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1. (a) Choose the most appropriate alternative:(/'| The basic exemption limit for a non-resident super senior citizen aboveassessment year 2012- 13 is

,. t fls. 1,80,000 B. Rs. 2,50,000

r-P7(ADT)Syllabus 2008

Full Marks: 100

lx13=13the age of 80 years for the

D. Rs. I,60,000C. Taxable under the D. Adjusted towards thehead 'lncome from patent value in theother sources' --block of assets

D. None of theseD. Taxable as capital

INTERMEDIATE EXAMINATIONDecerrber 2012

Applied Direct TaxationTimeAllowed: 3 Hours

The figures in the margin on the right side indicate full marks.lrswer Question No, I which is compulsory ancl any tive from the rcst.

Wherever necessary, you may make suitctble assumptions and stdte them clearly in your dnswer.Working notes shouldfonn part of the anstler

All questions relate to lhe assessment year 2012-l 3, unless stated otherwise-

C. Rs. 5,00,000(ii) When patent is transferred, the amount received isA. Not chargeable B. Chargeable under theto tax head 'Profits andgains of business' or profession'(i{i) Rent derived flrom land located outside India, used exclusively for agricultural purpose isA. Agricultural income B. pxempt income C. Taxable as business D. Taxable under theincome _ head 'lncorre fromother sources'(iv) Ram introduced his building costing Rs. 10,00,000 acquired in April,2007 into the business newlycommenced by him from 01.04.2011. The actual cost ofbuilding for the purpose ofdepreciation for theassessment year 2012-13 would be Rs.A. 10,00,000 B- 5,90,490 c.6,56,100 D. None of these.(v) Motor car with more than 1-6J!lrs cubic capacity is given to the employee both for official and pesonaluse rvith expenditure on running and maintenance met by the employer. The car was self driven by theemployee. The perquisite value shall beA. Rs. 1,200 p.m. B. Rs. 1,800 p.m. ? Rs.2,400 p.m. D. Nl(vit The liability for payment of advance tax would arise only when the tax liability of the taxpayer afterreducing tax deductible at source exceeds(A.. Rs. 10,000 B. Rs.5,000 C. Rs.20,000(vii) Amount is received under the notified reverse mortgage scheme, isA. Taxable as'Income B. Exempt from tax C. 50% taxablefrom other sources' gain(viii) a 2131,6"1n, an employee in a transport company, received Rs. 10,000 per month by way ofallowance tomeet his personal expenses in the course of running such transport system from one place to another.The amount chargeabJe lo tax is D. Fully exernpt

Please Turn OverA. Nil B. Rs. 3,000 p.m. C. Fullv taxable

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I-P7(ADT)Syllabus 2008 (2)(ix) Rajiv received scholarship of Rs. 20,000 tochargeable to tax is Rs.A. NiI B. Rs. 20,000

A. Rs. 1,20,000 B. Rs. 1,05,000

meet the cost of education. The amount of scholarshipC. Rs. 10,000 D. Rs. 5,000

C. NiI D. Rs.30,000

(x) Sita received farrily pension ofRs. 10,000 per month in the capacity ofwindow ofthe deceased spousewho died in the course ofoperational duties in Indian anny. Thi amount of family pension chargeable totax is(xi) A religious trust registered under section l2AA received Rs. 2,00,000 by way of anonymous donation.The total amount of donation received during the year was Rs. 15,00,0b0. Th" uI1ornt of anonymousdonatipn chargeable to tax is

A. Rs. 2,00,000 B. Rs. 1,00,000 C. Rs. 75,000 D. Nil. Not taxable(xii) Fees paid to Regishar ofcompanies for increasing the authorized capital ofa company isA. capital expenditure B. Fully deductible c. 50% deductible D. ,5% deductible(xiii) Raja gifted b building to Miss Vimala on 02.04.201 l, its market value on tlle said date being Rs. 30 lacs.Miss Vimala got married to his son on 12.03.2012,The market value on the said datewas Rsl32 lacs. Thevalue ofthis house as on 31.03.2012, as per schedule III to the Wrath Tax Act is Rs. l5 lacs. The valueofhouse includible in the net wealth ofRaja, as on 31.03.2012 isA. Rs. 30,00,000(b) Fill up the blanks:

B. NI C. Rs. 15,00,000 D. Rs. 32,00,0001xl2=12(i) Interest received on delayed payment of enhanced compensation shall be de"rn"6 1o 6"

-(incdme./not an income/interest relating to the concemed year alone is income) ofthe year in which it is received.$) Gift received from a trust registered under section l2AA is - linituaealnot included) in thetaxable income ofan individual.(iii) Any sum paid on account ofwealth tax is

-(deductible/not deductible) while computing incomefrom other sources.

