.

-C.U. QUESTIONS &ANSWERS 247

2021 Monours

Direet Tax'
Group A

[Link] areturn is considered to be defective? Whatisloss return? State the consequences of non-
filing of loss return.

Ans. See answer to the following questions

Qn. 2(a) of 2020 (Gen.)
Qn. 3 of 2008 (Hons.)
Qn. 4 of 2014 (Hons.)

2. Mr. Goswami submitted his retürn on 25 July, 2022 for the assessment year 2022-23. The
following particulars are furnished by him for the previous year 2021-22:
'

Tax payable on assessed income 1,03,950.

Tax deducted at source 36,450
Advance taxes paid as under
15th June, 2021 Nil
15th September, 2021 18,500
15th December, 2021 16,125
15th March, 2022 25,250
You are required to compute the interest, if any, payable by the assessee.
Ans. (Assessed Tax) = 1,03,950

(Less : TDS) 36,450

(Net Assessed Tax) =, 67, 500
Total Advance Tax paid =7 59,875/
(Nil+18,500 +16,125 +25,250)
90% of Net Assessed Tax (t 60,750-)
Hence, Mr. Goswami is liable to pay interest u/s 234B.
Interest u/s 234B @1% p.m. or part of a month

Payable on Payable for

Assessed Tax 1,03,950 1st April, [Link] the date of submission
Less: TDS 36,450 ofreturn 25h July 2022;
Adv. Tax paid 59.875S 96,325 i.e. 4 months
7,625
Rounded off u/s 119A 7,600
= 7,600 x 4 months * 1% p.m. = 7 304
Interest u/s 234B
Calculation of Interest pavableu/s234C for deferment of AdvanceTax instalments.
Adv. Tax liability =Net Assessed Tax+7 61,500/-
248 - TAXATION-II

Advance Tax instalments & Interest

Due Amount Amt. Paid Shortfall Interest
u/s 234C
Date Payable
(Till the Due Dt.) (Upto the Due Dt.)
10,100 x 1%
15/6/21 15% of 67,500 Nil 10,125-Nil
= 10,125 = 10,125
x3months
(r/off 10,100) = 303
30,375 18,500 11,800x 1%
15/9/21 45% of 67,500 Nil +18,500
= 18,500 = 11,875 x 3 months
30,375
= 7 354
(r/off 11,800)
16,000 x 1%
15/12/21 75% of 67,500 18,500 16,125 50,625 34,625
= 50,625 = 34,625 = 16,000 x 3 months

=T 480

15/3/22 100% of 67,500 34,625+25,250 67,500 59,875 7,600x 1%

= 67,500 = 59,875
7,625 x 1 month

(r/off 7,600) = 76
Total Interest payable u/s 234C 1213
3. Write short notes on
(a) TAN
(b) Summary Assessment
(c) Self Assessment
(d) TDS from interest on securities.
Ans. (a) See answer to Qn. No. 2 of 2008 Gen.

b) See answer to Qn. No. 2 of 2013 Hons.

c) See answer to Qn. No. 3 of 2013 Gen.

(d) Interest on securities: Tax is deducted10% from interest oflisted debentures and non
listed debentures by the person responsible for making payment of interest at the time of
payment (in cash/cheque/bank draft).
However, tax is not deducted for the following interests:
() Interest on government bonds and securities.
(i) Interest payable on:
any security of the Central/State Govt.;
4% National Devence Bond, 1972;
44% National Defence Loan, 1968;
4% National Defence Loan, 1972;
National Development Bonds;
7-year National Saviongs Certificate (IVh issue);
6% Gold Bond, 1977 (upto maximum nominal value of Bonds held for 10,000/-)
7% Gold Bond, 1980(-do-).
(ii) Interest on Debentures in a company in which public are substantially interested, provided the
debentures are listed in a stock exchange recognized in India, when interest is less than 2,500/
and is paid by account-payee cheque.
Giv) Interest on deposits with Co-operative Land Mortgage Bank (CLMB), Co-operative Land
 -C.U. QUESTIONS & ANSWERS 249
Development Bank (CLDB).
(V) lnterest Payable to Life Insurance Corpn. of India or General Insurance Corpn. of India or any
other Insurance Company on securities
owned by them.
4. Mrs. Fatema (resident of India aged 64 years) furnishes the
ended March 31, 2022. following particulars for the year
Total income
excluding lottery income:7 15,10,000
Lottery income received during April 2021:
Tax deducted at source
63,000 net of tax 30%
(including TDS on lottery income)
during the year is 7 51,600
Compute the instalments along with the dates of advance tax
payble.
Ans. Computation ofAdvance Tax instalments
Tax on Total Income
(exeluding Lottery income)
First 3,00,000 Nil
Next 7 2,00,000 5% 10,000
Next 7 5,00,000 20% 1,00,000
Balance 5,10,000 @30% 1,53,000
15,10,000 2,36,000
Add Tax on lottery income 27,000
(63,000x x30%)
70
2,90,000
Add Health & Edu. cess @ 4%
11,600
3,01,600
Less: TDS
51.600
Advance Tax liabilityy 2,50,000
Due dates Amount of Instalments
15-6-2021 15% of 2,50,000 37,500
15-9-2021 30%of 2,50,000 75,000
15-12-2021 30% of 2,50,000 =75,000
15-3-2022 25% of 2,50,000=67,500
2,50,000

