Solapur University Question Paper
M.Com. (Part – I) (Semester – II) (Old) Examination, 2014
TAXATION (Paper – I) (Gr. C)
Day and Date : Saturday, 19-4-2014 Total Marks : 50
Time : 11.00 a.m. to 1.00 p.m.
Instructions : i) Question No. 1 and 2 are compulsory.
ii) Answer any three questions from the remaining.
iii) All questions carry equal marks.
iv) Figures to the right indicate marks.
1. Select the correct alternative : 10
i) Under the Head Business and Profession, the method of accounting which
an assessee can follow shall be
a) Mercantile system only
b) Cash system only
c) Mercantile or cash system only
d) None of these
ii) Where the machinery, plant and furniture is used by the assessee for the
purpose of carrying on business and profession, he shall be entitled to
deduction under Section 31 on account of
a) Current repairs other than expenditure in the nature of capital expenditure
b) Revenue and capital expenditure on repairs
c) Any repairs
d) None of these
iii) W.D.V. of block of assets at 15% as on 1-4-2011 is Rs. 5,00,000. An asset
amounting to Rs. 1,00,000 was acquired on 1-11-2011 and put to use on
1-12-2011. During the previous year 2011-12 a part of the block (other than
the new asset) is sold for Rs. 5,40,000. The depreciation to be allowed for
this block shall be
a) Rs. 9,000 b) Rs. 4,500
c) Rs. 5,000 d) None of these
SLR-N – 28 -2-
iv) Deductions under Section 37(1) shall be allowed of those expenditure which
are of
a) Revenue nature
b) Capital nature
c) Both revenue and capital nature
d) None of these
v) If physical shares are sold through brokers, the date of transfer shall be
a) The date on which shares are transferred by the company
b) The date of broker’s note book
c) The data of broker’s note book provided such transaction is followed by
delivery of shares
d) None of these
vi) The assessee is allowed to opt for market value as on 1-4-1981 in case of
a) All capital assets
b) All capital assets other than depreciable asset
c) All capital assets other than depreciable assets, goodwill of a business,
right to manufacture, tenancy rights, loom hours and route permits
d) None of these
vii) For claiming exemption under Section 54, the assessee should transfer
a) Any house property
b) A residential house property
c) A residential house property the income of which is taxable under the
head income from house property
d) None of these
viii) Winning from lotteries, cross word puzzles, horse races and other races,
card game, etc. are casual income and hence
a) Fully exempt
b) Exempt up to Rs. 5,000
c) Fully taxable
d) None of these
-3- SLR-N – 28
ix) Gift, whether in cash or kind, received by an individual on the occasion of
his/her marriage shall be
a) Fully exempt even if it exceeds Rs. 50,000
b) Fully taxable if it exceeds Rs. 50,000
c) Exempt up to Rs. 50,000 and balance taxable
d) None of these
x) Deduction under Section 80C in respect of term deposit with a scheduled
bank is allowed if the term deposit is for a period
a) Not less than 3 years
b) Not less than 5 years
c) Not less than 7 years
d) None of these
2. Write short notes on any two from the following : 10
i) Block of assets under Income Tax Act, 1961.
ii) Any 5 deductions under Section 80 of the Income Tax Act, 1961.
iii) Definition of the term Capital Assets under Income Tax Act, 1961
iv) Income from other sources.
v) Disallowance under Section 40A(3) of the Income Tax Act, 1961.
3. Girish is engaged in the business of transportation of goods. On 1-4-2011 the
W.D.V. of his various assets was as given below : 10
Rs.
A) Office building (Rate of depreciation 10%) 9,20,000
B) Commercial vehicles (Rate of depreciation 30%) 30,90,000
C) Car (Rate of depreciation 15%) 2,10,000
During the year, he sold one of the commercial vehicles which was over the age of
15 years for Rs. 60,000. It was replaced by another vehicle at the cost of Rs. 9,00,000
on 1-11-2011. A new vehicle was purchased on 1-1-2012 for Rs. 15,00,000.
Calculate depreciation admissible for the previous year 2011-12.
4. Kamlesh is the proprietor of a business. His profit and loss account for the year
ending 31-3-2012 is as follows : 10
Particulars Rs. Particulars Rs.
To Establishment 2,30,000 By Gross profit 6,17,180
To Bonus 10,000 By Interest on government
To Rent, rate and taxes 48,000 securities 7,120
To General charges 7,500 By Rent from house property 96,000
To Household expenses 28,000
To Commission 18,000
To Discount and allowance 4,000
To Provision for bad debts 12,000
To Postage and telegrams 2,500
To Law charges 7,500
To Advertising 15,800
To Gift and presents 1,200
To Fire insurance premium
(for goods) 4,000
To Sales tax 14,800
To Repairs and renewals 3,000
To Loss on sale of motors car
(used for private purposes) 2,500
To Life insurance premium 4,000
To Wealth-tax 3,000
To Interest on capital 4,500
To Audit fee 5,000
To Interest on bank loan 7,000
To Provision for depreciation 25,000
To Provision for income tax 15,000
To Net profit transferred to
capital account 2,48,000
Total 7,20,300 Total 7,20,300
SLR-N – 28 -4-
Following further information is given :
1) Actual bad debts written off during the year amount to Rs. 6,000.
