CA Inter Suggested Answers | Sep 24 Tax Paper
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Question 1
Mr. Raman, a resident individual aged 62 years, is engaged in the business of 15 manufacturing and sales of spare parts for motor bikes, as a proprietor. He prepares his accounts on mercantile basis. This business is carried out on the ground floor of a two storied commercial building owned by him, the written down value of which is 8 lakhs as on April 1, 2023. He prepares his accounts on accrual basis. The Statement of Profit and Loss for the previous year ended on March 31, 2024 shows a net profit depreciation) after debiting/crediting of 9.25 lakhs (before the following items: taxation and
(i) Travelling expenses includes 2,40,000 being expenditure incurred on a foreign tour to Taiwan for attending a business exhibition and meeting with vendors, out of which ₹ 40,000 is incurred in Indian currency and 2,00,000 in foreign currency. Mr. Raman has spent 10 days in Taiwan, out of which 4 days were utilized by him for attending marriage ceremony of a vendor's son.
(ii) Administrative expenses include 9,525 paid towards interest on delay in deposit of GST.
(iii) General expenses include a sum of 3,88,000 paid to a non-resident as fee for technical services without deduction of tax at source.
(iv) Fire insurance premium of unpaid till 31 March, 2024. 66,000 for the entire building remained
(v) Expenditure of 75,000, was paid to a scientific research association approved under Section 35. Out of₹ 75,000, ₹ 50,000 was utilised towards the purchase of land by the research association
(w) He let out first floor of his commercial building to Mr. Aman on April 1, 2023 and received rent of ₹ 35,000 per month, Municipal taxes ₹ 20,000 relating to the building were paid equally by both Mr. Raman, and Mr. Aman. Reut received was credited and municipal taxes of ₹ 10,000 (relating to ground floor) was debuted to the statement of Profit and less.
(vi) He sold a piece of land for ₹ 44 lakhs on 12 April, 2023. He had acquired the land for ₹ 40 lakhs on 1 January, 2022. The gain of ₹ 4,00,000 is credined to the statement of profit and loss.
(CII for FY 2021-22-317: FY 2023-24-348)
Additional Information:
(i) Mr. Raman purchased raw material from M/s. Paul Industries, a micro enterprises, for ₹ 49,000 on March 10, 10,2024. However, the payment so M/s. Paul Industries was made on April 5, 2024 by cheque. No written agreement for payment existed berween M/s. Paul Industries and Mr. Raman. Another supplier M/s. Kal Industries, a small enterprises, with whom also no agreement existed for payment, was paid ₹ 1,34,000 in cash on April 5, 2004 for purchase of raw material on March 31, 2004, Both Mis. Paul Industries and Mis. Kal Industries follow mercantile system of accounting,
(ii) Mr. Raman acquired a registered trademark on July 15, 2023 for ₹ 2,00,000. Mr. Raman started using this trademark for his business from January 15, 2004. Mr. Raman omitted to enter any transaction relating to this trademark in his books of accounts.
(ii) Mr. Raman bought a car for personal use on 12th April, 2020 for ₹ 5,40,000. He started using this car for business purposes from 01.04.2013. As on that day, the market value of the car was 72,10,000 Assume the rate of depreciation to be 15%.
(iv) He incurred ₹ 2,50,000 on the purchase of a new machinery to be used in the production of spare parts for motor bikes on May 15, 2023,
(v) He has paid tuition fees of ₹ 25,000 for the education of his daughter to a college.
(vi) During the year Mr. Raman has incurred ₹ 9,500 in cash for preventive health check-up where 5,000 was for himself and ₹ 4,500 was for his parents who are super senior citizens.
(vii) Donation paid to a registered political party by way of cheque ₹ 20,000.
Compute the total income and tax payable for assessment year 2024-25 by Mr. Raman under default tax regime and optional tax regime as per normal provisions of the Act. Which option is advantageous to Mr. Raman?
Answer :
Question 2 (A)
Mr. Madan, a citizen of India and the Karta of an HUF, is employed in M/s. PCS Pvt. Ltd. He is drawing monthly salary of ₹ 65,500 in India. On June 1, 2023 he purchased one residential house property in Mumbai for ₹ 18,00,000 in his individual capacity. The market value of the property is ₹ 32,00,000 and, value for the purpose of charging stamp duty is ₹ 23,00,000. On August 31", 2023 he was transferred to the branch office of M/s. PCS-Pvt. Ltd. in U.S.A. and he left India on September 1, 2023. The overseas branch paid him a salary of $ 2,500 per month in USA. He managed business of HUF from USA when he was not in India.
He had also gone out of India for 99 days and 201 days in previous years 2022-23 and 2021-22 respectively. He had never gone out of India prior to that.
He visited India from January 1, 2024 to January 15, 2024 for training on a project and received 15 days salary in India as per his Indian monthly salary before being transferred.