(iv) Dividend received from a company having only agricultural income is -- (agricultural income/non-agricultural income/S0% taxable) in the hands of its shareholder.(v)irD

.(vn)(viu'(ix)

(x)(xi)

There are two schools of Hindu Law, one in Mitakshara and the other is

-.

?he.depreciation allowable in respect ofan asset used for the purpose ofbusiness for less than 180 daysshall be restricted to -----1- (50% l25o/ol75o/o) of the normjl rate of depreciation.ihe rate of TDS will be -,--+-e- in all cases, if pAN is not furnished by the deductee.The minimum altemate tax u/s 115JB for the A,y 2012- 13 shall be i - % of book profit [Basic rateexcluding surcharge, education cess, etc.].The minimum penalty levied u/s 27lA for not maintaining books of account, documents as requiredu/s 44AA is

--.

Prima facie, revision of any order can be made by the commissioner of Income-tax within-

four years.Unabsorbed loss underthe head 'Capital gains' shall be carried forward for a pe odof- .-assessmentyeprs immediately following the assessment year in which such loss was incurred.(xii) -oss from gembling lcatrUcarVotl be carried forward and set off in subsequent years under., profits from gambling.

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2. (a) State the difference between residential status ofa company and that of others. z(b) Explain the difference between'Total Income, and ,Gross Total Income,. -" z(5) :lR'who resides at Delhi, gets Rs. 6,00,000 as basic salary. He receives Rs. 1,70,000 as house rent allowance.Rent paid by him is Rs. 1,80,000. Find out the amount oftaxable HRA for the assessment year ZOl2-13.- 4(d) Mr A fumishes the following particulars ofhis incorne during the previous year 201l-12: 7(i) Income from agriculture in Bangladesh, received thereof Rs. 2,00,000 and subsequently remitted toIndia.(ii) Gift ofRs. 52,000 received in foreign currency from a relative in India.(iii) Anears of salary Rs. 70,000 received in India from a former employer in England. T * - c-(iv) Income from property received abroad but later on remitted to India Rs. 3,20,000. (Rs. I lakh used inBahrain for educational expenses and Rs. 2 lakhs remitted in India later).(v) Profit from business outside India managed from India Rs. 90,000 and received outside India. "- L- L"Find out the gross total income of Mr, A for the assessment year 2012-13 if A is (i) Resident and ordinarilyresident (ii) Resident but not ordinarily resident and (iii) Non-resident.

\t (a) Dn 01.05.2011, Mr. Rama transfened the right to receive rental income arising from a factory godown ownedoy him, to his major son Mr. Lava, for a period of l0 years. The rental income i".ivea isis. t'0,'000 per month.On 12.03.2008, h^e gifted-2000 shares offace value ofRs. 100 each, in Janak Granites Ltd., a listed company,tdiris wife Mrs. Seetha. Mr. Rama had purchased them on 19.02,2006 at Rs. l l0 each,Janak Granites Ltd. allotted bonus shares in the ratio of l: I on 12.04.2009. Mrs. Seetha sold all shares of theabove company on 15.01.20 ? in the National Stock Exchage for a net consideration of Rs. 180 per share, pershare, paying the applicable STT thereon.Discuss how the above items will be treated in the hands of Mr. Rama and Mrs. Seetha for the assessment year2012-13 (Computation of income is not required), 5(b) Excel Ltd- allotted 1000 (sweat) equity shares ofRs. l0 each to Mr. Rao, Ceneral Manager. The fair marketvalue-of the shares computed in accordance with the method prescribed under the Incomf+ax AcyRules wasRs, 500 per share, whereas it was allotted at Rs. 300 per share.What is the perquisite value.of sweat equity shares allotted to Mr. Rao?In case these shares are sold subsequently, what would be their cost of acquisition in the hands of Mr. Rao? 6(c) Determine the eligibility and quantum ofdeduction under chapter vI-A in the following cases:(i) Subscription to notified long-term infrastructure bonds Rs. 30,000 paid by Mr. A who had also paid lifeinsurance premium of Rs. 70,000 during the year(ii) Contribution to notfied pension scheme (referred to section 80 CCD) by the employer Rs. 40,000 for anemployee whose basic salary plus dearness allowance was Rs. 3,00,000 for the year. 4

4. (a) Mr. Gopi carrying on business as-proprietor converted the same into a limited cpmpany by name Gopi pipes (p)Ltd. from 01.07.2011. The details ofthe assets are,given below:

(3) I-P7(ADT)Syllabus 2008

WDV of plant & machinery (rate of depreciation @15%)WDV of building (rate of depreciation @10%)

The company Gopi Pipes (P) Ltd. acquired plant and machinery in December 201 I for Rs. 10,00,000. It has beendoing the business from 01.07.2011.

