Acharya Nagarjuna University (ANU) 2005 M.Com Commerce Income Tax - Question Paper

8. From the profit and loss a/c of Mr. Diwakar for the year ending March 31, 2004 calculate his income under the head "Profits and Gains of Business or Profession''.

Rs. Rs.
General expenses 13,000 Gross profit 8,500
Bad debts 22,000 Commission 3,15,000
Advance tax 20,000 Brokerage 37,000
Insurance 1,000 Bad debts recovered 13,500
(allowed earlier)
Salary to staff 20,000 Interest on Debentures 38,000
Salary to Mr.Diwakar 38,000
Interest 46,000
Interest on capital 20,000
Depreciation 40,000
Advertisement 18,000
Contribution to Employee's
Recognized Provident Fund 12,000
Net Profit 1,62,000

4,12,000 4,12,000

Additional info :
(a) The amount of allowable depreciation is Rs. 35,000. It also includes depreciation on permanent signboard.
(b) Advertisement expenses include Rs. 10,000 being the cost of permanent signboard.
(c) General expenses include Rs. 5,000 spent on his daughter's birthday party
(d) Interest includes Rs. 2,000 paid on a loan taken for his personal purpose.

part C - (2 X 20 = 40 marks)
ans any 2 of the subsequent.

9. Smt. Sashikala is a radio playback singer and particulars of her receipts and expenditure are provided beneath. You are needed to calculate her total income for the Assessment year 2004 - 05 :

Receipts Rs. Payments Rs.
Radio programmes 8,950 Telephone and Telegrams 5,000
Film Corporation 10,540 Typist and clerk 12,000
From other products 50,250 Attendants 12,000
Rent received 8,000 Private secretary 12,000
Interes received (gross) on Tour (abroad) expenses 50,000
investments 7,800 Car expenses 18,460
UTI interest received 2,000 Municipal taxes (Let - out house) 800
Special programmes 3,000 Municipal taxes (Self - occupied) 1,000
Programmes in London and Surplus 79,280
New York 1,00,000

1,90,540 1,90,540

It was obtained that 1 - 4th of the car expenses pertain to private use thereof. The attendants are also working in the house performing duties not related to profession. According to FERA provisions, she brought the entire income from foreign sources to India.

10. obtain out the income from property chargeable to tax of GSR for the assessment year 2004- 05 in the subsequent cases :

House X House Y
Rs. Rs.

Muncicipal value (a) 1,20,000 1,20,000
Fair rent (b) 1,30,000 1,30,000
Standard rent under the Rent Control Act (c) 1,10,000 1,10,000
true rent if property is let out throughout the previous year (d1) 1,26,000 1,26,000
Unrealised rent of the previous year 2002 - 03 (d2) 10,500 Nil
Period when the property remains vacant (in number of month) (1) (Nil)
Loss due to vacancy (d3) 10,500 Nil
Municipal Taxes :
Tax of the year 2003 - 04 18,000 18,000

- paid during 2003 - 04 17,000 8,000
- paid after March 31, 2004 1,000 1,000
- paid by tenants during 2003 -04 - 9,000


11. Shri Enterprises owned by Krishna has prepared the subsequent statement for the year
ended on 31.3.2004 :

Profit and Loss Account
Rs. Rs.
To Salary to proprietor 12,000 By Gross profit b/d 50,000
To Office staff salary 15,000 By Bad debts recovered 5,00
To General expenses 5,000 By Interest on Govt. Securities 3,500
To Interest on capital 2,000 By Interest on Bank deposits 18,500
To Bad debts 1,000 By Interest on Public Provident fund 2,000
To Advertisement 2,700 By Interest on Post Office Deposit
To Fire insurance 1,000 (10 years) 3,000
To Depreciation 4,000
To Provision for bad debts 2,000
To Income - tax 2003 - 04 3,000
To Advance Income - tax 2,000
To Donation to PM's drought
Relief fund 2,000
To Car expenses 1,000
To Net profit 29,300

82,000 82,000

Additional info :
(a) Depreciation allowed as per I.T. Act is Rs. 3,600 only
(b) General expenses include Rs. 500 spent on printing calendars and diaries
(c) Advertisement includes cost of New Sign Board Rs. 1,400
(d) Of the debts recoverd, the A.O. has disallowed Rs. 3,000 only in the concerned assessment year
(e) Car is used for business as well as for private purpose equally.

calculate his total income for the assessment year 2004 - 05.


12. discuss the rules relating to carry forward of losses.

Earning:   Approval pending.