Assignment 1 Question 1

50 marks

Subhash discloses following particulars of his receipts during the Previous Year 2012 201!" 15 marks #i$ Salar% income earned at Pune but received in Sri &anka 2'50'000 #ii$ Profits earned from a business in (en%a which is controlled in )ndia' half of the profits being received in )ndia* 2'20'000 #iii$ )ncome from propert%' situated in +airobi and received there ,5'000 #iv$ )ncome from agriculture in -angladesh and brought to )ndia .5'000 #v$ /ividend paid b% an )ndian compan% but received in &ondon on 15th 0a%' 2012 22'000 #vi$ )nterest on 1SA /evelopment -onds' one half of which was received in )ndia ,2'000 #vii$ Past foreign unta3ed income brought to )ndia 2'10'000 #viii$ 4ift of 51000 from father' settled in 1SA' received in )ndia 60'000 #i3$ 7apital 4ains on sale of &and in /elhi' consideration received in 7anada 2'50'000 #3$ )ncome from structure designing consultanc% service' set up in 4erman%' controlled from )ndia' profits being received outside )ndia 8'00'000 #3i$ &oss from foreign business' controlled from )ndia' sales being received in )ndia 2'00'000

/etermine his 4ross 9otal )ncome for the Previous Year 2012 201! if he is #i$ :esident and ;rdinaril% :esident' #ii$ :esident but not ;rdinaril% :esident' #iii$ +on :esident* Question 2 5 marks 0r* < has =oined )77 &td* on 1st >ul%' 200. in the scale of ?15'000 1'500 @ 21'000 @ 2'500 @ !1'000* 7ompute gross salar% for the Previous Year 2012 1! Question ! 10 marks 0r* (ing is getting a salar% of ? 5'800 pm since 1*1*11 and dearness allowance of ? !'500 p*m*' 50A of which is a part of retirement benefits* Be retires on !0th +ovember 2012 after !0 %ears and 11 months of service* Bis pension is fi3ed at ? !'600 pm* ;n 1st Cebruar% 201! he gets !D8ths of the pension commuted at ? 1'5.'000* 7ompute his gross salar% for the Previous Year 2012 1! in the following cases " #i$ )f he is a 4overnment emplo%ee' getting gratuit% of ? 1'.0'000 #ii$ )f he is an emplo%ee of a private compan%' getting gratuit% of ? 1'.0'000 #iii$ )f he is an emplo%ee of a private compan% but gets no gratuit%*

Question 8 10 0arks 0r* :ohan owns two houses* 9heir particulars for the Previous Year 2012 201! are given below" Construction completed on 01.04.2011 Particulars

Bouse ) S;P

Bouse )) &;P ? 15'00'000 18'00'000 12'00'000 16'00'000 150'000 15'000 2'00'000 8'50'000 8'50'000 1'50'000 !1*12*2005 +o

0unicipal Ealuation Cair :ent Standard :ent Annual :ent received Dreceivable 0unicipal 9a3es paid )nsurance premium paid :epair e3penses 1nrealised rent conditions of :ule 8 satisfied )nterest on loan for the pre construction period )nterest on loan for the post construction period for the PY %ear 2012 201! /ate of borrowing the loan 7ertificate of interest attached to the return* Question 5

? 10'00'000 12'00'000 6'00'000 +il 1'20'000 10'000 1'50'000 +il !'00'000 1'00'000 !1*12*2005 +o

10 marks Fhat would be %our advice regarding admissibilit% of the following items of e3penditure in computing the business income" #a$ A donation of ? 1 lakh made to a 1niversit% for starting a laborator% for scientific research #i$ relating to the assesseeGs business' #ii$ not relating to the assesseeGs business* #b$ 9ravelling e3penses include a sum of ? 15'000 incurred b% a director in travelling abroad for negotiating purchase of plant and purchase of plant and machiner%* #c$ Amount pa%able as damages to 4overnment on account of shortfall in e3port target*

#d$ ;verdraft from bank for pa%ment of income ta3" interest charged b% the bank is ? 20'000* #e$ Pa%ment of interest of ? 80'000 on monies borrowed from bank for pa%ment of dividends to shareholders* #f$ ? 12'000 paid for shifting of business from the original site to the present place which is more advantageousl% located* #g$ :etrenchment compensation of ? 8 lakh paid to the workmen on the closure of one of the units* #h$ Cees paid to the :egistrar of 7ompanies for bringing about a change in the 0emorandum and Articles of Association in regard to issue of HIuit%*