to rectification of mistakes apparent from
record.
(3 marks)
(e) Describe the procedure for computation of capital gains on transfer of
shares of an Indian company by non-residents.
(3 marks)

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2. (a) Vivek is a leading lawyer of Mumbai. He deposits in the bank all the
receipts and always pays all the expenses by cheque. The analysis of his
bank account for the year ending 31st March, 2003 is as under :
Rs. Rs.
Balance b/f 7,500Salaries 14,000
Professional fees 1,40,000Rent of chamber 4,500
Dividend 8,000Telephone expenses 1,000
House rent 22,500 Magazine subscription 3,000
Income from horse race Motor car expenses 8,000
(gross Rs.15,000) 10,000 Purchase of motor car 25,000
Share of income from HUF 7,110 Misc. office expenses 5,500
Advance payment of
income-tax 40,000
Donation to Mumbai
University 10,000
Personal expenses 45,500
House property expenses:
Taxes 5,000
Repairs 1,500
Insurance 1,500
Collection charges 2,000 10,000
Balance c/f 28,610
1,95,110 1,95,110

Compute his total taxable income after taking into account the following
information :

(i) One-fourth of the motor car expenses relate to personal use.

(ii) Rate of depreciation on motor car is 20%.
(iii) Vivek stays in his house, the gross annual value of which is
Rs.9,800.
Following are the expenses which have been included in the above
account in respect of this house :
Insurance premium, Rs.500
Municipal taxes Rs.2,400
(10 marks)

(b) What do you understand by advance payment of tax ? When does the
liability to pay advance tax arise ? When such a tax is to be paid and how
it is calculated and paid ?
(5 marks)
3. (a) Rajesh, a director at Young Pvt Ltd., Mumbai, carrying on transport
business has submitted the following particulars of his income for the
assessment year 2003-04. Compute his taxable income and tax payable :

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(i) Directors remuneration and perquisites :

Remuneration @ Rs.11,000 p.m. Rs.1,32,000.

Free use of car of engine capacity of 1,500 cc provided by

the company.

The company has provided rent-free accommodation

(unfurnished) to Rajesh at Mumbai. It is ascertained that for
this purpose the company has obtained a flat on lease from
Prem Ltd. for which the company pays a rent of Rs.40,000 p.a.
which is also the fair rental value.

Medical expenses met by the company on ordinary

treatment of Rajesh and members of his family Rs.4,500.

(ii) Rajesh was occupying a bungalow on rent at New Delhi since

November, 1986. He agreed to transfer his tenancy right in the
said bungalow in favour of Bala Ltd. for a sum of Rs.2,00,000
payable as follows :

Rs. 50,000 in cash.

A flat valued at Rs.1,50,000 (at cost) in the new building to

be put up by Bala Ltd to be allotted free of cost. The cash
payment was made on 5th April, 2002 and the flat was allotted
to him on 5th October, 2002 which was kept for his own
residence from that date.
(10 marks)

(b) Explain the income-tax provisions regarding set-off and carry forward
of losses.
(5 marks)

4. (a) Profit and loss account of a partnership firm for the year ended 31 st
March, 2003 is as follows :

Rs. Rs.

Cost of goods sold 10,00,000 Sales 15,00,000

Remuneration to partners 1,45,000 Rent of house
Interest to partners @ 20% p.a. 40,000 property 60,000
Municipal taxes of house property 25,000 Dividend 1,70,000
Other expenses 2,40,000
Net profit 2,80,000
17,30,000 17,30,000

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Other information :
(i) Out of other expenses, Rs.18,400 is not deductible under sections
36, 37(1) and 43B.
(ii) On 15th January, 2003, the firm pays an outstanding sales tax
liability of Rs.54,700 for the previous year 2001-02. As this
amount pertains to the previous year 2001-02, it has not been
debited to the aforesaid profit and loss account.
Calculate remuneration deductible under section 40(b).
(5 marks)
(b) Is it compulsory to file a claim of refund ? Discuss.
(5 marks)
(c) Discuss the provisions of section 264 of the Income-tax Act, 1961 relating
to revision of orders by the Commissioner of Income-tax (CIT) in favour
of the assessee.
(5 marks)
5. (a) Bharat has the following assets and liabilities on the valuation date :
Rs. in lakhs
Residential house 40
A farm house, 15 km. away from local limits of Kolkata 10
Car for personal use 6
Jewellery 14
Aircraft for personal use 150
Urban land (construction is not permitted under the law) 10
Cash in hand 1.5
Shops given on rent 20
Gold deposit bonds 10
Loan taken for purchase of aircraft 50
Compute the net wealth of Bharat and find out wealth-tax payable.
(10 marks)

(b) Discuss the provisions of self assessment under the Income-tax Act,
1961.
(5 marks)
PART B
(Answer ANY TWO questions from this part.)
6. (a) Explain the basic concept of assessable value as contained in section 4 of
the Central Excise Act, 1944.
(8 marks)
(b) What are the circumstances under which customs duties may be assessed
provisionally ?
(8 marks)
(c) What is penultimate sale in the course of export under the Central Sales
Tax Act, 1956 ?
(4 marks)
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7. (a) Adwell Co. of Indore (Madhya Pradesh) has supplied the following
statement of sales :

(i) Sales of cloth Rs.12,00,000 of which Rs.7,50,000 sold in Madhya

Pradesh and rest in Rajasthan.
(ii) Sales on Form D to Rajasthan government : Rs.6,24,000.
(iii) Sales to a registered dealer of Gujarat for sale on Form C of such
goods which are given in his registration certificate : Rs.4,68,000.
(iv) Sale of declared goods to unregistered dealers of Maharashtra :
Rs.9,45,000.
(The rate of sales-tax on such goods is 2% in the State and the
customer returned goods worth Rs.46,500 within 6 months.)
(v) Sale to a registered dealer of Gujarat of such undeclared goods
which have not been given in his registration certificate :
Rs.3,63,000. (Sales tax on such goods in the State is 7%.)
(vi) Sale of goods to Bangladesh : Rs.6,00,000. (Rate of sales tax in the
State is 4%)
(vii) Subsequent sale during inter-State trade : Rs.1,20,000. (Rate of tax
in State is 10%).
Compute the taxable turnover under the Central Sales-tax Act, 1956.
Sales include the sales tax.
(10 marks)

(b) Define the following terms under the Central Excise Act, 1944 :
(i) Goods
(ii) Excisable goods
(iii) Manufacture or produced
(iv) New excise central code number (E.C.C.).
(10 marks)

8. (a) What are the provisions of the Customs Act, 1962 with regard to grant of
exemption from customs duty ?
(8 marks)
(b) State the provisions of duty drawback under the Customs Act, 1962.
(8 marks)
(c) State the provisions relating to cancellation of registration at dealers
request under the Central Sales Tax Act, 1956.
(4marks)

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