Date: - 07.05.

2018 Marks: 60
Sub: - TAXATION STD:- TY BAF Time:2 Hrs

Q1 Following is the Profit & Loss Account of Mehta Traders a registered partnership firm of which Mr. A &
B is equal partners.
Particulars Rs. Particulars Rs.
To Salaries 1,06,000 By Gross Profit 1,66,000
To Electricity & Water 12,200 By Commission 5,000
To Rent 2,000 By Sale of Scrap 5,000
To Rates & Taxes 2,500 By Excise Penalty Refund 2,500
To Motor Car Expenses 9,000 By Income Tax Refund 7,700
To Entertainment Expenses 3,000 By Capital Gain on Sale of Shares 15,000
(Computed)
To Repairs 6,000
To Depreciation 8,000
To Trade Expenses 6,500
To Legal Expenses 3,500
To Net Profit 42,500
2,01,200 2,01,200
Other Information:
1. Salaries Include: Rs. 30,000 paid to Mr. A
Rs. 30,000 paid to Mr. B
2. Rates and taxes include municipal taxes of Rs. 1,000 paid on the premises of the partner Mr. B to be
borne by him.
3. Repairs include cost of electric motor replaced at a cost Rs. 3,000
4. Legal expenses include Rs. 500 paid to advocate in connection with the litigation of the partner Mr. B’s
properly.
5. Excise penalty was disallowed when debited in the earlier year i.e. assessment year 2015-16
6. Trade Expenses Include:
Donation to charitable (Approval) Rs. 1,500
Diwali Pooja Expenses Rs. 1,000
7. Shares sold were held by the film for a period of more than 12 months.
Other particulars relating to Mr. A for the year ended 31-3-2017.
a) From M/s Mishra Traders, in which he is a partner, he received:
i) Share of profit Rs. 30,000
ii) Commission from the firm Rs. 75,000
iii) Interest on capital Rs. 16,000
b) Gross interest on Bank fixed deposits Rs. 30,000 (TDS Rs. 3,060)
c) Interest on public provident fund account Rs. 10,000
d) Dividend on units of United Trust of India Rs. 5,000
e) Mr. A also made the following investments:
Public provident Fund Rs. 40,000
National savings certificate (VIIIth Issue) Rs. 20,000
f) Mr. A also paid the life insurance premium of Rs. 6,000 on policy taken on his own life.
g) Mr. A also made a donation of Rs. 10,000 to National defence fund in cash.
You are required to calculate:
1) Taxable income and tax liability of the firm Mehta Traders.
2) Taxable income and tax liability of Mr. A.

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 Or
Q1. ABC is a partnership firm carrying on business, in which A, B and C are partners sharing profits and
losses equally. In respect of assessment year 2017-18, it furnishes the following particulars:
Rs.
a) Loss as per profit and loss account after debiting
remuneration to partners and interest on their capital 2,50,000
b) Remuneration to partners:
A 90,000
B 60,000
C 30,000
Total 1,80,000
c) Interest paid on capital:
As on 01-04-2015 Capital (Rs) Interest (Rs)
A 1,00,000 20,000
B 1,00,000 20,000
C 1,00,000 20,000

You are required to work out the income of the firm and of the partners A, B and C assuming that the
partners have no other income.

Q2. . Following is the Profit and Loss Account of Mr. Shivaji for the year ended 31st March 2017.
Profit & Loss account for the year ended 31stMarch ,2017.
Particular Rs. Particular Rs.
To Salaries 1,03,000 By Gross Profit 2,85,000
To Rent 12,000 By Discount 1,700
To Postage 6,000 By Interest on NSC 12,000
To Stationary & Printing 22,000 By Dividend from co-op society 7,000
To Advertising 12,000 By Income tax refund 4,700
To Repairs to Office Premises 21,300 By Prize money received from T.V. 25,000
Games serial
To Conveyance 16,000
To Income Tax 36,000
To Expenses in connection with 6,000
Income tax case
To Income tax fees paid to chartered 4,000
accountants
To Miscellaneous expenses 25,000
To Depreciation 4,000
To Donations 25,000
To Net Profit 43,100
3,35,400 3,35,400
Additional information:
1) Salaries include bonus payable to employees under the payment of bonus Act Rs.18,000 which was
not paid by the date of filing income tax return.
2) Rent is paid for the residential house of Mr. Shivaji.
3) Repairs Rs.21,300 were paid in cash against a painting bill dated 10th May 2016 and were paid on the
same day.
4) Miscellaneous expenses include purchased of new furniture on 1st January 2016 of Rs.20,000 on which
no depreciation is yet recorded.
5) Mr. Shivaji is a handicapped person.
6) Depreciation allowable as per income tax rules on old fixed assets is rs.3,000, similarly depreciation at
the rate of 10% shall be provided on new fixed assets purchased during the year.