Group B

Answer any one question

Mr. Soren is employed in a private limited company in Kolkata, a resident aged 42 years,
furnishes the following particulars of his incomes and outgoings for the previous year 2021-22.
() Gross income from salary 7 34,20,000
(i) Professional tax deducted by the employer from his salary per month 7 200.
() Loss from self occupied
house? 1,20,00
(iv) He earns the following incomes during the yo
250 - TAXATION-II

Savings barik interest7 15,300

Interest on fixed deposits with banks7 1,52,000
Dividend from domestic companies 7 1,10,000
(v) Long-term capital gain on sale of urban land7 10,42,000
(vi) Short-term capital loss on sale of gold z 37,000
(vii) He has invested 7 1,30,000 in PPF
(vii) He has paid medical insurance premium as follows
On his own health z 13,200; On his wife's health 15,3000
On his father's health (father's age 75 years) ? 35,000
(ix) He has made a donation ofz 20,000 to Prime Minister's National Relief Fund.
Compute his total income and tax liability. Ignore section 115BAC.
Ans. Computation of Total Income & Tax Liability of Mr. Soren for the PY 2021-22; AY 2022-23

Salary (Gross) 34,20,200

Less: Deduction u/s 16(ia) 50,000
Deduction us 16(ii) (P. Tax) 2,400 52,400
Net Salary 33,67.800
Loss from House Property (1.20.000
Long Term Capital Gain 10.42.000
Less:Short Term Capital Loss 37.000
Capital Gains 10,05.000
Savings bank interest 15,300
Fixed Deposit interest 1,52,000
Dividend from domestic companies 1,10,000
Income from Other Sources 2,77.300
Gross Total Income 45.30,100
Deductions
US 80C for contribution to PPE 1,30,000
US 80D for med. ins. premiums
On own health 13,200
On wife's health 15,300
28,500
(Restricted to) 25,000
On father's health 35,000 60.000
US 80G for donation to PMNRF 20,000
U/S 80TTA for savings interest 10,000 2.20.000
Total Income 43,10,100
Tax liability
On LTCG 10,05,000 @ 20% 2,01,000
On Balance of Total ncome
On first 2,50,000 Nil
On next 2,50,000@5% 12,500
On next 5,00,000 20% 1,00,000
 - C.U. QUESTIONS &ANSWERS- 251

On balance 23,05,000 30%

6,91,530
(43,10,100 10,05,000 10,00,000) 10,05,030
Add: Health & Education Cess @4% 40,201
10,45,23 1
Tax liability (R/OM_ 10,45,230

Alternative Solution to Qn. 5 under new tax systemn

Computation of Total Income Computation of Tax Liability
Salary (Gross) 34,20,200 Tax on LTCG 2,01,000
Loss from Self Occupied HP Nil (10,05,000 x 20%)
(LTCG-STCL) 10,05,000 Tax on Balance (36,97,500)
Income from. O.S. Ist 2.5 Lac Nil
2.77,300
GTI
47,02,5002nd 2.5 lac @ 5% 12,500
Less: 80 Deductions Nil 3rd 2.5 lac 10% 25,000
Total Income 47,02,500 4th2.5 lac @15% 37,500
Note Tax liability as per old Sth2.5 lac 20% 50,000
system is less than tax 6th 2.5 lac @ 25% 62,500
liability as per new Balance.21,97,500
system. ( 10,45,230 @30% 6,59,250
710,89,60). Hence the 8,46,750
old system should be 10,47,750
followed. Add : HEs @4% 41,910
Tax Liability 10,89,660
6. Pand Q are partners of a firm sharing profits and losses in the ratio of 3 : 2. The profit and loss
account of the firm for the year ended March 31, 2022 is as follows

Particulars Particulars

To Salaries to partners By Gross Profit 2,09,730

72,000 By Interest from bank fixed 14,370
P
Q 21,000 deposits
To Interest on Capital @20% p.a.
P 24,000
Q 13,200
To Commission to Q 15,000
To Trade expenses 27,000
To Depreciation 30,000
To Net Profit 21,900
2,24,100 2,24,100
252 TAXATION-II

Compute total income and tax linbility of the firm considering the following :