Block - IBlock - IIRs. 12,00,000Rs.25,00,000

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rpirebD ( 4 )Syllabus 2008Compute the quanturr of depreciation to be claimed by Mr. Gopi and successor Gopi Pipes (P) Ltd. for theassessment year 2012- lJ.Note:-lgnore additional depreciation. 5

(b) Name any four specified businesses covered under section 35AD and state the fiscal incentives available tosuch businesses. 5(c) Mr Ashwin started a proprietary business on 20.04.2012 with a capital ofRs. 5,50,000. His wife Smt. Padmagifted Rs. 2,00,000 on the occasion ofhis birthday on 28.07.2010, out of which he introduced Rs. 1,00,000into his proprietary business.Details ofhis income from business are given below:Financialyear (Loss) [ncome

2010-l I Rs. (1,50,000)201l-12 Rs. 4,00,000He did not withdraw any amount from the business for his personal use.Determine the amount chargeable to tax in the hands ofAshwin and the amount liable for clubbing in the hands ofhis wife Smt. Padma. 5

5. (a) State with brief reason whether the following are 'assets' as on 31.03.2012 under the Wealth Tax Act: 86 A commercial complex let out after completion of construction from 0l.0l.20l2'(ii) A vacant land acquired in March 2008 by a company meant for construction of factory building^(iii) Residential complex building owned and let out by a company for 270 days during the year(iv) Accommodation to an employee having aggregate annual salary of Rs. 4,50,000, let out by a company., (t) Vacant lands owned by a real estate company for the past 7 years.(vi) A farm house beyond 30 kms from corporation limits by an individual.(vii) A guest house located 30 kms beyond the city limits owned by a company.lvitr; Equity shares in a company owned by assessee-company.(b) b,retly discuss the provisions of section 142(2A,) ofthe Income-tax Act, 196l relating to special audit. 4(c) State the difference btween Exemption u/s l0 and Deduction under Chapter VIA ofthe Income-tax Act, 1961.

36 tN Mr. Nitin completed construction ofa residential house on 01.04.2010.

)neresf paid on loans borrowed for the purpose ofconsturction during the 30 months prior to completion wasRs.60,000.The house was let-out on a monthly rent of Rs. 18,000.Annual corporation tax paid is Rs. 35,000.Interest paid during the year is Rs. 25,000.Amount spent on repairs is Rs. 6,000.Fire insurance premium paid Rs. 3,000 p.a.The properfy was vacant for 4 months.

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7.

(5) r-P7(ADT)Sltllabus 2008Annual letting value as per corporation records is Rs. 1,50,000.He had also received arears ofrent ofRs. 36,000 during the year, which had not been not charged to tax in theearlier yearCompute the income under the head "lncome from House Property" for the assessment year 2012-13. 8(b/ Dscuss whether it is required on the part ofan assessee desiring to claim deduction ofbad debt written off, top\ove that the debt written offin the books as irrecoverable or bad debt, is incapable ofrecovery or that the saiddeb[had really tumed bad. 4(c) \Iirlain how jewellery has to be valued as per Wealth Tax Act. 3

(ai 'A' Ltd. owns two plant: Plant X and Plant Y, as on April l, 201 I (rate ofdepreciation: l5o4 depreciated value on01.04.2011: Rs. 2,37,000). 5The company purchases Plant Z on May 31, 2011 for Rs. 20,000.It sells Plant X (on April 10, 2011) and Plant Y (on December 11, 201 l) and Plant Z (on March 1,2012) forRs. 40,000; Rs. 36,000 and Rs. 24,000 respectively.Find out the WDV ofthe block ofassets on 3l .03.2012. Explain the treatment relating to depreciation and alliedissues relating to the above. What is the opening WDV of the block as on01.04.2012?(b) State the provisions for valuation of self-occupied property under section 7(2) of the Wealth Tax Act. 5(c) State ten instances/transactions where Permanent Account Number (PAN) has to be compulsorily quoted. 5

(a) Please state the deductibility ofthe following expenses: 6(i) Litigation expenses for restraining another company from using assessee's trade mark.(ii) Brokerage paid for raising loan to finance assessee-company's business.(iii) Compensation paid to cancel purchase order of a machine due to abnormal rise in its price. Assesseeclaims it as a trading loss.(b) Erplain the provisions for carry forward and set offofbusiness losses under section 72. Explain the order ofpriority amongst business loss, current depreciation and brought forward unabsorbed depreciation. 6(c) Explain the provisions in regard to a reference to Valuation Officer for valuation of a capital asset under theprovisos of the Income-tax Act, 1961.

8.

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