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 Compute taxable income and tax of Mr.Shivaji for the Assessment year 2017-18
or.
Q2. From the following Profit & Loss Account of Mr. Sonawane compute his total taxable income and tax
for Assessment Year 2017-18.
Particular Rs. Particular Rs.
To Opening Stock 3,34,000 By Sales 10,40,000
To Purchases 9,00,000 By Closing Stock 3,05,000
To Office Salaries 71,000 By Income tax Refund 15,000
(Including Interest Rs. 2,000)
To Bad Debts written Off 25,000 By Dividend from UTI 50,000
To Advertisement 10,500 By Lottery prize Received 1,10,000
To Fire Insurance Premium 4,500
To Conveyance 6,000
To Interest on Proprietor’s Capital 25,000
To general Expenses 55,000
To Wealth Tax 5,000
To Sales Tax Penalty 4,000
To Depreciation 30,000
To Net Profit 50,000
15,20,000 15,20,000
Additional Information:
1) General Expenses include Advance Income Tax Rs. 10,000 and Rs. 500 for purchase of lottery tickets.
2) Depreciation allowable as per Income Tax Rules Rs. 25,000
3) Purchases include Rs. 80,000 paid for cash purchases exceeding the limit of Rs. 20,000 prescribed
under section 40A (3) of Income Tax Act, 1961.
4) Office salaries include Bonus due but not paid Rs. 16,500
Mr. Sonawane who is physically handicapped person with 60% disability paid premium for LIC Pension
Policy Rs. 15,000.

Q3. XY partnership firm has income as given below:

1) Income under the head business/ profession Rs.20,00,000 (turnover of the firm is Rs.60,00,000)
2) Income under the head house property Rs.7,00,000
The firm has paid advance tax as given below:
Upto 15th June 2015 Rs.20,000
Upto 15th Sept. 2015 Rs.30,000
Upto 15 Dec. 2015
th
Rs. 80,000
Upto 15th March 2016 Rs. 1,00,000
Balance amount of tax was paid on 10th Dec. 2016.
Compute tax, liability for the assessment year 2017-2018 and also the shortfall/ excess in each
advance tax installment, if any.
Or
Q3. Mr. Prasad, ordinarily resident in India, furnished the following particulars of his income/ savings
during the previous year 2017-
1. Income from foreign business (included Rs.2,00,000 from business 12,00,000
connection in India) accruing outside India
2. Loss from Indian business (2,00,000)
3. Income from house property 4,00,000
4. Dividends gross from Indian companies 60,000
5. Deposit in public provident fund 70,000
6. Tax paid in foreign country 2,50,000
There is no double taxation avoidance treaty. Compute the tax liability

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Q4. Mrs. Shah is an employee of A Ltd. Earning salary of Rs.75,000 p.a. state how her salary will be taxed
in each of the following independent cases, in view of the following further information and the provisions
of S. 64(1) (ii):
1. Mr. Shah holds 25% of the equity shares in A Ltd. Mrs. Shah does not have any professional
qualifications.
2. Mr. Shah holds 25% of the equity shares in A Ltd. The remuneration is due solely to the professional
qualifications of Mrs. Shah.
3. Mr. Shah holds 25% of the equity shares in A Ltd. Mrs. Shah is a qualified engineer; but she works
as an accountant.
4. Mr. Shah holds 15% of the equity shares in A Ltd. and his brother holds 15% of the equity shares in
A Ltd. Mrs. Shah does not have any professional qualification.
5. Mr. Mehta, who is Mrs. Shah’s father holds 25% of the equity share in A ltd. Mrs. Shah does not
have any professional qualifications.
6. Mr. Shah purchased 25% of the equity shares in A Ltd. On 25 th March of the relevant previous year.
Mrs. Shah does not have any professional qualifications.
Or
Q4. Mr. Rahul an assesse aged 61 years gives following information for the previous year 31-3-2017.
Particulars Rs.
Loss from profession 1,05,000
Capital loss on the sale of property-short term 55,000
Capital gains on sale of shares-long term 2,05,000
Loss in respect of self-occupied property 15,000
Loss in respect of let out property 30,000
Share of loss from firm 1,60,000
Income from card games 55,000
Winnings from lotteries 1,00,000
Medical insurance premium paid by cheques 18,000
Compute the total income of Mr. Rahul for the assessment year 2017-18.

Q5. Short Notes (Any 3)

1. Clubbing of Income u/s 64.
2. Set off Rules
3. Intrest U/s 234A, 234B, 234c
4. Partners Salary as per Income tax Act
5. Tax Slab Rates.