(a) The firm satisfies the conditions of section 184 and 40(b);
(b) Depreciation as per 1.T. Rules amounts to 7 48, 000.
(c)Trade expenses include 5,250 being the amount paid as penalty for violation of custom's
regulation.
Ans. Computation of Total Income & Tax Liability of the Firm (of P&Q) for the PY 2021-2022; AY
2022-2023)

Net Profit as per P/L A/c. 21,900

Add Expensess disallowed
Salaries to partners (72,000 +
21,000) 93,000
Interest on Capital in excess of 12% 14,880
(24,000+ 13,200) x 8/20
Commission to Q 15,000
Depreciation debited 30,000
Penalty for violation of custom's regulation 5,250 1,58,130
1,80,030
Less: Depreciation u/IT Rules 48,000
Interest from Bank FD 14,370 62,370
Book Profit 1,17,660
Less: Remuneration to Partners 1,08,000
(Salary to P&Q93,000 + Commission toQ
15,000 = 1,08,000)

(Fully allowed, as total remuneration is below

7 1,50,000/, irrespective of Book Profit)
Taxable Profit from Business 9,660
Income from other Sources (FD interest) 14,370
Gross Total Income 24,030
Deductions from GTI Nil
Total Income 24,030
Tax30% 7,209
Add Health & Edu. Cess 4% 288
Tax liability of the Firm 7,497
r/off u/s 288B 00
 -C.U. QUESTIONS &ANSWERS 253

Indirect Tax
Group C

7. Write short notes on

(a) Input tax
(6) Output tax
(c) Reverse charge
(d) Registered person.
Ans. (a) See answer to
Qn. 6 (or) (b) of 2019 Gen.
(b) See answer to Qn. 6
(or) (b) of 2019 Gen:
(c) See answer to Qn. 8 of 2019 Hons.
(d) Registered person
GST registration is mandatory for-
Any büsiness whose turnover in a financial year exceeds the threshold limits for exemption from
registration.
GST Registration by Type of Taxable Person
Every person has to apply for registration in every State in which he is liable, within thirty days
from the date on which be becomes liable to registration.
Registration number in GST will be PAN based and hence, having PAN would be a prerequisite
for obtaining registration.
The assessee must obtain separate registration for each State, as registration under GST will be
State-wise,
The assessee has an option to obtain a separate registration for each of the 'business vertical" in
the same State.

8. (a) What do you mean by Composite Supply and Mixed Supply? State the taxability of
Composite Supply and Mixed Supply.
(b) State the nature of supply and applicable GST Rate in case of the following supplies
(i) A mobile company supplies Mobile Phone |GST 18%| along with charger |GST 12%|
and headphone |GST 24%|1.
(i) A trader supplies Diwali gift box comprising dry fruits |GST 5%1, cakes |GST 12%|
and fruit juice |GST 18%|1.
Ans. (a) See answer to Qn. 8(or)6) of 2019 Gen. & Qn. 7(b) of 2019 Hons.

(b) Nature of Supply GST rateapplicable

because supply 18%
(i) Composite supply,
of mobile phone is the principal supply, (The rate for Principal supply)
and charger and head-phone are supplied
in conjunction with the principal supply.
18%
(ii) Mixed supply, because dry fruits,
cakes & fruit juice are not naturally (The rate of fruit juice, which is highest)
bundled in the gift box.
 254 - TAXAT ION-II
9. (a) How the aggregate turnover in case of composition scheme is determined" State the GST
rates applicable in case of composition scheme.
(b) How the time of supply is determined in the following cases?
i) Supply of goods
(i) Advance from customer.
Ans. (a) Sec answer to Qn. 10(©) of 2019 Hons. & On. 10(or){b) of2019 Gen.
(b) (i) Time of Supply for Goods
Time of Supply for Goods is the
earliest of the following
The date of issue of
invoice
by the supplier; or
The last date on which the taxpayer is réquiredto issue the invoice with respect to the supply; or
The date on which the supplier receives thë
payment with respect to the
supply.
1) The time of supply in case of advance from customer is the date of advance from customer.
10. (a) What do you mean by Tax Invoice and Bill of Supply?
(b) Mention any two supplies which are not covered under GST Law.
(c) State the diferences between direct tax and indirect tax,
Ans. (a) Tax invoice and Bill
Supply
GST Invoice or bill is a list of
goods sent or services provided, along with the amount due for
payment. A tax invoice is generally issued [Link]árge the tax and pass on the input tax
GST-registered business has to provide GST-compliant invoices to the clients for sale credit. A
of goods
and/or services. On the other side, the
seller will get GST-compliant purchase invoices from its
GST-registered vendors.
A registered supplier, whose aggregate turnover in a [Link] 500 crore, has to prepare e-
invoice inrespect ofsupply of goods/services/or both, to another registered person [Link] respect
of his exports. (An SEZ is not required to
prepare e-invoice.)
E-invoice to be i_sued' after obtaining an Invoice Reference Number. This number can be
is
obtained when the supplier uploads the relevant
Portal. The E-inyoíce is valid only when it
information on the Common GST Electronic
has invoice reference number, and it is registered on
the E-invoice system.
(b) See answer to Qn.
6(b) of 2019 Gen..
C) Seeanswer to Qn.6 of2019 Hons.
11. (a) From the following information, compute value of
supply and GST
registered dealer in West Bengal for thè month of November, 2022 payable by
Mr. P, a