2) Amount of income tax actually paid during the year is Rs. 8,000.
3) Depreciation allowable is Rs. 24,000 as per income tax rules.
4) Advertising expenses include Rs. 10,000 spent on special advertising
campaign to open another new shop in the market.
5) Law charges are in connection with trade mark.
6) R carries on his business from rented premises, half of which is used as his
residence. Rent, rates and taxes include Rs. 8,000 paid as rent of the premises
during the year.
Compute business income of Kamlesh for the assessment year 2012-13.
5. Gaurav is resident of India. He furnishes the following information about his
incomes during previous year 2011-12. 10
i) Capital gain Rs. 10,500 from a house which he occupied for two years before
the date of sale 31-7-2011.
ii) On 31-12-2011, he sold equity shares of Thapar Ltd., for Rs. 1,25,000 through
the recognized stock exchange, which were purchased by him on 1-4-1986
for Rs. 21,000. Securities transaction tax paid Rs. 125.
iii) He sold an agricultural land for Rs. 5,25,500 on 5-4-2011. The land was
owned by him since 4-7-2001, and was purchased for Rs. 6,000. The land is
situated in village with population of 8,000.
iv) On 1-3-2012, he sold a flat for Rs. 8,82,500 which was purchased by him on
1-1-1977 for Rs. 60,000. The fair market value of this flat was Rs. 90,000 on
1-4-1981.
Compute his taxable income from capital gain for assessment year 2012-13.
-5- SLR-N – 28
6. From the following particulars submitted by Rawat, compute his income from
other sources for the assessment year 2012-13. 10
Rs.
Director’s meeting fees received from Y Ltd. 3,000
Agricultural income from land situated in India 10,000
Agricultural income from Nepal 15,000
Interest :
a) From bank on FDR (Net) 10,800
b) On post office saving account 600
c) On Government securities 1,200
d) On Public Provident Fund A/c. 4,000
e) On National Savings Certificate VIII issue 3,000
Dividend from A Limited declared on 25-8-2011 8,000
Lottery prize received after T.D.S. 28,000
Rent from subletting of a flat 12,000
(rent paid to landlord for the flat is Rs. 6,000)
Rawat spent Rs. 600 for realizing the rent. He had also spent Rs. 10,000 for the
purchase of lottery tickets and received the prize on one ticket.
_____________________
M.Com. (Part – I) (Semester – II) (Old) Examination, 2014
TAXATION (Paper – I) (Gr. C)
Day and Date : Saturday, 19-4-2014 Total Marks : 50
Time : 11.00 a.m. to 1.00 p.m.
Instructions : i) Question No. 1 and 2 are compulsory.
ii) Answer any three questions from the remaining.
iii) All questions carry equal marks.
iv) Figures to the right indicate marks.
1. Select the correct alternative : 10
i) Under the Head Business and Profession, the method of accounting which
an assessee can follow shall be
a) Mercantile system only
b) Cash system only
c) Mercantile or cash system only
d) None of these
ii) Where the machinery, plant and furniture is used by the assessee for the
purpose of carrying on business and profession, he shall be entitled to
deduction under Section 31 on account of
a) Current repairs other than expenditure in the nature of capital expenditure
b) Revenue and capital expenditure on repairs
c) Any repairs
d) None of these
iii) W.D.V. of block of assets at 15% as on 1-4-2011 is Rs. 5,00,000. An asset
amounting to Rs. 1,00,000 was acquired on 1-11-2011 and put to use on
1-12-2011. During the previous year 2011-12 a part of the block (other than
the new asset) is sold for Rs. 5,40,000. The depreciation to be allowed for
this block shall be
a) Rs. 9,000 b) Rs. 4,500
c) Rs. 5,000 d) None of these
SLR-N – 28 -2-
iv) Deductions under Section 37(1) shall be allowed of those expenditure which
are of
a) Revenue nature
b) Capital nature
c) Both revenue and capital nature
d) None of these
v) If physical shares are sold through brokers, the date of transfer shall be
a) The date on which shares are transferred by the company
b) The date of broker’s note book
c) The data of broker’s note book provided such transaction is followed by
delivery of shares
d) None of these
vi) The assessee is allowed to opt for market value as on 1-4-1981 in case of
a) All capital assets
b) All capital assets other than depreciable asset
c) All capital assets other than depreciable assets, goodwill of a business,
right to manufacture, tenancy rights, loom hours and route permits
d) None of these
vii) For claiming exemption under Section 54, the assessee should transfer
a) Any house property
b) A residential house property
c) A residential house property the income of which is taxable under the
head income from house property
d) None of these
viii) Winning from lotteries, cross word puzzles, horse races and other races,
card game, etc. are casual income and hence
a) Fully exempt
b) Exempt up to Rs. 5,000
c) Fully taxable
d) None of these
-3- SLR-N – 28
ix) Gift, whether in cash or kind, received by an individual on the occasion of
his/her marriage shall be
a) Fully exempt even if it exceeds Rs. 50,000
b) Fully taxable if it exceeds Rs. 50,000
c) Exempt up to Rs. 50,000 and balance taxable
d) None of these
x) Deduction under Section 80C in respect of term deposit with a scheduled
bank is allowed if the term deposit is for a period
a) Not less than 3 years
b) Not less than 5 years
c) Not less than 7 years
d) None of these
2. Write short notes on any two from the following : 10
i) Block of assets under Income Tax Act, 1961.
