NATIONAL MANGEMENT COLLEGE – THUDUPATHY
MODEL EXAMINIATION – 1
COURSE : CA INTERMEDIATE (2022-23)/GROUP 1
SUB: TAXATION MARKS:100 MARKS TIME : 3 HOURS/7/9/2023
ANSWER THE FOLLOWING QUESTIONS.
Multiple Choice Questions (Q.No 1 to 20 carries 1 mark,21 to 25 carries 2 marks)
- For A.Y.2023-34, Mr.Hari, a resident Indian, earns income of Rs 10 lakhs from sale of rubber manufactured from latex obtained from rubber plants grown by him in India and Rs. 15 lakhs from sale of rubber manufactured from latex obtained from rubber manufactured from latex obtained from rubber plants grown by him in Malaysia. What would be his business income chargeable to tax in India, assuming he has no other business?
(a) Rs 3,50,000 (b) Rs 4,00,000 (c) Rs 8,75,000 (d) Rs 18,50,000
- The Gupta HUF in Maharashtra comprises of Mr. Harsh Gupta, his wife Mrs. Nidhi Gupta, his son Mr. Deepak Gupta, his daughter-in-law Mrs. Deepti Gupta, his daughter Miss Preeti Gupta and his unmarried brother Mr. Gautam Gupta. Which of the members of the HUF are eligible for coparcenary rights? (a) Only Mr. Harsh Gupta, Mr. Gautam Gupta and Mr. Deepak Gupta (b) Only MR.Harsh Gupta, Mr. Gautam Gupta, Mr. Deepak Gupta and Miss Preethi Gupta (c) Only Mr. Harsh Gupta, Mr. Gautam Gupta, Mr.Deepak Gupta, Mrs. Nidhi Gupta and Mrs. Deepti Gupta (d) All the Members are co-parceners
- Aashish earns the following income during the P.Y.2022-23:
- Interest on U.K. Development Bonds ( 1/4thbeing received in India): Rs 4,00,000
- Capital gain on sale of a building located in India but received in Holland: Rs 6,00,000
If Aashish is a resident but not ordinarily resident in India, then what will be amount of income chargeable to tax in India for A.Y.2023-24 ?
(a) Rs 7,00,000 (b) 10,00,000 (c) 6,00,000 (d) 1,00,000
- Who among the following will qualify as non-resident for the P.Y. 2O22-23?
-Mr.Bob, an Italian dancer, came on visit to India to explore Indian dance on 15.09.2022 and left on 25.12.2022 For past four years, he visited India for dance competition and stayed in India for 120 days each year.
-Mr. Samrt born and settled in USA, Visits India each year for 100 days to meet his parents and grandparents, born in India in 1946, living in Delhi. His Indian income is Rs 15,20,000.
-Mr.Joseph, an America scientist, left India to his home country for fixed employment there. He stayed in India for study and research in medicines from 01.01.2017 till 01.07.2022.
Choose the correct answer
(a) Mr. Bob and Mr.Joseph (b) Mr. Samrat (c) Mr.Bob,Mr.Samrat and Mr.Joseph (d) None of the above
- Mr.Ramesh, acitizen of India, is employed in the Indian embassy in Australia. He is a non-resident for A.Y..2023-24. He received salary and allowances in Australia from the Government of India for the year ended 31.03.2023 for services rendered by him in Asutralia. In addition, he was allowed perquisites by the Government. Which of the following statements are correct?
(a) Salary, allowances and perquisites received outside India are not taxable in the hands of Mr. Ramesh, since he is non-resident (b) Salary, allowances and perquisites received outside India by since they are deemed to accrue or arise in India. (c) Salary received by Mr. Ramesh is taxable in India but allowances and perquisites are exempt. (d) Salary received by Mr. Ramesh is exempt in India but allowances and perquisites are taxable.
