Unique Paper Code 7004
Revised 0 of 16

Income Tax Law and PracticeNovember–December 2019

B.Com (Hons) · 5 questions · 4 parts still being checked

Duration: 2.5 HoursMaximum Marks: 55

From an older CBCS paper

Reworded by Kunji from the printed paper. The original paper belongs to the University of Delhi. See DU's question bank.

Before you start

  1. Numbers and theory. 10 numerical parts and 10 theory parts. Numericals take longer to lay out, so give them your freshest time.
  2. Pace. Two minutes a mark: about 22 minutes for each 11-mark question, with nothing spare in 2.5 hours. Pick your side of each OR before you start writing.
  3. Keep score. Every part opens a worked answer checked against the books. Turn the key when you have revised it; the boxes at the top fill in, on this device.

1.

11 marks
· ~22 min
(a)Residential status of an Indian citizen who leaves for a job abroad, and his taxable income (as set, 1961 Act, AY 2019-20)Mr. Pankaj Kapoor (50 years old) is an Indian citizen who left India for the first time on 27.9.2018 to take up employment in Hong Kong. During the previous year 2018-19 he earns the following incomes : For the…(8)
(b)Exceptions to the rule that the previous year's income is taxed in the next assessment year (as set, 1961 Act, AY 2019-20)Income earned in the previous year is chargeable to tax in the assessment year that immediately follows it. State the exceptions to this rule. Paper note: The as-set version: set and answered under the Income-tax Act,…(3)
OR
(a)Taxable income and tax of a senior citizen with agricultural income: partial integration (as set, 1961 Act, AY 2019-20)Determine the taxable income of Ms. Kalyani Rao (60 years of age) and her tax liability for the assessment year 2019-20, on the basis of the following information about the previous year 2018-19 : Paper note: The as-set…(8)
(b)The term assessee under the 1961 Act (as set, 1961 Act, AY 2019-20)Explain the term ‘assessee’. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2019-20 (previous year 2018-19), with the dates as printed.(3)

2.

11 marks
· ~22 min
Salary of an employee who retires in the year, with pension, gratuity and perquisites (as set, 1961 Act, AY 2019-20)Being checked
(11)
OR
(a)Cases where the annual value of a house property is not charged to tax (as set, 1961 Act, AY 2019-20)Give four instances in which the annual value of house property income is not chargeable to tax. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2019-20 (previous year…(2)
(b)
Three houses used for residence: which to treat as self-occupied, and income from house property (as set, 1961 Act, AY 2019-20)Being checked
(9)

3.

11 marks
· ~22 min
(a)Block of buildings: depreciation and capital gain when one building is sold and another bought (as set, 1961 Act, AY 2019-20)Suresh owns two buildings, both used by him for his own business. These buildings have a written down value of ₹ 15,00,000 as on 1.4.2018, and the rate of depreciation allowed on this block is 10%. On 1.12.2018 he…(4)
(b)Interest and remuneration to partners allowable under section 40(b) (as set, 1961 Act, AY 2019-20)XY & Co., a partnership firm, has paid its partners interest @15%p.a. amounting to ₹ 90,000, along with remuneration of ₹ 4,80,000, during the previous year 2018-19. The firm's book profits have been computed at ₹…(4)
(c)Section 43B: deductions allowed only on actual payment (as set, 1961 Act, AY 2019-20)Certain expenses are allowed as a deduction only if they have actually been paid, irrespective of the method of accounting the assessee follows. Discuss, in this regard, the provisions of section 43B of the Income Tax…(3)
OR
Business income from a profit and loss account with personal and capital items (as set, 1961 Act, AY 2019-20)Being checked
(11)

4.

11 marks
· ~22 min
(a)
Capital gain on gifted gold ornaments, with exemption for building a house (as set, 1961 Act, AY 2019-20)Being checked
(7)
(b)Cases where the cost of acquisition is the cost to the previous owner (as set, 1961 Act, AY 2019-20)Enumerate any four cases in which the cost of acquisition is the cost to the previous owner, for computing capital gain. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment…(4)
OR
(a)Sale of a house below stamp duty value, exemption under section 54, and sale of the new house within three years (as set, 1961 Act, AY 2019-20 and 2020-21)On 28.6.2018 Gurusaran sold a residential house for ₹ 30,00,000. The stamp duty value of this house is ₹ 34,00,000. This house had been purchased by him on 1.10.2005 for ₹ 5,20,000, and he had spent ₹ 2,70,000 on the…(9)
(b)Assets whose cost of acquisition is taken as nil (as set, 1961 Act, AY 2019-20)Enumerate four assets for which the cost of acquisition is taken as nil when capital gains are computed. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2019-20…(2)

5.

11 marks
· ~22 min
(a)Total income and tax of a resident senior citizen with a house property loss and long-term capital gain (as set, 1961 Act, AY 2019-20)Mr. Rohit Seth (66 years old), a resident in India, gives the following details of his incomes as well as investments during the previous year 2018-19 : Salary (computed) : ₹ 3,00,000, Loss on House Property: ₹…(8)
(b)Section 80D: deduction for health insurance premium and medical expenditure (as set, 1961 Act, AY 2019-20)Explain the provision of Section 80D regarding medical insurance. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2019-20 (previous year 2018-19), with the dates as…(3)
OR
(a)Rebate of tax under section 87A (as set, 1961 Act, AY 2019-20)Explain the rebate of tax allowed under section 87A. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2019-20 (previous year 2018-19), with the dates as printed.(3)
(b)Inter-head set off of losses under section 71 (as set, 1961 Act, AY 2019-20)Explain the provisions relating to inter head adjustments, that is, the set off of losses under the head house property, under business and profession and under income from other sources. (Section 71) Paper note: The…(3)
(c)Philip John Plasket Thomas v. CIT (1963): no clubbing of income from a gift made before the marriage (as set, 1961 Act, AY 2019-20)Explain the Supreme Court's judgement in the case Philip John Plasket Thomas vs CIT, and the principle of income tax derived from it. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for…(5)

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