Mr. Rajeev, one of his friends, gifted him a sculpture in India on August 10, 2023. The market value is 45,100.
Determine the residential status of Mr. Madan and his HUF and compute gross total income of Mr. Madan for the assessment year 2024-25 assuming he opted out of the default tax regime. The value of one USD ($) may be taken as ₹70.
Answer :
Question 2 (B)
Answer the following:
(i) M/s. PQR & Co., a proprietary firm of Mr. Yogesh, paid of 30,500 to Mr. Amit, a resident individual aged 45 am an amount years, on June 1, 2023 towards fees for professional services. Subsequently, another payment of 60,000 was due to Mr. Amit on January 30, 2024. Tax was not deducted from both the transactions. Mr. Amit has filed his return of income for assessment year 2024-25 on May 2, 2024, taking into account professional fees from M/s. PQR & Co. and paid the taxes due on the income declared in the return of income.
What are the tax obligations in the hands of M/s. PQR & Co. on the assumption that the accounts of the firm are audited under Section 44AB of the Income-tax Act 1961?
(ii) Ms. Fastest Ltd. is an Indian car manufacturer. During the FY 2023- 24, it sold cars for 150 lakhs to Ms. Race LLP, a distributor of cars where the sale price of each car was 7.5 lakhs. The turnover for the FY 2022-23 of Ms. Fastest Ltd. was 15 crores and Ms. Race LLP was 8 crores. What shall be the TCS/TDS implications on Ms. Fastest Ltd. and Ms. Race LLP?
Answer :
Question 3 (A)
The particulars given below are of Mr. Radbey's incoпа (еде 47 у posted in a private company in Delhi, for the previous year 2033-34
(1) Basie Pay 35,000 per month till January 31, 2024, ₹ 40,000 pm from February 2024.
(ii) Dearness allowance 30% of basic salary (54% of DA forms part of retirement benefits)
(iii) Leave encashment for P.V. 2023-24-₹10,000.
(iv) He received salary for the month of April 2024 in advance on 31 March 2024. Also, he received an March 2023 on the same day. Arrear salary for the rent-files. month of
(v) His employer gave him a accommodation (fully furnished) in Delhi from This house 01.04.2019 is owned by his employer. During the previous year 2019-20, the perquisite value of such rent free furnished accommodation was valued at 39,000. The employer also provided him with the facility of a gardener to maintain this house. The salary of gardener paid by the employer was 1,000p.m. The furniture and appliances provided with the house were bought by the employer at an aggregate cost of ₹1,50,000 on 01.01.2020, Electricity and water bills of 4,000 р.м. for the said house were paid by the employer.
Cost Inflation Index
F.Y. 2019-20-289, F.Y. 2020-21-301, F.Y. 2023-24-348.
(vi) The employer also spent 50,000 on a refresher course for upgrading Mr. Radhey's skills
(vii) During the previous year his wife had been admined in a notified hospital for treatment of her kidney disease, the hospital bills amoanting to 3,50,000 were paid by the employer.
You are required to compute the taxable salary income of Mr. Radhey for the Assessment Year 2024-25 assuming that he has opted out of the default tax regime under Section 115BAC.
Answer :
Question 3 (B)
Raj a resident individual, aged 69 years sold an urban agricultural land for ₹ 75,00,000 to Mr. Vipul on December 15, 2023 when the stamp duty valuation of agricultural land was ₹ 95 lakhs. However, the 'agreement to sell the agricultural land wis entered on July 15, 2023 and Mr. Vipul gave ₹ 4 lakhs as advance through IMPS. The stamp duty valuation at the time of agreement was 85 lakhs. Mr. Raj paid 1% of sale consideration as commission to a broker. The land was purchased by him on May 15, 2002 for ₹ 10.85 lakhs and it was being used for agricultural purposes by him since its purchase.
Mr. Raj purchased another agricultural land in rural area on January 1, 2024 for ₹ 40 lakhs and this land was sold by him on March 12, 2024 for ₹ 45 lakhs and be invested the entire sale proceeds in fixed deposits with a nationalized bank on the same day,
Compute capital gain for assessment year 2024-25 if Mr. Raj exercises the option of shifting out of the default tax regime provided under Section 115BAC(1A)
Cost Inflation Index for: F.Y. 2002-03-105; Ε.Υ. 2023-24-348
Answer :
Question 4 (A)
Mr. Suraj. (39 years), his wife Megha (35 years) and minor sos Dev (12 years), provide the following details of their income/losses for the previous year 2023-24:
Mr. Suraj
(i) Salary received as a partner from a partnership firm - ₹ 6,15,000
He is a working partner in the firm and the salary is as per the limits prescribed under Section 40(b).