- Mr. Jagat is an employee in accounts department of Bharat Ltd. A cellular company operating in the regions of eastern India. It is engaged in manufacturing of cellular devices. During F.Y. 2022-23, following transactions were undertaken by Mr. Jagat:
(i) He attended a seminar on “ Perquisite Valuation” Seminar fees of Rs 12,500 was paid by Bharat Ltd. (ii) Tuition fees of Mr.Himanshu (son of Mr. Jagat) paid to private coaching classes not having any tie-up with Bharat Ltd.) was reimbursed by Bharat Ltd. Amount of fees was Rs 25,000. (iii) Ms.Sapana (daughter of Mr.Jagant) studies in DPS Public School (owened and maintained by Bharat Ltd.). Tuitio fees paid for Ms. Sapna was Rs 750 per month by Mr. Jagat. Cost of education in similar institution is Rs 5,250 per month . What shall be the amount which is chargeable to tax under the head “Salaries” in hands of Mr. Jagat for A.Y. 2023-24?
(a) Rs 25,000 (b) Rs 37,500 (c) Rs 66,500 (d) 79,000
- XYZ Pvt. Ltd., provides a car (below 1.6 ltr cc) along with a driver to Mr. Sanjay, employee of XYZ Pvt. Ltd., partly for official and partly for personal purpose. The expenses incurred by the company are. Running and maintenance expenses – Rs 32,000
(a) Rs 21,600 (b) Rs 10,800 (c) 32,400 (d) 39,600
- Vidya received Rs 90,000 in May,2022 towards recovery of unrealized rent, which was deducated from actual rent during the P.Y. 2020-21 for determining annual value. Legal expense incurred in relation to unrealized rent is Rs 20,000. The amount taxable under section 25A for A.Y. 2023-24 would be-
(a) Rs 70,000 (b) Rs 63,000 (c) Rs 90,000 (d) 49,000
- Mr X acquires an asset in the year2016-17 for the use for scientific research for Rs 2,75,000. He claimed deduction under section 35 (1) (iv) in the previous year 2016-17. The asset was brought into use for the business of Mr. X in the P.Y.2022-23, after the research was completed. The actual cost of the asset to be included in the block of assets is-
(a) Nil
(b) Market value of the asset on the date of transfer to business
(c) Rs 2,75,000 less notional depreciation under section 32 upto the date of transfer. (d) Actual cost of the asset i.e., Rs 2,75,000
- Mr. Shahid, a wholesale supplier of dyes, provides you with the details of the following cash payments made throughout the year-
12.06.2022: loan repayment of Rs 27,000 taken for business purpose from his friend Kunal. The repayment also includes interest of Rs 5,000.
19.08.2022: Portable dye machinery purchased for Rs 15,000. The payment was made in cash in three weekly instalments.
26.01.2023: Purchases made from unregistered dealer for Rs 13,500. What will be disallowance under 40A(3),if any,if Mr.Shahid opts to declare his income as per the provisions of section 44D?
(a) Rs18,500 (b) Rs 28,500 (c) Rs 13,500 (d) Nil
11.A building was acquired on 1.4.1995 for Rs 20,00,000 and sold for Rs 80,00,000 on 01.06.2022. The fair market value of the building on 1.4.2001 was Rs 25,00,000. It stamp duty value on the same date was Rs 22,00,000. Determine the capital gains on sale of such building for the A.Y. 2023-24?
CII for F.Y.2001-02: 100; F.Y.2023-24?
(a) Rs 7,18,000 (b)13,80,000 (c) Rs 60,00,000 (d) (Rs2,75,000)
- Mr. Vishal and Mr. Guha sold their residential house property in Pune for Rs 3 crore and Rs 4 crore, respectively, in January, 2023. The house property was puechased by them 25 monyhs back. The indexed cost of acquisition is Rs 1 crore and Rs 1.75 crore, respectively. Mr.Vishal purchased two residential flats, one in Delhi and one in Agra for Rs 70 lakhs and Rs 80 lakhs, respectively, in April,2023. On the same date, Mr Guha also purchased two residential flats, one in Mumbai and the other in Pune, for Rs 80 lakhs and Rs 75 lakhs respectively. Both of them invested Rs 30 lakhs in bonds of NHAI in March, 2023. And Rs 30 lakhs in bonds of RECL in April, 2023, What is the income taxable under the head “ Capital Gains” for A.Y.2023-24 in the hands of Mr. Vishal and Mr. Guha?