Price of the goods supplied within West

Bengal |excBuding 4,00,000 GST|
Following items. are not included in the above price
(i) Installation charges 20,000
Gi) Transport charges 710,000
(ii) Packing charges 5,000
(iv)Subsidy from Govt. of West Bengat 15,000
(V) Subsidy, from a NGO 7 12,000
Applicable GST rate CGST -6%, SGST 6%.
 C.U. QUESTIONS& ANSWERSS 255
(b)From the followving information, state the nature of GST applicable [Link] of the followin8
supplies
(i) A of Kolkata supplied goods to B of Durgapur.
(i) C of Bihar supplied goods to D of Tamilnadu.
(ii) F of Chandigarh
supplied goods to G of Chandigarh:
Ans. (a)Yalue of supply & GST payable by Mr. P, a regd. dealer in W.B. for the month of NOV.
2022.

Price of goods
supplied (excluding GST) 4,00,000
Add Installation charges 20,000
Transport charges 10,000
Packing charges 5,000
Subsidy from NGO 12,000 47,000
Assessable Value 4,47,000
CGST @6% on 4,47,000 26,820
SGST @6% on 4,47,000 26,820
GST payable 7 53,640
Nature of GST
(b) ) Supplyfrom Kolkatato'Durgapur-CGST& sGST
(ii) Supply from Bihar to TamilnaduIGST
(ii) Supply from Chandigarh to Chandigarh-cGST &UTGST
12. Mr. R, a GST registered dealer supplied the following information for the month of Decenmber
2021: .'

(i) Input Tax credit balance as on 01.12.2022

IGST 2,00,000
CGST 1,35,000
SGST 7 1,35,000
(i) Goods supplied (excluding GST) duringDecember, 2022):
Inter-state supply 20,00,000
Intra-státe supply 40,00,000
i) Goods purchased (Excluding GST) during December 2021
Inter-state supply 6,00,000
Intra-state supply 720,00,000
GST rate applicable as follows Iboth on purchases and sales|

IGST 12%
CGST 9%
SGST 9%
Compute GST payable and ITC to be carried forward (if any) assuming Mr. R. opted for
utilisation of unadjusted IGST credit against CGST and SGST in the ration of 1: 1.
 256 TAXATION-II

of GST payable & ITC to [Link] forward.

Ans. Computation
Output Tax for CGST SGST
IGST
goods supplied_ 40 lac x 9%
20 lac x 12% 40lac x 9%

2,40,000 3,60,000 3,60,000

Input Tax Credit
Opening Balance 2,00,000 1,35,000 1,35,000
Generated from current
20 lac x 9% 20 lac x 9%
purchase during Dec. 2022 6 lac x 12%
= 1,80,000
72,000 = 1,80,000
Total ITC available 2,72,000 3,15,000 3,15,000
Net GST payable
Output Tax payable 2,40,000 3,60,000 3,60,000
IGST credit utilized 2,40,000 16,000 16,000
Nil 3,44,000 3,44,000
CGST& SGST credits utilized 3,15,000 3,15.000
Net GST payable through Nil 29,000 29,000
electronic cash ledger
13. (a) What is the taxable event under the Customs Act?
(b) Define Territorial Water as per the Customs Act.
(c) Write a short note on Anti Dumping Duty.

Ans. (a) Taxable Event

Under Customs Act, 1962, customs duty can be levied when entry/exit of goods take place
physically into India or from India. This impliesthat when an Indian merchant executes delivery
of goods from say Japan to Germany without bringing goods in India or without taking goods
out of India, shall not bë liable to pay customs duties in India.
Taxable event in case ofimports are as follows

When Gods are directly cleared for home consumption-Taxable event arises when the bill of
entry for home consumption is filed. It means that the import takes place when the goods reach
the customs barriers and the bill ofentry for home consumption is filed.
When Goods first entered into warehouse and later cleared for home consumption-Taxable event
arises when the bill of entry for home consumption (i.e., ex-bond bill of entry) is filed andno
when "into the bond" bill of entry is filed. It means that the import takes place when the goods
are cleared from warehouse and that is the taxable event.
Taxable event in case of export is when goods cross territorial waters of India and hence the
export is complete [Section 12]. It may be noted that the export is not complete if the vessel
sinks within territorial waters.
(b) See answer to Qn. 13(c) of 2020 Gen.
() See answer to Qn. 11(b) of 2019 Gen.
 257
-C.U. QUESTIONS &ANSWERS.
14. From the following information, caleulate assessable value and duty payable

