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TAXATION-II

Time allowed 2 hours
Total marks 100

[N.B. The figures in the margin indicate full marks. Questions must be answered in English. Examiner will take account
of the quality of language and the manner in which the answers are presented. Different parts, if any, of the same
question must be answered in one place in order of sequence.]
Marks
01. Discuss the changes made by Finance Act 2013 with its effect on the following items. 10

a. Charge of Minimum Tax U/S. 16 CCC.
b. Change of Investment Rebate U/S. 44.
C. Deduction at source from salaries : newly added sub-section (2A) of section 50.
d. Additional powers to enquire and production of documents by the assessee sec.-116(1).
e. Requirements of certificate or acknowledgement receipts of return of income in certain cases Sec. 184A.

02. a. Who is liable to pay advance tax? 02
b. How advance tax is computed and payable? 04


c. B Ltd. computed its advance tax payable for income year 2012-2013 based on latest assessed
income of Tk. 500,000 for the income year 2009-2010. Assessment for the income year 2010-2011
was completed on 15 April 2013 at a loss of Tk. 600,000.
Calculate the amount of advance tax to be paid by B Ltd. in each quarter for the assessment year
2013-2014.
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03. The following particulars of income of Mr. Ali Ahmed are available for the assessment year 2013-
2014 :
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Income from house property Taka 100,000
Business income (after allowing for current years
depreciation of Tk. 20,000)

Taka 70,000

The following sums have been brought forward from the preceding year :

Unabsorbed depreciation Taka 80,000
Business loss Taka 50,000

Deputy Commissioner of Taxes is proposing to assess him on a total income of Tk. 100,000 by setting off only the
business loss of Tk. 50,000 and part of the unabsorbed depreciation of Tk. 20,000 against the business income of Tk.
70,000. Is he right in his action? Explain.

04. The following are the income of Mr. Azad for the year ended J une 30, 2013. Compute his total income
and tax liability.

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a. Salary Income
Basic Salary 4,20,864
Festival Bonus 70,144
House Rent Allowance 3,75,735
Entertainment Allowance 4,173
Conveyance Allowance 35,072
Other Allowance 16,262
Employees Contribution to Provident Fund 42,086
Tax Deducted from Salary 12,000

b. House Property Income
House Rent 2,97,600
City Corporation Tax 9,000
Salary of Security Guard 48,000
Salary of Sweeper 12,000

c. Income from Business 3,78,975

d. Income from partnership (A Real estate business)
(Tax deducted at source Tk. 65,280)
5,96,400

e. Income from land sale (Capital gain)
(TDS Tk. 40,000)
1,60,000

f. Income from share business U/S. 32(7) 89,74,071

g. Dividend Income (Gross) 12,04,374
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h. Interest from SB A/C (Gross) 966

i. Income from Fisheries Business 4,03,000

j. Income from poultry firm 2,05,000
(investment in Govt. Bond)
Notes :
1. Purchase of 5 years Bangladesh Sanchaya Patra 2,00,000
2. Investment in DPS 1,20,000
3. Advance tax for car registration 15,000
4. The assessee has a flat in Bashundhara R/A but was vacant
due to non-connection of Electricity and GAS.

5. Assessees total wealth 12,50,90,210

5. ABC Telecom Ltd. is a listed telecom company Enjoying Tax holiday since 1
st
September 2010 declared dividend 10% for the
year and no dividend was paid last year. Statement of Financial position of the company as at J une 30, 2013 is given below:

