PIONEER INSTITUTE OF PROFESSIONAL STUDIES, INDORE

ASSIGNMENT
MBA III SEMESTER
61306 (F): BUSINESS TAX
1. Mr. ROHAN JAIN is an Indian citizen and businessman, who reside in Mumbai, went to Dubai on
5th August, 2017 for the first time to abroad. He came back to India on 31st October 2018. He went
to Dubai for employment purpose.
(A) Determine the residential Status of MR. ROHAN JAIN for the assessment year2018-19.
(B) Will your answer be different if he gone on a leisure trip.

2. According to the Income Tax Act of India.

(a). Explain the terms (1) Assessment Year (2) Previous Year (3) Income
(b). Explain the terms (1) Person (2) Assessee.

3. (a). Explain the Taxability of Leave Travel Concession.

(b). Mr. Rahul is employed in a Private Company at Rs. 70000/- per month, 6000/- per month as
dearness pay and Rs. 10000 per annum as commission during the previous year. He received Rs.
2000/- per month as house rent allowance. He paid Rs. 2500/- per month rent. Compute the HRA
exempted from tax.

4. Decide the Taxability of the following allowances with reason on the basis of Sec 10(14)(i).
(i) Mr. X granted Rs. 2000/- as transfer (travelling) allowance and Rs. 500/- for packing
allowance. He actually spent Rs. 2000/-
(ii) Mr. R gets Rs. 200 p.m. as conveyance allowance. For official work. Actual expenses of
the year Rs2500/-
5. Explain the provision for the value of Rent free house for non Government employee. And find out
the value of perquisite of accommodation on the basis of given information.
(i) Fair Rental Value of house Rs. 100,000/
(ii) Annual Salary of the employee Rs. 600,000/-
(iii) Population of the city is 25 lakhs
6. Mr. X furnishes the following information relevant for the assessment year 2018-19:
Profit and Loss a/c for the year ending March 31, 2018

Office expenses 45,000 Gross profits 8,03,000

Sundry expenses 39,000 Sundry receipts 11,000
Entertainment expenditure 5,000 Bad debts recovered (Earlier
7,100
Audit fees 12,000 NOT allowed as deduction)
Legal charges 4,000
Customs duties recovered from
Extension of Building 6,000
the Government(Earlier allowed 32,500
Depreciation on plant and as deduction)
23,000
machinery
Salary to staff: Gift received from father 43,000
Salary 43,000
Bonus 36,000
Contribution towards :
Employees’ recognized
15,000
provident fund
Unapproved gratuity fund 4,000
Sales tax 38,000
Provision for Commercial tax 25,000
Payment to an approved
research association for carrying 19,000
on scientific research
Net profit 5,82,600
Total 8,96,600 Total 8,96,600
Other Information:
1. As shown in the Profit and Loss A/c. Rs.19000 paid to a research association for the purpose of
carrying on approved scientific research in natural science, not related to the business of X. Besides, X
purchases a plant of Rs.30,000 for the purpose of carrying on scientific research related to his
business . Neither cost of plant nor depreciation thereon is debited to profit and loss A/c.
2. Out of bonus of Rs.36,000 Rs. 4,000 is paid during 2017-18 and Rs. 26000 is paid by July 31, 2018
(being the due date of furnishing return of income). The balance of Rs. 6000 is however paid on
November 11, 2018. And Salary to staff includes a payment of pension of Rs. 5000 to the widow of a
former employee.
3. Depreciation on plant and machinery and extension of building as per income tax provision is
Rs.19000.
4. Sales tax of Rs.38,000 includes (a)interest for late payment of sales tax: Rs. 1,200; (b) penalty for
evading sales tax:Rs.10,000.
5. Provision for Commercial tax represent an outstanding sales tax liability, which is however, paid on
July 10, 2018.
Ascertain the net income of Mr. X under the Income Tax Act. According to the provision of
Income From Business / Profession for the Asst. Year 2018-19.
7. Explain the provisions of Income Tax Act, Related to the deduction of “Interest paid/ payable on
the sum borrowed for construction or renovation of House Property

8. Mr. X take a loan of Rs. 60000 @ 15 % P.A. for construction of a house on June 10, 2010.
Construction of the house is completed on 20, January, 2016. If the date of repayment of loan is (A)
16-01-2021 or (B) 30-06-2017 or (C) 31-10-2013. Show the table of interest deductible in different
previous years from year ending on 31st March, 2016 to Ending on 31st March, 2022.

9. Write a short note on “Expenditure on scientific research U/s. 35" of The Income Tax Act.

10. What is “Short Term Capital Assets”& “What is Long Term Capital Assets” explain in the light of
the term “Capital Assets” of Income Tax Act.

11. “Y” Transfer the following capital assets during the previous year 2016-17:

Listed House Property

Particulars Shares
Rs. Rs.

Sale Consideration 24,00,000 6,80,000

Year of Acquisition 1992-93 1985-86

Cost of Acquisition 2,90,000 18,000

Cost of Improvement in year 1991-
92 - 70,000
Compute the Capital Gain of “X” for the Asst. Year 2017-18

Years and its COST OF INFLATION INDEX) 1985-86:-133:, 1991-92:- 199 :, 1992-93:-223, 2015-
16:-1081

12. Write down the provisions regarding.

i. “TCS” for the Assessment. Year. 2019-20
ii. TDS” On payment to contractor under sec. 194C of Income Tax Act.

13. Explain the concept of “deductions” under the Income Tax Act. And Discuss the various
deductions available to an Individual Assessee under sec. 80C, 80DD, & 80E of the Income Tax
Act.

14. Write a note on the conditions for general deductions under sec. 37 for the Act. with some
appropriate example of the general expenditure.
15. Find out the Tax liability for the assessment year 2018-19 in the following cases (Mr. B is
considered, as non- resident, and all other taxpayers are resident).

Mr. X (40 Mr. Y (45 Z (Firm) A Ltd. Mr. B (61

Years) Years) Years)
Business Income of the year 3,00,000 40,00,000 40,00,000 40,00,000 23,00,000
Dividend Income from
different domestic Companies
(dividend tax is paid by the
companies)
From D Ltd 40,00,000 9,60,000 15,000 11,00,000 40,00,000
From E Ltd 10,000 NIL 3,000 18,00,000 10,000
From F Ltd 8,90,000 Nil 29,82,000 21,00,000 8,90,000
Expenditure for dividend 2,60,000 90,000 80,000 12,00,000 2,60,000
income
Deductions u/s. 80C to 80U 4,10,000 2,15,000 7,00,000 8,18,000 4,10,000

16. Write a short note of filling of Income Tax Returns by Individual and Corporate of Assessee U/s.
139(1).

17. Explain the provisions of Income Tax Act. Sec 44AA and sec 44AB regarding Maintenance of
Books of Accounts and Tax Audit.

18. What do you mean by “Income from Other Sources”. What if, a son of Mr. Y receives Rs. 500000/-
from his father without any appropriate consideration.

19. Write a note on and Dividend Distribution Tax, income from winning of Lottery, and card game
under the Income Tax Act.

20. Writ down the provision of Sec 139A of Income Tax Act. Related to PAN.