DU SOL B.Com Question Paper 2nd Year 2018 Income Tax and Auditing

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This quesliott paper conlains 10 printetl
Your Roll No " '
1268
B.Com. / II G-l

PnPnnCone: B-104

PaPer IX- INCOME TAX AND AUDITING
Pnnr A- Income Tax
Paxr B- Auditing

Time: 3 hours Maximum Marks: 75

(WriteyourRollNa.onthetopimmediatelyonreceiptofthisquestionpaper)

NorB:- Answers may be written either in English or
in
Hindi; but the s'ame medium should be used
throughout the PaPer'
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[Jse separate answer-sheets for Parts A
and B'

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Pan',r'A (Income Tax)
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Attemltt all the questions"
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are True or
1. Indicate whether thc iollowing statements
False: P. T. O.

1268

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(u) A taxpayer is an assessee but an assessee nced not
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(b) Maximum exemption available u/'s 80U is Rs.
100,000 to a person with severe disabilitv.
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(c) Interest on capital borrowed for construction/
purchase of the house may be allowed on due
basis.
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(d) Loss from house property cannot be adjusted with
income from Salary.
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(e) Income of previous year is always taxable in the
immediately following assessment year.
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2. The following particulars relate to the income of Sri
M. Mehta for the previous year 2015-1,6:
He is employed in a cotton textile mill at Bangalore on
a monthly salary of Rs. 25,000 p.m. He is also entitled

1268

by him' The
to commission @ lVo ofthe sales achieved
sales achieved by him during the
previous year is Rs'
allowances and
40,00,000. He received the following
perquisites during the previous year:

(a) Dearness allowance @ Rs' 6,000 p'm' (forming
part of the retirement salarY)'
(b) Bonus @ 2 months basic salary
(c) Entertainment allowance @ Rs' 2'000 p'm'
(d) House rent allowance @ Rs' 5'000 p'm'
(e) The employer paid Rs' 11,000 towards the income
tax liabilitY of Sri M' Mehta'
(0 The employer provided him LTC of Rs' 35'000 for
Rs'
going to Shimla with family' Mr' Mehta spent
45,000 on the triP'
(g) He is also provided with gas, electricity and water
facility and employer spent Rs' 15'000 on these
facilities-
(h) He and his employer both contribute 75Vo of his
salary to his recognised provident fund and
interestcreditedtothisfund@gToamountedto
Rs. 30,000 during the previous year'
(i) He spent Rs. 6,000 p'm' as rent of the house in
Bangalore-
(j) He is given children education allowance of Rs' 70
p.m. pet,child for his four children'
(k) He contributes Rs' 10,000 as premium on medical
insurance policy taken for his father'
(l) He also repaid Rs' 50,000 of principal compo-
nent of housing loan' p. T. O.

4
t268
tax liability for the
Compute his taxable income and
assessment Year 2016-17 '
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6lp (WreIT)
(a) Discuss tax treatment of Provident Fund in detail'
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(b) Mr. A, resident in India, aged 68 years' earned
agriculture income of Rs- 3,t10,000 during the
previous year 2015-16. Compute his tax liatrility
assuming that he has non-agriculture income of
Rs.5.90,000.
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3. (a) From the following information, compute income
from house property, construction of which was
completed ont.4-2013:
Municipal value of the house Rs. 1,60,000
Municipal taxes paid Rs. 16,000
P. T. O.

Insurance premium Rs. 2,000
Ground rent Rs. 1,000
The house is divided into two identical units. One
of the units is self occupied and the other unit is
let out on a monthly rent of Rs. 7,500.

A loan of Rs. 3,00,000 was taken from LIC on
t.4.2011, @ IZVa p.a. for the construction of' this
house. Rs. 1,00,000 was refunded on 1.10.2015"
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(b) List out five incomes which are always taxable
under the head "Income from house property".
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1268

Canada for
(a) Mr. Ramesh' a citizen of India went to
business purpose on 1'1'2011'
He was never out of
years
India in the past' During the previous
- 15 he has been in
20'1j -12, 2012- i3, 2013 -1 4, 2014
to
India for 100 days every year' He relurned
his
India to settle here on l'1'2016' Determine
residentialstatusfortheassessmentyeat20T6-|7.
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(b) Explain the clubbing provision whereby
an

inJividual is assessable in respect 6f
the income
earned bY the sPouse'
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(u) Mr. Shivpal provicles the following data for
A
the
-. previous year
sale of his residential house for the
2A$-1'6: Rs.

House Purchased in 1984-85
6'50'000
Sold in November 2016
90'00'000

Construction of the I floor in 1992-93
3'50'000

Construction of the II floor in 2005-06
5'00'000

P. T. O.

r268 8

Purchased another house in Sep. 2016 6,00,000
Deposited in capital gain account
scheme in January 2077 2,00,000

Compute the amount of taxable capital gain of
Mr" Shivpal for the assessment year 201,6-17.

The CII for the financial years are: 1984-85: 125;
1992-93: 223; 2005-06: 497 and 2015-16: 1 081.
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2005-06 t katq dcr rR frrrfTr 5,00,000

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(b) Briefly explain deduction u/s 808 in respect of
interest on loan taken for hieher education.
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Or (srerEr)
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(a) Setoff and carry forward of capital losses
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(b) Explain deduction u/s 80U in respect of income of
a person with disabilitY

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(c) Define the term capital asset as per Section 2(14)
of the Income Tax Act, 1961.
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Panr B (Auditing)
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AttemPt all questions'
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5. "Accounting is a necessity to business but auditing is a
luxury." Comment on the staternent.
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6. What is meant by internal check system'? Suggest a
suitable system of internal check for wage payments'
P. T. O.

10

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or (sTer€{r)
What do you mean by continuous audit? Distinguish
between continuous audit and annual audit.

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7. Describe the provisions of Companies Act, 2013 with
regard to rights and duties of company auditor-
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Or(qgr{r)
Write short notes on any two rtf. the following:

(a) Disqualifications of auditor
(b) Qualified audit report
(c) Audit working papers.
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