Particulars 2012-2013 2011-2012
Non Current assets
Property, Plant and Equipment (net of accumulated depreciation) 1,469,055,265 1,745,945,621
License fees 433,333,333 466,666,667
Investment 45,000,000 -
1,947,388,598 2,212,612,288
Current Assets
Receivables 56,734,179 54,512,957
Advances, Deposits ad Prepayments 12,364,972 12,543,768
69,099,151 67,056,725
Total assets
2,016,487,749 2,279,669,013
Equity and Capital
Paid up Capital 500,000,000 500,000,000
Tax Holiday Reserve 424,409,174 137,061,174
Retained Earnings 636,613,761 205,591,761
Total Equity and Capital 1,561,022,935 842,652,935
Non Current liability
Loan (net of current maturity) 102,632,982 442,632,982
Current liability
Loan current portion 340,000,000 978,390,964
Payables, accruals and provisions
12,831,832 15,992,132
Total Current liability
352,831,832 994,383,096
Total Liability
2,016,487,749 2,279,669,013

Month wise income before tax is given below:
Figures in million
Month International
Gate way (IGW)
Access Network
Services (ANS)
Dividend income
J uly '12 30,250,000 11,340,000
August '12 44,190,000 14,510,000
September '12 34,820,000 15,930,000 3,950,000
October '12 47,000,000 18,100,000
November '12 48,250,000 19,360,000
December '12 44,090,000 14,100,000 3,870,000
J anuary '13 41,020,000 12,130,000
February '13 44,890,000 14,900,000
March '13 45,670,000 15,780,000 3,800,000
April '13 49,440,000 19,550,000
May '13 41,110,000 17,230,000
J une '13 40,210,000 19,320,000 3,560,000
Total 510,940,000 192,250,000 15,180,000

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Other information:
1. tax deducted at source Tk. 81,236,721 which includes Tk. 1,518,000 deducted from Dividend income and the
balance from IGW bill;
2. excess perquisite given by the company Tk. 3,782,925;
3. entertainment expenses Tk. 24,572,890;
4. depreciation charged Tk. 231,890,356 but as per third schedule depreciation is BDT 312,098,563;
5. amortization of license fees Tk. 33,333,333;
6. provision for gratuity Tk. 1,000,000;
7. provision for bad debts Tk. 5,000,000;
8. business promotion expenses Tk. 1,345,308; and
9. advertisement Tk. 650,000
10. Directors Remuneration Tk. 25,000,000.

The company has deducted tax and VAT except on Business promotion expenses of Tk. 1,345,308, advertisement Tk.
150,000 and Directors remuneration of Tk. 25,000,000. The company paid withhold tax and VAT with penalty against
directors remuneration before submission of return.

Requirements 25
1. Compute total taxable income and net tax payable.
6. Write your arguments against the following grounds of appeal.
a. Sale proceeds of a land Tk. 79,000,000 deposited in the bank account of a company. The land was in the
name of the Chairman of the company but the land was not shown in the wealth statement of the Chairmans
personal tax file. The company claimed the amount as loan from chairman but the DCT added as income of
the company and upheld by CT(A).
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b. The DCT estimates Gross profit 36% of last year instead of shown GP 25% because the company failed to
produce all the vouchers of raw materials, factory overhead and added Tk. 40,500,000 with total income.
03

c. The DCT computed tax liability TK. 230,000,000 and advance tax deposited by the company Tk. 7,800,000
against income tax provision of Tk. 10,000,000. The DCT charged interest because Tk. 7,800,000 is less
than 75% of the claimed tax.
03

07. State the provision of section 17 of Value Added Tax, 1991 regarding self registration. What are the
procedures of registration under Rule 9?
5

08. What are the offences and penalties under section 37 (i) and Rule 35 of VAT Rules, 1991? 4

09. Mention the rate of VAT based on value additions fixed by NBR applicable to the following service
providers :
i) Carrying contractor.
ii) Advertising firm.
iii) Printing press.
iv) Information Technology Enabled Services.
v) Sponsorship Services.
Vi) Human Resource Suppliers.
Vii) Building floor Cleaning and maintenance firm.
viii) Event management firm.
ix) Chartered Plane or Helicopter.
x) Other Miscellaneous Services.
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10. Writes short notes on following item relating to VAT :
i) Current Account.
ii) Penalty for False declaration of input tax.
iii) Retail trade service.
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