UK Pound
FOB value of Goods 23,000
Air freight 5,250
Insurance 400
Landing charges S50
Transportation charges from
airport to warehouse in Tamilnadu 10,000
Exchange rate notilicd by CBIC is z 72 per UK Pound.
BCD-10%, SWS-10%, 1GST-12%
Ans. Computation of Assessalble Value & Custom Duty Payable
Amount Amount

UK
Pound UK Pound
FOB value for goods 4,600 23,000
Add: Air Freight (lower of :)
Actual amount 5,250
20% of FOB 4,600
Insurance 400 5,000
CIF in UK Pound 28,000
Amount Amount

Assessable Value
(CIF in Indian 7)
(28,000 x 7 72) 20,16,000
Add: BCD (10% of 20,16,000) 2,01,600
SWS (10% of BCD) 20,160

2,21,760
22,37,760
Add: IGST (12% on 22,37,760) 2,68,531
Custom Duty payable 25,06,291
 258 TAXATION-II

2021 General

Direct Tax
Group A

1. (a) Mr. Arijit Roy, an individual, earns Income from Salary and 'Income from other sources
totalling 16,00,000 during the previous year 2021-22. You are asked to answer the following
questions
(i) In which 'Form' he is required to file his return of income?
(i) What is the due date of filing of his return of income?
i ) If his taxable income is 7 6,00,06o0 and he can not file his return of income within the due
date, then how much 'Fees' will have to be paid by him?
(6) Explain the provisions of the Income Tax Act relating to deduction of tax at source (TDS)
from interest on securities.
Ans. (a ) Return of Income is to be submitted in Form ITR-I (SAHAJ)
ii) Due date for filing of Return is 31/7/2022.
(ii) Total Income is7 6 Lac, and Return is submitteed not within
31/7/22; Fees u/s 234F will be:
7 5,000/- (if return is filed within 31/12/22)
10,000/- (if return is filed after 31/12/22).
(b) See answer to Qn. 3(d) of 2021 Hons.
2. Write short notes on
(a) Revised Return
(b) PAN
(c) Serutiny assessment.
(d) Belated Return.
Ans. (a) See answer to Qn. 2(b) of 2009 Hons.
(b) See answer to Qn. 3 of 2009 Gen.
(c) See answer to Qn. 6 of 2014 Gen.
(d) See answer to Qn. 2 of 2008 Hons.

3. (a) From the following information, Compute the amount of advance tax
Ganguly on specified dates as per Income Tax Act payable by Mr.
for the Assessment Year 2022-23.
Gross Salary 7 6,50,000
Income from other sources z 60,000
Deduction U/S 80C 1,50,000
Tax dedueted at souree ? 12,000
(b) Mention any two cases where quotation of PAN is
necessary.
 -[Link] &ANSWERS- 259

Ans. (a) Computation of Advance Tax

2023. payable by Mr. Ganguli on due dates 10r tne
A. 0aa

Gross Salary
6,50,000
Less: Deduction u/s 16(ia) 50,000
Net Salary, 6,00,000
Add Income from Other Sources
60,000
GTI 6,60,000
Less: Deduction u/s 80C
,50,000
Total Income 5,10,000
Tax on Total Income
Tax on 2,50,000
Nil
Tax on 2,50,000 5% 12,500
Tax on 10,000
@20% 2,000 14,500
Add Surcharge Nil
Tax +Surcharge 14,500
Add: HEC4% 580
Tax Liability
15,080
Less: TDs 12,000
Remaining Tax Payable 3,080
Comment: Mr. Ganguli is not liable to pay any Advance Tax because the amount payable is
below 10,000/-. This amount can be paid any time before submission of Return of Income
(duedate 31/7/22)
(6) See answerto Qn. 1 of 2009 Hons.
4. (a) From the following information, caleulate interest payable U/S 234A
Due date of submission of return 31.07.2022
Return actually submitted on 15.10.2022
Tax payable? 1,54,600
Tax deducted at source 7 1,12,300
(b) Write short note on interest payable U/S 234C.
Ans. (a) Computation of Interest payable u/s 234A.
Interest u/s 234A is payable because Return of Income ha_ been submitted after due date.
Due date = 31/7/2022
Actual date when return is submitted = 15/10/2022

1% p.m. for 3 months.