(ii) Income (loss) from house property:
Brought forward loss from House (let out) - ₹ 96,000
Current year loss from House-B (let out) - ₹ 2,30,000
(ii) Interest received on It relates to anced compensation - ₹ 2,00,000
It relates to transfer of a piece of land in the financial year 2018-19, Out of the above 35,000 relates to previous year 2023-24 and the balance relate to preceding previous year.
(iv) Gift from grandfather's younger sister by cheque - ₹ 1,25,000
(v) Dividend on listed equity shares of domestic companies (Gross)-250,000
(vi) On 1 December 2023, Mr. Suraj received ₹ 75 lakhs as maturity proceeds from his life insurance policy which was taken on 1" May 2012. He paid 6,00,000 as annual premium and the sum assured was 65 lakhs.
Mrs. Megha
(i) Current year loss from business. (She carried on this busleess with funds which Mr. Suraj gifted to her) - ₹ 8,10,000.
(ii) Mrs. Megha purchased a house property from her "Stridhan" and gifted the same to her minor son, Mr. Dev on 1st April, 2023 out of love and affection. The FMV of the house on the date of transfer was ₹ 51 lakhs.
Mr. Dev
Rent received from house property received from Mrs. Megha 35,000 p.m.
Compute total income of Mr. Suraj Megha and Mr. Dev for the assessment year 2024-25 assuming Mr. Suraj has decided to pay tax under default tax regime provided under Section 115BAC, whereas Mrs. Megha and Mr. Dev have opted out of the default tax regime. Briefly explain the reasons for the treatment of each item.
Answer :
Question 4 (B)
Answer the following:
(i) Vegetable Ltd. filed its return of Income for the AY 2023-24, on 15th December 2023. On 2nd January 2024, the accountant of Vegetable Ltd. realised that he had forgotten to claim a genuine business expenditure amounting to 15 lakhs. He wants to file revised return to claim such expenditure as the assessment is not yet completed. Whether the action of the accountant of Vegetable Ltd. is valid
(ii) Mahendra, a resident individual aged 45 years earned a salary income of 2 crores during the FY 2023-24, He also earned dividend from unlisted shares amounting to 4 Lakhs. He wants to file his return of income for the AY 2024-25 through a Tax Return Preparer. Can he do so?
Answer :
OR
Question 4 (B)
Rani, an Indian tesident aged 34 years did not file her return of income for the AY 2021-22, 2022-23 and 2023-24, She gives the following information regarding each of the AY-
AY 2021-22
(i) Tax payable on the total income of Rani - ₹ 14,50,000
(ii) TDS deducted - ₹ 5,00,000
AY 2022-23
castodynote.com
(i) Tax payable on the income of Rani - ₹ 5,60,000
(ii) TDS deducted ₹ 10,00,000
AY 2023-24
(i) Tax payable on the total income of Rani - ₹ 6,30,000
(ii) TDS deducted - ₹ 2,00,000
(iii) Interest payable under section 234A, 2348 and 234C - ₹ 90,000 (calculated till 31 May 2024)
(iv) Self-assessment tax paid - ₹ 1,00,000
She approaches you to file updated return under section 139(8A) on 16.5.2024. You are required to prepare a suggestion to be given to her in this respect. Your suggestion should include the financial aspect also (like payment of tax) briefly outlining the relevant provisions of the Income-tax Act.
Answer :
Section - B
Question 5 (A)
DEF Pvt. Ltd, a registered supplier of goods and services in Pune, Maharashtra, has furnished the following details for the month of January 2024. The turnover of DEF Pvt. Lad, was ₹3.2 crores in last financial year.
| Sr. No | Particulars | Amount (₹) |
| 1. | Intra state supply of taxable goods | 5,00,000 |
| 2. | FLtd. of Mumbai (unregistered) had promised to DEF Pvt. Ltd. in Oct 23 to complete contract within 3 months but they can't able to complete committed contract so DEF Pvt. Ltd. received consideration for non-performance of contract on time as decided by pre written agreement. | 2,00,000 |
| 3. | DEF Pvt. Ltd. had provided service of booking of flight tickets for employee of H Enterprise (Registered in Delhi) in the economy class from Bagdora (West Bengal) to Pune Maharashtra. | 20,000 |
| 4. | DEF Pvt Ltd had purchase goods worth 5,00,000 from R Ltd. (Registered in Gujarat) on 15.03.2023. Now R. Ltd. issued debit note on 15.01.2024 for post delivery service to DEF Pvt. Ltd. as per part of terms of sales. | 25,000 |
| 5. | DEF Pvt. had sold one of its unit in Purse as a going concern (with all goods and unexecuted orders) to H Ltd. (Registered in New Delhi) | 10,00,000 |
| 6. | DEL Pvt. Ltd. had provided service to Mr. Y (Registered in Punjab) to organise business exhibition in Dubai. | 5,00,000 |
| 7. | Interstate supply of service | 10,00,000 |
| 8. | Amount towards receipt of intra state services | 6,00,000 |
| 9. | Purchase of Confectionery items which are to be used to supply free of cost to customers in a customer meet organised by DEF Pvt Ltd. | 1,00,000 |
Opening balance of Input Tax credit at the beginning of Jan 2024,
CGST - ₹25,000
SGST - ₹25,000
IGST - ₹30,000
Additional Information:
(1) Rates of COST, SGST and 10ST are 9%, 9% and 18% respectively unless otherwise mentioned.