(a) Rs 70 lakhs and Rs 95 lakhs, respectively
(b) Rs 60 lakhs and Rs 85 lakhs, respectively
(c) Nil and Rs 95 lakhs, respectively
(d) Nil and Rs 20 lakhs, respectively
- Mr. X, aged 61 years, earned dividend of Rs 12,00,000 from ABC Ltd. In P.Y. 2022-23. Interest on loan taken for the purpose of investment in ABC Ltd., is Rs 3,00,000. Income includible in the hands of Mr. X for P.Y. 2022-23 would be-
(a) Rs 12,00,000 (b) Rs 9,60,000 (c) Rs 9,00,000 (d) Rs 2,00,000
14.Mr. Vikas received a gold ring worth Rs.60,000 on the occasion of his daughter’s wedding from his best frind Mr. Vishnu Mr.Vishnu also gifted a gold chai to Kaviya, daughter of Mr. Vikas, worth Rs 80,000 on the said occasion. Would such gifts be taxable in the hands of Mr. Vikas and Ms. Kavya?
(a) Yes, the gift of gold ring and gold chain is taxable in the hands of Mr. Vikas and Ms. Kavya, respectively (b) Such gifts are not taxable in the hands of Mr. Vikas nor in the hands of Ms.Kavys (c) Value of good ring is taxable in the hands of Mr.Vikas but value of gold chain is not taxable in the hands of Ms.Kavya
(d) Value of gold chain is taxable in the hands of Mr. Kavya but value of gold ring is not taxable in the hands of Mr. Vikas
- am owns 500, 15% debentures of R Industries Ltd. Of Rs 500 each. Annual interest of Rs 37,500 was payable on these debentures for P.Y. 2022-23. He transfers interest income to his friend Shyam, without transferring the ownership of these debentures. While filing return of income for A.Y. 2023-24, Shyam showed Rs 37,500 as his income from debentures. As tax advisor of Shyam, do you agree with the tax treatment done by Shyam in his return of income?
(a) Yes, since interest income was transferred to Shyam, therefore, after transfer, it becomes his income (b) No, since Ram has not transferred debentures to Shyam, interest income on the debentures is not taxable income of Shyam. It would be included in the hands of Ram.
(c) Yes, if debentures are not transferred, interest income on debentures can be declared by anyone, Ram or Shyam, as taxable income depending upon their discretion.
(d) No, since Shyam should have shown the income as interest income received from Mr. Ram and not as interest income earned on debentures.
- Mr. Arvind gifted a house property to his wife, Mrs.Meena and a flat to his daughter in law Mrs. Seetha. Both the properties were let out. Which of the following statements is correct?
(a) Income from both properties is to be included in the hand of Mr. Aravind by virtue of section 64.
(b) Income from property gifted to wife alone is to be included in Mr.Aravind’s hands by virtue of section 64. (c) Mr. Aravind is the demand owner of house property gifted to Mrs.Meena and Mrs.Seetha. (d) Mr. Aravind is the demand owner of property gifted to Mrs. Meena. Income from property gifted to Mrs. Seetha would be included in his hands by virtue of section 64
- Accounding to section 80, no loss which has not been determined in pursuance of return filed in accordance with the provisions of section 139(3), shall be carried forward. The exceptions to this are-
(a) Loss from specified business under section 73A
(b) Loss under the head ”Capital Gains” and unabsorbed depreciation carried forward under section 32(2) (c) Loss from house property and unabsorbed depreciation carried forward under section 32(2) (d) Loss from speculation business under section 73.
- The details of income /loss of Mr.Kumar for P.Y.2022-23 are as follows
| Particulars | ₹ Amt. (in ₹) |
| Income from salary (computed) | 5,20,000 |
| Loss from self –occupied house property | 95,000 |
| Loss from let-out house property | 2,25,000 |
| Loss from specified business u/s 35AD | 2,80,000 |
| Loss from medical business | 1,20,000 |
| Long term capital gain | 1,60,000 |
| Income from other sources | 80,000 |
What shall be the gross total income of Mr. Kumar for A.Y. 2023-24?