So, interest will be charged
Interest will be charged on (Tax payable minus TDS)
i.e. 1,54,600 7 1,12,300 7 42,300/
Hence, interest u/s 234A=7 42,300 x3% =7 1,269/-
(b)
Interest is payable by an assessee for deferment of advance tax instalments u/s 234C
Such interest is payable on any shortfll in the payment of advance tax instalments.
Such interest is calculated 1% p.m. for 3 months each time on shortfall of Ist instalment,
260 -TAXATION-II.

2nd instalment, & 3rd instalment. But the interest 1% p.m. is charged for one month only on

the shortfall of 4th instalment.

Before charging interest, the shortfall amnounts are rounded offto the nearest multiple of z 10

u/s 119A.
Total interest payable u/s 234C is to be paid mandatorily by the assessee before he/she
furnishes Return of Income.
The relevant protion of the answer to Qn. 2 of 2021 Honours is useful to be seen.

Group - B

5. [Link] Majid (age 50 years) furnished the following information for the P.Y. 2021-22

Income from Salary (Gross) 8,52,400

Professional tax deducted from salary 2,400
Long term capital gain on sale of building 60,000
Short term capital loss on sale of Jewellery 10,000
Dificend from XYZ Ltd. (an Indian Company) 4,000
Interest on Bank Deposits
-on Fixed deposit account 14,000
-on Savings bank account 6,000
Received from lottery (net after TDS @31.2%) 34,400
During the previous year 2021-22 he made the following payments :
(a) Life insurance premium on own life 7 15,000
(b) Medical insurance premium on own health 7 12,000 and on the health of spouse
11,000 (by cheque)
(c) Own contribution to Recognized Provident Fund 30,000
(d) Deposit in Public Provident Fund account 7 1,20,000
(e) Donation to National Defence Fund z 5,000
Determine the taxable ineome and tax liability of Mr. Abdul Majid for the assessment
year 2022-23.
Ans. Taxable Income and tax liability of Mr. Abdul Majid for the AY 2022-2023.

Gross Salary 8,52,400

Less: Deduction u/s 16(ia) 50,000
ws 16(ii) 2,400 52.400
Net Salary
8,00,000
Long term Capital Gain 60,000
Less: Short term Capital Loss 10,000
Capital Gain 50,000
Dividend from xyz Ltd. 4,000
Bank interest (on FD a/c) 14,000
Bank interest on Saving alc 6,000
 -[Link] &ANSWERSS- 261

Lottery income (gross) 34.400 x

100/69.2) 50,000
Income from Other Sources
74,000
Gross Total Income 9,24,000
Less: Deduction:
US 80C LI Premium 15,000
Own contribution to RPF 30,000
Deposit to PPF 1,20,000
1,65,000
(Restricted to) 1,50,000
U/S 80D Med. Ins. Premium
on own health 12,000
On spouse's health 11.000 23,000
US 80G Donation to NDF 5,000
(100% permitted)
US 80 TTA Interest received on Saving A/c. 6.000 1,84,000
Total Income 7,40,000
Tax liability
Tax on LTCG (@ 20% on 50,000) 10,000
Tax on Lottery income (30% on 50.000) 15,000
Tax on balance (6,40,000)
On first 2.50,000 Nil
On next 2,50,000 @ 5% 12,500
28,000 40,500 65,500
On baance 1,40,000 @ 20% 2,620
Add: HEC@4%
Tax Liability
68,120
the year ended 31.03.2022 is given below. In the
Account of the firm for
6. The Profit and Loss
firm, X, Y and Z are equal partners.
Particulars
Particulars 2,50,000
30,000 By Gross Profit b/d
To Bonus to Z 15,000
By Bank Interest
To Salaries to Partners Profit sale of land 42,500
By on

X-50,000 (computed long term capital gain)

75,000
Y-25,000
15,000
To Commission to Z
To Interest on Capital15% p.a.
X-11,500
Y-8,000 22,500
Z-3,000 50,000
To Sundry expensess
1,15,000
To Net Profit |3,07,500
3,07,500
262 - TAXATION-II.
total income and tax liability of the firm for the Assessment Year 2022-23 after
Compute
considering the following for income tax liability
(a) Sundry expenses include 1,000 being the payment made of the

firm.
(b) Deduction U/S 80G 10,000.
X,Y &Z for the AY 2022-2023.
Ans. 1otal Income and tax liability of the firm of

