CITY COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION

INTERMEDIATE EXAMINATION, 2020

B. COM (HONOURS)
SEMSTER-IV
TAXATION – I
FULL MARKS- 40 TIME-1 HOUR

Submit your answer script to the following Email ID

tax.cccba@gmail.com

ANSWER ANY FOUR QUESTIONS. (4 X 10)

1. (a) Mr. Dhar a foreign Citizen. His grandfather was born in Bangladesh on 18th June, 1940. He
comes to India on 20th November, 2019 for a visit of 250 days. Determine his residential status for
the Assessment year 2020-2021. [4]
(b) Compute gross total income of Smt. Saha from the following particulars of income as
furnished by her for the previous year 2019-20 if she is a -- (a) resident but not ordinarily resident and
(b) non-resident for the given previous year: [6]
(i) Dividend from Australian company received therein Rs.50,000
(ii) Agricultural income from Nepal but received in India Rs.1,20,000
(iii) Profit from a business in Thailand Rs.2,50,000 and 40% received in India. The business is
controlled from India.

2. Mr. C is an Indian resident and employed in a company. During 2019-20 financial year his income
was as under:
(i) Basic salary Rs.20,000 per month.
(ii) Dearness allowance 30% of basic salary (50% of which forms part of salary for retirement
purpose)
(iii) Medical allowance Rs.500 per month (Actual expenses for the year was Rs.4,000)
(iv) He and his employer both contributes @15% of salary towards a Recognized Provident Fund and
interest credited to RPF @12.5% p.a. amounted to Rs.5,000 during the previous year.
(v) He is also given a 1.6 litres cubic capacity self driven car for both personal and official use. Entire
expenses are borne by the company
(vi)He is provided by his employer with free gas and electricity costing Rs.12,000 for private use
(vii) He paid Rs.1,600 towards professional tax and his employer paid Rs.12,000 as insurance
premium on his life. Compute the income from salaries of Mr. C for the assessment year 2020-21.

3. Mr.Laltu, owner of three houses in Delhi, furnished the following information. Compute his Income
from House Property for the assessment year 2020-2021.

Particulars House 1 House 2 House 3

Let out Self-occupied Self-occupied
Rs. Rs. Rs.
Standard Rent 38,400 60,000 ---
Net Municipal Value 36,000 63,000 54,000
Fair rent 45,000 66,000 50,000
 Rent received 40,000 ---- ----
Repairs Nil 5,000 2,000
Municipal Tax @10% 80% Fully paid 20% unpaid
Interest on loan takenfor the repair unpaid 6,000 9,000
of the house. 3,000
Vacancy period ---- ----
Recovery of unrealized 2 months ---- ----
Rent(Previously allowed in 2010- 9,000
2011) ---- ----
Collection charges 5,000

4. From the following Profit and Loss A/c and other relevant inforamtion, compute income from
business of Retanlal for the A/Y 2020-21.

Profit and Loss a/c for the year ended 31.3.2020

Particulars Amount Particulars Amount
To Opening Stock 11,000 By sales 5,20,000
To Purchases 2,50,000 By dividend from foreign company 4,000
To Business Expenses 7,500 By bad debt recovery(disallowed 35,000
To Income Tax 8,500 in 2017-18)
To Fine paid to Excise Dept. 12,000 By Bank interest 15,000
To Provision for bad debts 8,000 By Closing stock 66,000
To Depreciation 27,000
To Donation to Puri temple 10,000
To Sales Tax 16,000
To Travelling Expenses 5,000
To Advertisement 15,000
To Net Profit 2,20,000 _________
6,40,000 6,40,000
Additional Information:
(i) Both opening and closing stock have been valued at 10% above cost.
(ii) Business expenses include (i) wages @200 p.m to his domestic servant (ii) Life Insurance
Premium of Rs.1,600 on his own life.
(iii) Purchases include a payment of Rs.40,000 made in cash.
(iv) Depreciation as per I.T. Rules Rs.22,000

5. (a) Mr. J purchased a house property on 1st September, 1999 for Rs.2,10,000. Fair market value of
the property on 1st April, 2001 was Rs.1,70,000. He incurred the following expenses:

Construction of a room on the ground floor during 2000-01 – Rs.10,000

Renewals/reconstruction in 2015-16 – Rs.3,92,000
The property was sold on 31st March, 2020 for Rs.44,65,000. Compute the capital gain for
the A.Y. 2020-21. [6]
[ CII: 2001-02: 100, 2015-16: 254, 2019-2020: 289]

(b) Mr. M sold the shaes of AB Co. Ltd. on February 12, 2020 for Rs.18,700 (purchased on March
21,2019 for Rs.15,300). Compute his income from capital gain/loss for the A.Y. 2020-21. [4]

6. From the following information calculate the amount of deduction under section 80G:
(i) Donation to University of Calcutta 10,000
 (ii) Donation to National Defense Fund 12,000
(iii) Donation to Prime Minister’s National Relief Fund 15,000
(iv) Donation to Jawaharlal Nehru Memorial Fund 11,000
(v) Donation to approved local authority for promoting family planning 8,000
The total income of the assessee for the previous year without considering deduction u/s 80G is
Rs.3,00,000.

7. From the following information compute Total Income of Mr. N for the A.Y 2020-21:

Income from business X – 50,000,

Income from business Y – (-) 95,000,
Income from house property – 40,000,
Interest on bank deposit – 12,000,
Income from speculative business – (-) 12,000,
Long term capital loss – 25,000,
Short term capital gain – 10,000,
Brought forward loss from house property (previous year 2010-11) – 10,000

8. (i) State five incomes that are fully exempted from tax u/s 10 of the I.T Act. [5]
(ii) State with reasons in brief, whether the following incomes are agricultural income or not:[5]
(a) Income earned from the sale of tea grown and manufactured by the assessee.
(b) Income from growing flowers and creepers.
(c) Profit earned from selling agricultural products from a land situated at Bangladesh.
(d) Interest on capital received by a partner from the firm engaged in agricultural operations.
(e) Profit earned from the sale of agricultural land.