(a) Rs 4,40,000 (b) Rs 3,20,000 (c) Rs 1,60,000 (d) Rs 4,80,000
- XYZ Ltd. Has two units, one unit at Special Economic Zone (SEZ) and other unit at Domestic Tariff Area (DTA). The unit in SEZ was set up and stared manufacturing from 12.3.2014 and unit in DTA from 15.6.2017 . Total turnover of XYZ Ltd. And unit in DTA is Rs 8,50,00,000 and Rs 3,25,00,000, respectively. Export sales of unit in SEZ and DTA is Rs 2,50,00,000 and Rs 1,25,00,000, respectively and net profit of unit in SEZ and DTA is Rs 80,00,000 and Rs 45,00,000, respectively. XYZ Ltd. Would be eligible for deduction under section 10AA for P.Y. 2022-23 for-
(a) Rs 38,09,524 (b) Rs 19,04,762 (c) Rs 23,52,941 (d) Rs 11,76,471
- Mr. April, an employee of MNO Ltd. Has contributed Rs 1,61,280 towards NPS and similar amount is contributed by his employer, His basic salary is Rs 80,000 p.m. and dearness allowance is 40% of basic salary which forms part of retirement benefits. He also paid Rs 55,000 towards LIC premium for himself and his wife and medical insurance premium of Rs 35,000 by crossed cheque for his mother, being a senir citizen during he previous year 2022-23. How much deduction is available under Chapter VI-A while computing total income of Mr. April for the A.Y. 2023-24?
(a) Rs 3,46,260 (b) Rs 3,69,400 (c) Rs 3,19,400 (d) Rs 3,96,280
- Mr.Nihar maintains a savings A/c and a current A/c in Meera Bank Ltd. The details of withdrawals on various dates during the previous year 2022-23 are as follows:
| Date of cash withdrawal | Saving Account | Current Account |
| 05.04.2022 | 15,00,000 | – |
| 10.05.2022 | – | 22,00,000 |
| 25.06.2022 | 20.00.000 | – |
| 17.07.2022 | – | 5.00.000 |
| 28.10.2022 | 35,00,000 | – |
| 10.11.2022 | – | 38,00,000 |
| 12.12.2022 | 25,00,000 | – |
Mr. Nihar regulary files his return of income. Is Mera Bank Limited required to deduct tax at source on the withdrawals made by Mr. Nihar during the previous year 2022-23?
If yes, what would the amount of tax deducted at source?
(a) TDS of Rs 3.20,000 is required to be deducted
(b) TDS of Rs not required to be deducted as the cash withdrawal does not exceed Rs 1 crore neither in saving account nor in current account
(c) TDS of Rs 3,00,000 is required to be deducted
(d) TDS of Rs 1,20,000 is required to be deducted.
22.Mr.Jha, an employee of FX Ltd, attained 60 years of age on 15.05.2022. He is resident in India during F.Y.2022-23 and earned salary income of Rs 5 lakhs (computed). During the year, he earned Rs 7 lakhs from winning of lotteries. What shall be his advance tax liability for A.Y.2023-24, if all tax deductible at source has been duly deducted and remitted to the credit of Central Government on time? Assume that he does not opt to pay tax under section 115BAC.
(a) Rs 2,20,000 + Cess Rs 8,800 = Rs 2,28,800, being the tax payable on total income of Rs12 lakhs (b) Rs 2,10,000 + Cess Rs 8,400 = Rs 2,18,400, being the tax payable on lottery income of Rs 7 lakhs (c) Rs 10,000 + Cess Rs 8,800 = Rs 18,800, being the net tax payable on salary income, since tax would have been deducted at source from lottery income. (d) Nil
- Arun’s gross total income of P.Y.2022-23 is Rs 2,45,000. He deposits Rs 45,000 in PPF. He pays electricity bills aggregating to Rs 1.20 lakhs in the P.Y.2022-23. Which of the statements is correct?