(2) Both inward and outward supplies are exclusive of taxes, where applicable.
(3) All the conditions necessary for availing the ITC have been fulfilled
From the information given above, compute the Output Tax liability and Input Tax credit available to DEF Pvt. Ltd., for the month of January 2024. Make suitable assumptions wherever required.
Answer :
Question 5 (B)
ABC Infra, is a partnership firm registered under GST. It furnishes the following details about services provided during the month of February 2004
| Particulars | Amount | |
| (i) | Consideration received from neighbouring Housing Cooperative Society as ABC Infra agrees to install effluent plant for treatment of wastewater even though there is no legal requirement to do so. | 5,50,000 |
| (ii) | Consideration received from distribution of passes for cricket match organized as firm's annual event. Total 500 passes have been distributed. | 2,42,506 |
| (iii) | Services given of booking air tickets in economy class for flight between Mumbai to Manipur. | 1,20,000 |
| (iv) | Services given for construction of buildings to State Government in relation to function entrusted to Municipality under article 243W of the constitution. Construction material used of 2,79,375 is included in the given figure. | 8,20,000 |
All supplies mentioned above are intrane supplies GST rates for COST, SOSTIGST9%9%, 8% pessively Compute the OST payable by the ABC infits for the month of February 2024.
Answer :
Question 6 (A)
Ms. T is registered dealer of Andhra Pradesh trading in different types of machinery and its related different types of service. There turnover for the preceding financial year 2022-20machinery was 1.32 Crones is was first year so they had ant started for providing service related to machinery. From FY 2023-24 they are planning provide repair and maintenance service of 6.25 Lakh for which they have to purchase some raw material of 5 Lakh from the other satell date they are purchasing within state only)
From the information given above examine whether Ms. I can opt for composition scheme under Section 10(1), 10(2A) or 10(2) of the CGST Act for FY 2023-24?
Answer :
Question 6 (B)
(i) Garima having its permanent residence in Bhavnagar, Gujarat purchased car from Kiara Motors of Jaipur, Rajasthan to take the advantage of lower registration charges and road tax. Garima took the delivery of the car from Jaipur and returned with car to her residence in Bhavnagar, Gujarat. Address of Garima recorded in the invoice issued by Kiara Motors mentions only the name of the state Le. Gujarat.
Garima is an unregistered person whereas Kiara Motors registered person under OST. Determine the place of supply for supply made by Kiara Motors to Garima.
(ii) Askar Advertisement Agency a registered person in Hag Maharashtra, wants to display the produsts of its client's et mong prominent places in different states. It took on rights to use the space on hoardings mounted on fixed surface attached to su, situated in Udaipur, Rajasthan and in Gwalior, Madhya Praded from G.N, Enterprise registered in state of Chhattisgarh. Askar Advertisement Agency has exclusive right to use the space and alto to manage the advertisements on the hoardings.
What will be the place of supply of services provided by the G.N. Enterprise to the Aakar Advertisement Agency?
Answer :
Question 7 (A)
Mohan, a registered person in Salem, Tamil Nadu, makes intra-state 5 supply of taxable goods amounting to 13,57,000 inclusive of OST to s Public Sector Undertaking (PSU). Consideration for same received in 5 equal instalments from PSU.
Tax rate applicable: CGST 9%, SGST 9%, IGST 18%
What will be your view with respect to applicability of TDS provisions as per Section 51 of CGST Act 2017 regarding above transaction ?
What is the period by which TDS is required to be deposited to the Government account?
Answer :
Question 7 (B)
Every registered person executing works contract shall keep separate accounts for works contract under CGST Act Rules, 2017.
List the details to be maintained.
Answer :
Question 8 (A)
Describe the provision related to Import of services by a registered person as prescribed in the Section 7(1)(b), 7(1)(c) and Schedule I of CGST Act 2017.
Answer :
Question 8 (B)
(i) List out category of persons who are exempted from the E-invoicing provisions.
(ii) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by certain reasons. What are they?
Answer :
OR
Question 8 (B)
Commissioner has notified some specified persons to maintain additional accounts or documents as mentioned in Rule 56 of CGST Rules 2017, Agent as defined under Section 2(5) of the CGST Act 2017 is one of them.
List the additional accounts or documents to be kept by agent.
Answer :
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