Net Profit as per P/L A/c 1,15,000

Add: Expenses disallowed

Bonus, Salaries, Commission 1,20,000
(30,000 +75,000+15,000)
22,500
Intereston Capital @15% p.a..
Income Tax liability of the firm 1,000
Donation allowed u/s 80G 10.000 1,53.500
(assumed included in S/Expenses). 2,68,500
Less: Expenses allowed
Interest@12% p.a. (22,500 x 12/15) 18,000
Less: Incomes under other heads
Bank Interest 15,000
LTCG 42.500 57,500 75,500
Book Profit 1,93,000
Less: Remuneration allowed to Partners
(Bonus, Salaries, Commission)
(Actual amount is below 1,50,000/-; hence fully allowed) 1,20,000
Taxable Profit 73,000
Add: Long Term Capital Gain 42,500
Income from ohter sources
(BankInterst) 15,000 57,500
Gross Totál Income 1,30,500
Less: Deduction u/s 80G 10,000
(Assumed 100% of donation is deductible).
Total Income 1,20,500
Tax liability of the firm
Tax20% on LTCG (42,500) 8,500
Tax 30% on balance
of Total Income (78,000) 23400 31,900
Add: HEC 4% 1,276
33,176
Tax liability r/off u/s 288B 33,180
 C.U. QUESTIONS &ANSWERS 263

Indirect Tax
Group-C

7. (a) Mention any three taxes that are subsumed or merged with GS1.
not
(b) Mention any two
goods that are kept outside the
(c) Define the following purview of GS1.
terms as per Central Goods and Services Tax Act
() Aggregate Türnover. (ii)
Input tax.
Ans. (a) See answer to Qn.
6(b) 2019 Gen.
of
()Two goods not covered under GST are petroleum products, and alcohol for numan
consumption.
C)See answer to Qn. 6 (or)(a) and 6 (or)(b) of 2019 Gen.
8. Write short notes on
(a) Inward Supply
(b) Outward Supply
(c) Registered Person
(d) Place of Business.
Ans. (a) Inward Supply
It means receipt of goods or services or both whether by purchase, acquisition or any other
means with or without consideration.
(b) Outward Supply
It means a supply of godds or services or both, wherther by sale, transfer, barter, exchange,
license, rental, lease ordisposal or any other mode, made or agreed to be made by such person
in the course of furtherance of business.
(c) GST registered person includes the following:
)A business, having turnover in a financial year exceeding the exemption limits, and hence
registered under GST system.
i) Every person, having registration under Excise, VAT, Service Tax etc, and consequently
registered under GST system.
(ii) A casual taxable person/non-resident taxable person/agent of a supplier/e-commerce
operator, etc.
(d) Place of business
Place of business includes
A place from where the business is ordinarily carried on, including a warehouse, a godown,
any other place where a taxable person stores his goods, or provides or receives goods and/or

services.
A place where a taxable person keeps his books of account
A place where a taxable person engaged in business through an agent.

9. (a) Discuss the differences between direct tax and indirect tax.
(b). From the following information, caleulate GST Payable and GST
to be carried forward (if any) for the month of April 2022.
month of April, 2022,
()Input tax credit available for the
CGST 75,300, SGST 7 1,15,200
 264 -TAXATION-II

(i) Output tax payable for the said month

CGST 95,000. SGSTz 95,000. 1GST ? 10.000.
Ans. (a) See answer to Qn. 6 of 2019 Hons.
(6) Computation of GST payable and GST to be carried forward
for themonth of April 2022
3 output taxes are payable. We consider then one by one.
CGST output tax payable 95,000
Less: CGST ITC available 75,300
CGST Payable 19, 700
This amount could not be reduced any more because there is no IGST ITC available.

SGST output tax payable 7 95,000

Less: Adjustment from SGST ITC 7 95,000
SGST payable Nil
IGST output tax payable 7 10,000
Less: Adjustment from SGST ITC available 7 10,000
IGST payable Nil

ITC to be carried forward

SGST ITC op. balance 71,15,200
Less: Amounts utilized (95,000+ 10,000) 1,05,000
SGST ITC to be e/f 710,200

10. (a) State which type/types of GST would be leviable under each of the following cases

) supplied goods to Mr. C of Chennai.

Mr. M of Mumbai
(i) Mrs. P of Punjab supplied goods to Mrs. Q of Punjab.
ii) Mr. W of Andaman supplied goods to Mr. B of Andaman.
(b) What do you mean by tax invoice and bill of supply?
Ans.(a)i) GST leviable for supply from Mumbai to Chennai is IGST, because it is an inter-Statesupply
(i) GST leviable for supply from and to Punjab are CGST and SGST, because it is an intra-State
Supply.
intra-
(iii) GST leviable for supply from and to Andaman are CGST and UTGST, because it is an
Union Territory supply
(b) Tax invoice and Bill Supply
GST Invoice or bill is a list of goods sent or services provided, along with the amount due for
on the inpur tax credit. A
payment. A tax invoice is generally issued to charge the tax and pass
sale of goods
GST-registered business has to provide GST-compliant invoices to the clients for
invoices from its
and/or services. On the other side, the seller will get GST-compliant purchase
GST-registered vendors.
A registered supplier, whose aggregate turnover in a year exceeds 500 crore, has to prepare
another registered person or in
e-invoice in respect of supply of goods/services/or both, to
 265
--
C.U. QUESTIONS &ANSWERS.
respect of his exports. (An SEZ is not required to prepare e-invoice.)
This number can be
-nvoice Is to be issued aftger obtaining an Invoice Reference Number.
obtained when the supplier uploads the relevant information on the Common GST Electronic
Portal. The E-invoice is valid only when it has invoice reference number, and it is registered
on the E-invoice system.
Bill of Supply
A bill of supply is similar to a GST invoice except for that bill of supply does not contain any