(a) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since his total income before giving effect to deduction under section 80C does not exceed the basic exemption limit. (b) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since his electricity bills do not exceed Rs 2,00,000 for the P.Y. 2022-23. (c) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since neither his total income before giving effect to deduction under section 80C exceeds the basic exemption limit nor his electricity bills exceeds Rs 2 lakh for the P.Y. 2022-23. (d) Arun is required to file his return of income u/s 139(1) for P.Y. 2022-23, since his electricity bills exceed Rs 1 lakh for the P.Y.2022-23
- Mr. Ajay is a recently qualified doctor. He joined a reputed hospital in Delhi on 01.01.2023. He earned total income of Rs 3,40,000 till 31.03.2023. His employer advised him to claim rebate,u/s 87 while filing return of income for A.Y. 2023-24. He approached his father, a tax professional, to enquire regarding what is rebate u/s 87A of the Act. What would have his father told him.
(i) An individual who is resident in India and whose total income does not exceed Rs 5,00,000 is entitled to claim rebate under sction 87A. (ii) An individual who is resident in India and whose total income does not exceed Rs 3,50,000 is entitled to claim rebate under section 87A. (iii) Maximum rebate allowable under section 87A is Rs 5,000. (iv) Rebate under section 87A is available in the form of exemption from total income. (v) Maximum rebate allowable under section 87A is Rs 12,500. (vi) Rebate under section 87A is available in the for of deduction from basic tax liability.
Choose the correct option from the following:
(a) (ii),(iii),(vi)
(b) (i),(v),(vi)
(c) (ii),(iii),(iv)
(d) (i),(iv),(v)
25.Mr:Bandu, aged 37 years, provides the following details for P.Y. 2022-23:
| Particulars | ₹ in lakhs |
| Textile business income | 22 |
| Speculative business loss | (4) |
| Textile business loss b/f from P.Y.2019-20 | (5) |
| Business income of spouse included in the income of Mr.Bandu as per section 64(1)(iv) | 2 |
| Deductions available under chapter VI-A | 3 |
| TDS | 1 |
| TCS | 0.5 |
| Advance tax paid | 1.3 |
What shall be the net tax payable/(refundable) as per regular provisions of the Income-tax Act, 1961 for A.Y. 2023-24 for Mr. Bandu? Ignore interest.
(a) Rs 24,200 (b) (Rs 1,00,600) (c) Rs 2,11,400 (d) Rs 12,500
Descriptive questions:
- Mr. Kabir, a resident individual aged 45 years, furnishes the following particulars of his income and other details for the previous year 2021-11:
| Paticulars | Amount (₹) |
| Income from tea business
Losses from sugar business Dividend from India company carrying on agricultural operations (gross) Agricultural income Salary received as a partner from a partnership firm. The same was allowed to the firm. Net annual value of house property Loss from gambling Short term capital gains on sale of land Loss on sale of shares listed in BSE. Shares were held for 15 months and STT paid on sale and acquisition Life insurance premium paid(10% of the capital sum assured) Bank interest on Fixed deposit (gross) Interest on saving bank account |
5,00,000
4,00,000 1,00,000 55,000 4,50,000
4,20,000 1,00,000 75,000 3,00,000
80,000 55,000 13,000 |
The other details of brought forward losses pertaining to A.Y. 2021-21 are as follow
| Particulars | Amount (₹) |
| Brought forward business loss from sugar business
Brought forward short term capital loss Brought forward loss from house property Brought forward loss from maintenance of race horses |
1,00,000
45,000 3,00,000 60,000 |
Compute the total income of Mr. Kabir for the Assessment year 2022-23 and the amount of loss, if any, that can be carried forward, if he does not opt for section 115BAC (5 Marks)
- Mr.Kamal, having business of manufacturing of consumer items and other products, gives the following Trading and Profit & Loss Account for the year ended 31.03.2022:
Trading and Profit & Loss Account
| Particulars | ₹ | Particulars | ₹ |
| Opening Stock
Purchases Freight & Cartage Gross Profit
Bonus to staff Rent of premises Advertisement Bad Debts Interest on loans Depreciation Goods and Services tax demand paid Miscellaneous expenses Net Profit of the year |
5,62,500
1,88,62,500 1,89,000 43,86,000 2,40,00,000
71,250 80,250 7,500 1,12,500 2,51,250 1,07,250
1,62,525 7,88,475 50,85,000
|
Sales
Closing Stock
Gross profit Income-tax refund Warehousing charges
|
2,33,25,000
6,75,000
2,40,00,000
43,86,000 30,000 22,50,000
|
|
66,66,000
|
66,66,000
|
Following are the further information relating to the financial year 2021-22:
(i) Income-tax refund includes amount of Rs 4,570 of interest allowed thereson.