ii) Any 5 deductions under Section 80 of the Income Tax Act, 1961.
iii) Definition of the term Capital Assets under Income Tax Act, 1961
iv) Income from other sources.
v) Disallowance under Section 40A(3) of the Income Tax Act, 1961.
3. Girish is engaged in the business of transportation of goods. On 1-4-2011 the
W.D.V. of his various assets was as given below : 10
Rs.
A) Office building (Rate of depreciation 10%) 9,20,000
B) Commercial vehicles (Rate of depreciation 30%) 30,90,000
C) Car (Rate of depreciation 15%) 2,10,000
During the year, he sold one of the commercial vehicles which was over the age of
15 years for Rs. 60,000. It was replaced by another vehicle at the cost of Rs. 9,00,000
on 1-11-2011. A new vehicle was purchased on 1-1-2012 for Rs. 15,00,000.
Calculate depreciation admissible for the previous year 2011-12.
4. Kamlesh is the proprietor of a business. His profit and loss account for the year
ending 31-3-2012 is as follows : 10
Particulars Rs. Particulars Rs.
To Establishment 2,30,000 By Gross profit 6,17,180
To Bonus 10,000 By Interest on government
To Rent, rate and taxes 48,000 securities 7,120
To General charges 7,500 By Rent from house property 96,000
To Household expenses 28,000
To Commission 18,000
To Discount and allowance 4,000
To Provision for bad debts 12,000
To Postage and telegrams 2,500
To Law charges 7,500
To Advertising 15,800
To Gift and presents 1,200
To Fire insurance premium
(for goods) 4,000
To Sales tax 14,800
To Repairs and renewals 3,000
To Loss on sale of motors car
(used for private purposes) 2,500
To Life insurance premium 4,000
To Wealth-tax 3,000
To Interest on capital 4,500
To Audit fee 5,000
To Interest on bank loan 7,000
To Provision for depreciation 25,000
To Provision for income tax 15,000
To Net profit transferred to
capital account 2,48,000
Total 7,20,300 Total 7,20,300
SLR-N – 28 -4-
Following further information is given :
1) Actual bad debts written off during the year amount to Rs. 6,000.
2) Amount of income tax actually paid during the year is Rs. 8,000.
3) Depreciation allowable is Rs. 24,000 as per income tax rules.
4) Advertising expenses include Rs. 10,000 spent on special advertising
campaign to open another new shop in the market.
5) Law charges are in connection with trade mark.
6) R carries on his business from rented premises, half of which is used as his
residence. Rent, rates and taxes include Rs. 8,000 paid as rent of the premises
during the year.
Compute business income of Kamlesh for the assessment year 2012-13.
5. Gaurav is resident of India. He furnishes the following information about his
incomes during previous year 2011-12. 10
i) Capital gain Rs. 10,500 from a house which he occupied for two years before
the date of sale 31-7-2011.
ii) On 31-12-2011, he sold equity shares of Thapar Ltd., for Rs. 1,25,000 through
the recognized stock exchange, which were purchased by him on 1-4-1986
for Rs. 21,000. Securities transaction tax paid Rs. 125.
iii) He sold an agricultural land for Rs. 5,25,500 on 5-4-2011. The land was
owned by him since 4-7-2001, and was purchased for Rs. 6,000. The land is
situated in village with population of 8,000.
iv) On 1-3-2012, he sold a flat for Rs. 8,82,500 which was purchased by him on
1-1-1977 for Rs. 60,000. The fair market value of this flat was Rs. 90,000 on
1-4-1981.
Compute his taxable income from capital gain for assessment year 2012-13.
-5- SLR-N – 28
6. From the following particulars submitted by Rawat, compute his income from
other sources for the assessment year 2012-13. 10
Rs.
Director’s meeting fees received from Y Ltd. 3,000
Agricultural income from land situated in India 10,000
Agricultural income from Nepal 15,000
Interest :
a) From bank on FDR (Net) 10,800
b) On post office saving account 600
c) On Government securities 1,200
d) On Public Provident Fund A/c. 4,000
e) On National Savings Certificate VIII issue 3,000
Dividend from A Limited declared on 25-8-2011 8,000
Lottery prize received after T.D.S. 28,000
Rent from subletting of a flat 12,000
(rent paid to landlord for the flat is Rs. 6,000)
Rawat spent Rs. 600 for realizing the rent. He had also spent Rs. 10,000 for the
purchase of lottery tickets and received the prize on one ticket.
_____________________
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