DU SOL Question Paper 2018 B.Com (Hons.) Income Tax Law and Practice

[This question paper contains 16 printed pages.]

600 Your Roll l'/o........

B.Com. (Hons.) / II G

Paper Code: B-106

Paper XIII - INCOME TAX LAW AND PRACTICE

Time: 3 Hours Maximum Marks : 75

(Write your Roll No. on the top immediately
on receipt of this question paper.)

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Note :- .Answers may be written either in English or in Hindi; but
the same medium should be used throughout the paper.

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All questions carry equal marks.
Each question has an internal choice.

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P.T.O.

600

1. Explain the provisions related to tax treatment of the
following:

(a) Accommodation provided by the employer (10)

(b) Transport allowance and conveyance allowance (5)

OR

Explain the provisions related to tax treatment of the
following:

(a) Perquisite in respect of medical facility (10)

(b) House rent allowance (5)

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600 3

2. (a) Explain the provisions related to set off and carry forward
of business losses. (10)

(b) Name any five transactions which are not treated as
'transfer' for the purpose of capital gains. (5)

OR

(a) Explain any two cases where income of others is included
in the total income of an assessee. ( 10)

(b) Briefly explain how the judgement delivered by Hon'
Supreme Court in CIT vs. Raja Benoy Kumar Sahas
Roy's case is a landmark judgement in the realm of
agricultural income. (s)

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600 4

3. (a) How do you calculate annual
value of house property ?
( l0)
(b) Name any five specific
incomes which are taxable
under
the head "Income from other
sources ' ())
OR

Mr. X is 100% visually impaired person.
He is a working
as a manager in a private
company at Delhi. He has furnished
the following details of his income
for the year ended 3lst
March, 2016:

(i) Basic Salary Rs. 70,000 p.m.
(ii) Dearness Allowance Rs. 12,000 p.m.
(60%forms part
of salary for retirement purpose).

(iii) Entertainmenr Allowance Rs. 2,500
p.m.

(iv) Transport Allowance Rs. 2,000
p.m. (expenditure
incurred on commuting the
distance between office
and residence is Rs. 500
onlv).

(v) Company paid professional tax
of Rs. 1,500 on his
behalf.

(vi) Company contributed Rs. 10,000
towards his RpF
account to which he made
a matching contribution.

600 f

(vii) His employer provided him an interest free personal
- loan of Rs. 18,000'
(viii) Employer company provided him with an
accommodation free of rent for which the company
paid rent of Rs. 12,000 P'm'

(ix) Rs. 58,000 was credited to the aforesaid account during
2015-16 @ 13% per annum by way of interest'

(x) Received Rs. 30'000 as share of profit from a
partnershiP firm.

(xi) He paid LIC premium on the life of his married
daughter Rs. 15,000 (sum assured: Rs' 2'00'000)'

(xii) Donation to Prime Minister's National Relief Fund
Rs. 20,000.

Compute the total income and tax liability
of X for the
(15)
assessment yeat 2016-17.

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PQR &
and loss account of M/S
4. The following is the profit
as such (PFAS) for the
Co., a partnership firm assessed
ye ar ended 31.03 '2016
Amount
Amount Particulars
Particulars (Rs')
(Rs.)
20,00,000
6,71,500
Cost of goods sold
Long term caPital
Interest on caPital to 5 5 ,000
gains (comPuted)
partners @ 20%:
43,000
P
70,000
a
6,000
R
Other business
Remuneration to Pafiners: 90,000
1,02,000 receiPts
P
60,000
a
72,000
R 10.000
qolqnr tn staff 6,00,000 Short term caPltal galns
5 5,000
ncome tax
1,40,000
Depreciation
? s0 000
Other exPenses
8 5,500
Net oroflt 21,55.000
21,55,000

P.T.o.

600 8

Other relevant information :

(a) Salary and interest are paid to partners as per partnership
deed.

(b) Depreciation admissible under section 32 is Rs. r.10.000.

(c) On November 15, 2015 firm paid Rs.30,000, being
sales tax liability pertaining to the previous year 2011_
12.

(d) Both opening and closing stock amounting to Rs. 60,000
and Rs. 80,000 respectively are undervalued by 20%.

(e) Included in salary to staff a sum of Rs. 1,50,000 paid
as salary to P's son who is a management degree holder
and was serving another partnership firm for Rs. 90,000
p.a.