tax amount as the seller cannot charge GST to the buyer.

ABill of Supply is issued in case where tax cannot be charged

Registered person is selling exempted goods/services,
Registered person has opted for composition scheme,
Give an example for each.
11. (a) What do you mean by 'composite supply' and 'mixed supply'?
an example.
(b) Explain the concept of 'reverse charge' with the help of
examples, see the answer to Qn. 8(6)1) and
Ans. (a) See answerto Qn. 10(a) and (b) of 2020 Hons. For

(ii) of 2021 Hons.

Hons.
(b) See answerto Qn.8 of 2019
12. (a) () What do you mean by Composition scheme?
scheme?
ii) Who opt for Composition
can

(b) () What is exempt supply? 'zero rated supply'.

supply' and
(ii) Distinguish between 'exempt
Ans. (a)i) See answer to Qn. 10(a) of 2019 Hons.
(ii) See answer to Qn. 10(a) of 2019 Hons.
Hons.
to Qn. 11(a) of 2020
(bi) See answer
Hons.
See answer to Qn. 11(a) of 2020
(ii)
Customs Act on
notes under
13. Write short
Customs Water.
(a) Indian
(b) Protective Duty.
(c) Anti-Dumping Duty.
Customs Waters
the sea up to the limit of
Indían contiguous
Ans. (a) the waters extending into
means to the Territorial
Indian Customs Waters harbour, creek, tidal river (according
zone of India,
and includes any bay, gult,
Customs Act, 1962.)
1976). (section 2(28) of and contiguous zone (CZ)
Waters Act, Territorial Waters (11TW)
covers Indian further 12
Waters (ICW) and CZ extends of
Indian Customs nautical miles from the base-line,
ICW extends to a total of 24
12 n.m..
1TW extends up to
well. Therefore
as territorial wate
outer limit of the
n.m. from the
coast.
of Indian
from the base-line
Hons.
See answer to Qn. 13(a) of 2020
b)
(c) See answerto Qn.
11(b) of 2019 Gen.
266 - TAXATION-II

14. (a) From the following information, determine the assessable value:

US S
Price charged by the exporter (FOB) 25,000
Frelght from importing country to India by air 6,250
Transit Insurance (not ascertainable)
Loading and unloading charges at the place of importation 625
Freight paid on transportation from Indian airport to warehouse 75,000
Exchange rate notified by CBIC is 7 80 per US S
(b) What do you mean by tasable event under the Customs Act?

Ans. Computation of Asséssable Value under Customs Act.

US S
Price charged by exporter (FOB) 25,000
Air Freight from exporting country 5,000
(Actual cost US S 6,250 restricted to 20% of FOB, US S 5,000)
Transit Insurance (1.125% of FOB)
281.25
Carriage-Insurance-Freight (CIF) 30,281.25
CIFconverted to Indian 22,22.500
(30,281.25 x 80)
Add: Loading & Unloading charges in India (1% of CIF valu)
Assessable Value
22.225
22,44.725
Note: Freight paid on transportation from Indian airport to
warehouse is not tobeincludedin Assessable Value
b) Taxable Event
Under Customs Act, 1962, customs duty can be levied when entry/exit of goods take placz
physically into India or from India. This implies that when an Indian merchant executes delivery
of goods from say Japan to Germany without
out of India, shall not be liable to
bringing goods in India or without taking govUs
pay customs duties in India.
Taxable event in case of imports are as follows
When Goods are directly cleared for home consumption-Taxable event arises when the bill or
entry for home consumption is filed. It means that the import takes place when the gocds
the customs barriers and the bill of entry for home rea
consumption is filed.
When Goods first entered into warehouse and later
cleared for home
event arises when the bill of entry for home consumption (i.e., ex-bond billconsumptior-Tavatik
of entry) is tiled ant
not when "into the bond" bill of entry is filed. It means that the import takes place whet ihe
goods are cleared from warehouse and that is the taxable event.
Taxable event in case of export is when goods cross territorial waters of lndia and hece tte
export is complete [Section 12]]. It may be noted that the export is not complete it he vesse
sinks within territorial waters.