Osmania University (OU) 2008 B.Com Computer Science INCOME TAX - Question Paper

To Sale of medicines 8,000 By Telephone expenses 4,000
By balance c/d 1,48,000
3,88,000 3, 88,000

Other information:

i. Allowable depreciation on all assets Rs. 18,000
ii. Gifts include Rs. 12,000 received from parents
iii. Traveling expenses include Rs. 8,000 relating to pilgrimage trip to Tirupathi
iv. Stock medicines as on 31.3.2007 Rs. 18,000

b. calculate income from business for the assessment year 2007-08:

Profit & Loss A/c for the year ended 31-3-2007

Particulars Rs. Particulars Rs.

To Salaries 40,000 By Gross profit 4,40,000
To Bad debts 10,000 By By rent from house property 60,000
To General expenses 60,000 By rent from open plots 40,000
To Provision for bad debts 6,000 By rent from staff quarters 20,000
To Fire insurance 8,000 By bad debts recovered 20,000
To Advertisement 6,000
To Interest on capital 8,000
To Interest on loan 30,000
To Depreciation 40,000
To Provision for sales tax 20,000
To Provision for Income tax 18,000
To Gratuity 12,000
To Net profit 3,22,000

5,80,000 5,80,000

Additional information:

i. Allowable depreciation on all assets Rs. 60,000
ii. Sales tax truly paid Rs. 26,000
iii. Actual bad debts written off Rs. 8,000
iv. Income tax truly paid Ra. 40,000
v. Bad debts recovered were disallowed earlier
vi. Advertisement expenses were paid in cash.

12. a. From the info provided beneath calculate taxable capital gains for the assessment year 2007-08:

Assets Date of Cost of Date of Transfer Transfer
acquisition acquisition transfer consideration expenses

Residential house 1.1.1979 Rs. 1,00,000 31.12.2006 14,10,000 10,000
(CII=100) (FMV. Rs. 1,50,000)

Urban agricultural 30.6.1992 Rs. 1,80,000 1.02.2007 12,40,000 40,000
lands (CII=223)

Gold and Jewelery 1.7.1988 Rs. 2,40,000 1.09.2006 22,00,000 10%
(CII=161)

Note: From the transfer consideration of every asset half the amount is re-invested in the identical asset.

b. Mr. ‘X’ Furnishes the subsequent info. calculate income from other sources:

i. Interest on Govt. Securities Rs. 16,800 (Net)
ii. Interest on Debentures of ‘X’ Ltd. Rs. 8,920 (Net) (listed)
iii. Interest on Debentures of ‘Y’ Ltd. Rs. 7,960 (Net) (un-listed)
iv. Lottery winnings Rs. 60,000 (gross)
v. Agency commission Rs. 40,000
vi. Race horse winnings Rs. 12,000 (Maintenance expenses Rs. 20,000)
vii. Royalty on publication of books Rs. 48,000 (Expenses on the preparation of manuscript Rs. 8,000)
viii. Interest on loan taken to purchase Govt. Securities Rs. 1,800.

13. a. explain the legal provisions relating to set off and carry forward of losses under IT act, 1961.

b. calculate tax liability of Mr.Venkat aged 48 years:

i. Salary received Rs. 1,20,000
ii. Income from business Rs. 3,60,000
iii. Un-absorbed depreciation Rs. 60,000 (2005-06)
iv. Brought forward business losses (2005-06) Rs. 1,80,000
v. Brought forward long-term capital losses Rs. 20,000 (2005-05)
vi. House property income Rs. 80,000
vii. Life insurance premium paid Rs. 60,000
viii. House construction loan repaid Rs. 40,000
ix. Deposited in Public provident fund Rs. 18,000
x. Mediclaim insurance premium paid Rs. 14,000.

Earning:   Approval pending.