Institute of Chartered Financial Analysts of India (ICFAI) University 2008 C.A Accounts -PCC--08_ – 5 TAXATION.doc - Question Paper

PAPER – 5: TAXATION

ans all ques.

ques. 1

State with reasons, for any 5 out of the subsequent 6 sub-divisions, whether the subsequent
statements are actual or false having regard to the provisions of the Income-tax Act, 1961 for the
Assessment Year 2008-09:
(a) Compensation on account of disaster received from a local authority by an individual or
his/her legal heir is taxable.
(b) Filing of belated return under part 139(4) of the Income-tax Act, 1961 will debar an
assessee from claiming deduction under parts 80-lD or 80-IE of the Act.
(c) Rural branches of the co-operative banks are not allowed to claim provision for bad and
doubtful debts.
(d) Income deemed to accrue or arise in India to a non-resident by way of interest, royalty
and fee for tech. services is taxable in India irrespective of territorial nexus.
(e) Depreciation is allowed only when it is claimed.
(f) Capital gain of Rs.75 lakh arising from transfer of long term capital assets will be exempt
from tax if such capital gain is invested in the bonds redeemable after 3 years, issued
by NHAI under part 54EC of the Act. (5 x two =10 Marks)


ques. 2

Dr. Smt. Niranjana, a resident individual, aged 60 years is running a clinic. Her Income and
Expenditure Account for the year ending March 31st, 2008 is as under:
Expenditure Amount
(Rs.)
Income Amount
(Rs.)
To Medicine consumed 5,38,400 By Consultation and Medical
charges
18,85,850
To Staff salary 3,80,000 By Income-tax refund (Principal
Rs.5,000, interest Rs.450)
5,450
To Clinic consumables 1,10,000 By Dividend from units of UTI 10,500
To Rent paid 90,000 By winning from game show on
T.V. net of TDS (TDS Rs.
16,830)
33,170
To Administrative expenses 2,55,000 By Rent 27,000
To Amount paid to scientific
research association approved
under part 35
1,50,000
To Net profit 4,38,570
19,61,970 19,61,970
(i) Rent paid includes Rs.30,000 paid by cheque towards rent for her residential house.
(ii) Clinic equipments are:
1. 4. 2007 Opening W.D.V. - Rs.5,00,000
7. 12. 2007 Acquired (cost) - Rs.2,00,000
(iii) Rent received relates to property situated at Surat. Gross Annual Value Rs.27,000. The
municipal tax of Rs.2,000, paid in December, 2007, has been included in "administrative
expenses".
(iv) She received salary of Rs.7,500 p.m. from "Full Cure Hospital" which has not been
included in the "consultation and medical charges".
(v) Dr. Niranjana availed a loan of Rs.5,50,000 from a bank for higher education of her
daughter. She repaid principal of Rs.1,00,000, and interest thereon Rs.55,000 during the
year 2007-08.

Earning:   Approval pending.