(f) Other incomes and investments of p, e and R for the
previous year 2015-16 are as follows :

P (Rs.) Q (Rs.) R (Rs.)
Interest on bank deposit 3,00,000 3,50.000 5,00,000
Dividend from Indian companies 1,00,000 87,000 1,27 ,000
Dividend from Foreign companies 40,000 60,000 1,75,000
Contribution to PPF 20,000 50,000 1,40,000
Fixed Deposits (eligible for tax savings) 10,000 15,000 20,000

Find out the net income and tax liability of the firm and
partners or the assessment year 2016_17. (15)

600 9

OR

Mr. Rahul purchased a house on 01-0'7-1976 for
Rs. 1,00,000. He had to pay Rs.2,000 as brokerage to
real estate agent and Rs. 8,000 as registration charges.
He entered into an agreement for sale of property to X
on 10-10-1983 and received Rs. 30,000 as advance. X,
could not, however, keep his promise and advance of
Rs. 30,000 given by him was forfeited by Mr. Rahul.
Later on, Rahul gifted this house to his son Sunil on
l5-09-1985. The following expenses were incurred by
Rahul and Sunil for the renewal of house :

- Addition of two rooms by Rahul during 1979-80 Rs.80,000
- Addition of first floor by Rahul during 1984-85 Rs. 1,10,000
- Addition of second floorby Sunil during 1990-91 Rs. 1,50,000
- Fair market value of house on 01-04-1981 was Rs. 1,35,000
Sunil entered into an agreement to sell the house for
Rs.8.00.000 to Y on 10-05-1993 after receiving an
advance of Rs. 60,000. Y could not pay the balance
within the stipulated time of three months and Sunil
forfeited the advance of Rs. 60,000 as per the agreement
with Y. Sunil ultimately found a buyer Z to whom
property was transferred for Rs.50,00,000 on
I7-02-2016. K had to pay brokerage @ l% for arranging
this deal.

P.T.O.

600
10

Compute the capital gain
chargeable to tax in the
hands
of Mr. Sunil for the assessment
year 2016_17.
The CII for lggt_g2: 100,
t9g4_g 5: 125,19g5_g6:
133,
1990-91: 1g2 and 2015_16
is tOgl. Can Mr. Sunil get
an exemption of tax on
capital gain income under
54 and 54EC ? If yes, how ?
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(15)
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600 11

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year
incomes during the previous
5. (a) X earns the foitowing June. t3'
born in Bangladesh on
2015-16' After being
-Gt'*uny
in the year 1974' Since
lg4z,he settled i"
for 102 days every year'
then, he is visiting India
income' patticulars of
which are
Compute his taxabie relevant
previous year 2015-16
furnished below' for the
to assessment Year 2016-11
:

il-n-"r*nc"rmanDeveloPmentBonds' 1,10,000
in India
50% of interest is received
;*td.ttd from an American ComPan'v
received in GermanY
shares of an Indian
Capital gains on sale of
not paid
i""tn"tt received in India' STT

frorn business
ilofrr--ofr,
in Mumbai
received in GermanY
in India)
I"*rn-.-fu- ptftssion (set up
there
in GermanY received
t"ceived in India from
a
ffiir,
friend on his birthdaY
(10)
P.T.o.

600 l4
(b) Discuss the provisions of section 43B regarding certain
expenditure allowed on actual payment basis only.
(s)

OR

(a) Mrs. X (age 50 years) owns two houses. The details of
the two houses are as follows :

Particulars I (Rs.) II (Rs.)
Municioal valuation 3,00,000 2,00,000

Fair rent 3,20,000 2,20,000

Standard rent 2,80,000 2,30,000

Annual rent Self-occupied 2,07,600

Vacancy period 2 months

Municipal taxes paid (2015-16) 30,000 30,000

Half of the municipal taxes in respect of house II
have been paid by the tenant. During the previous year
2015-16, Mrs. X was employed in X Ltd. at a monthly
salary of Rs, 60,000. Company paid Rs' 2,000 as
professional tax on her behalf.

Compute the total income and tax liability of Mrs. X for
the assessment year 2016-17 assuming that she has LTCG
of Rs. 3.00.000. (10)

600 15

under
(b) E,xplain briefly the provisions related to deduction
premium'
section 80D in respect of medical insurance
(5)

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(8000)