(ii) Bonus to staff includes an amount of Rs 7,500 relating to P.Y. 2020-21, paid for in the month of December 2021.
(iii) Advertisement expenses include an amount of Rs 2,500 paid for advertisement published in the souvenir issued by political party. The payment is made by way of an account payee cheque.
(iv) Miscellaneous expenses include:
(a) amount of Rs 15,000 paid towards penalty for non-fulfillment of delivery conditions of a contract of sale for the reasons beyond control,
(b) amount of Rs 1,00,000 paid to Political party by cheque.
(V) Goods and Services Tax demand paid includes an amount of Rs 5,300 charged as penalty for delayed filing of returns and Rs 12,750 towards interest for delay in deposit of tax.
(vi) Mr. Kamal had purchased a warehousing building of Rs 20 lakhs in rural area for the purposes of storage of agricultural produce. This was made available for use from 15.07.2021 and the income from this activity is credited in the Profit and Loss account under the head “Ware housing charges”.
(vii) Depreciation under the Income-tax Act, 1961 works out at Rs 65,000.
(x) Interest on loans includes an amount of Rs 80,000 paid to Mr. X, a resident, on which tax was not deducted.
Compute the total income and tax liability of Mr. Kamal for the A.Y.2022-23 in a most beneficial manner (20 Marks)
- State Government of Madhya Pradesh grants a lease of coal mine to ABC Co.Ltd., an Indian company, on 1.10.2021 and charged Rs 8 crores for the lease. ABC Co.Ltd. sold coal for Rs 2 crores to Mahapower Ltd. Another Indian company, during the previous year 2021-22. Mahapower Ltd Furnishes a declaration to ABC Co.Ltd. that the coal is to be utilized for the purpose of generation of power. The turnover of ABC Co.Ltd. And Mahapower Ltd. For the F.Y. 2020-21 amounted to Rs 11 crores and Rs 12 crores, respectively. What is the amount of tax required to be deducted or collected at source in respect of the above transactions, if any? (10 Marks)
- Mr. Vikas, a resident in India aged 80 years, is having a house property in Mumbai. He has let out the house property to ABC Ltd. For a rent of Rs 50,000 per month from 1.4.2021. He does not have any other source of income. Is Mr. Vikas required to file his return of income for A.Y. 2022-23. If yes, why? (10 Marks)
- Examine the applicability of tax deduction at source provisions, the rate and amount of tax deduction in the following cases for the F.Y. 2023-24:
(1) Payment made by a company to Mr. Ram, sub-contractor, Rs 3,00,000 with outstanding balance of Rs 1,20,000 shown in the books as on 31.3.2024.
(2) Winning from horse race Rs 1,50,000 paid to Mr. Shyam, an Indian resident.
(3) Rs 2,00,000 paid to Mr.A, a resident individual, on 22-02-2024 by the State of Uttar Pradesh on compulsory acquisition of his urban land. (7 Mark)
- Mr. Akash has undertaken certain transactions during the F.Y.2023-24, which are listed below. You are required to identify the transactions in respect of which quoting of PAN is mandatory in the related documents
| S.No. | Transaction |
| 1. | Payment of life insurance premium of ₹ 45,000 in the F.Y.2023-24 by account payee cheque to LIC for insuring life of self and spuse |
| 2. | Payment of ₹ 1,00,000 to a five-star hotel for stay for 5 days with family, out of which ₹ 60,000 was paid in cash |
| 3. | Payment of 80,000 by ECS through bank account for acquiring the debentures of A Ltd., an Indian company |
| 4. | Payment of ₹ 95,000 by account payee cheque to Thomas cook for travel to Dubai for 3 days to visit relatives |
| 5. | Applied to SBI for issue of credit card. |
(8Marks)
