“IGNITE ACADEMY”

CS Executive – DT – Test – PGBP + FIRMS + AGRICULTURE INCOME – NS – 2023

1. Dave & Co. made a turnover of 160 lakh during the FY 2022-23. It received 90 lakh by
way of RTGS and net banking. The balance of sale proceeds was realized in cash before
31st March, 2023. Dave & Co. wants to admit income U/S 44AD of the Income-tax Act,
1961. How much is the presumptive income of Dave & Co. for the AY 2022-23.
(a) 9,60,000 (b) 12,80,000 (c) 11,00,000 (d) 11,90,000
2. X & Company acquired know how on 10 November, 2022 for 5 Lakh. How much is the
th

amount of depreciation allowable u/s 32 of the Income-tax Act, 1961 for the AY 2023-
24?
(a) 50,000 (b) 62,500 (c) 1,25,000 (d) 75,000
3. Which out of the following transactions are deemed to be speculative transactions?
(a) Purchase and Sale of shares otherwise than by actual delivery
(b) Forward contracts
(c) Trading in derivatives or com modity derivatives
(d) Hedging Contract in respect of Raw Materials or Merchandise
4. Ramnath has 4 heavy goods vehicle (gross unladen weight of each vehicle was 13,000
kilograms) and 1 light vehicles (gross weight was less than 12,000 kilograms). He
operated the vehicles on contract basis to a paper manufacturing company throughout
the PY 2022-23 and received 90 lakhs as hire charges as per contract. How much is the
Income chargeable to tax under applicable presumptive provision?
(a) 7,80,000 (b) 7,14,000 (c) 7,20,000 (d) 4,50,000
5. Which of the following expenditure is liable for disallowance for contravention of
section 40A(3) read with rule 6ABB?
(a) Payment made in cash to Central or State Government exceeding 10,000 in a day
(b) Payment in cash in villages having no banking facility for purchase of raw material being
agricultural produce
(c) Retrenchment compensation paid to employee 40,000
(d) Deposit of cash of 22,000 directly into the bank account of the supplier for purchase of
goods
 SECTION B – Descriptive Questions
1. Ramji Ltd., engaged in manufacture of medicines (pharmaceuticals) furnishes the following
information for the year ended 31.03.2023:
S.No Particulars
1 Municipal tax relating to office building 51,000 not paid till 30.09.2023.
2 Patent acquired for 20,00,000 on 01.09.2022 and used from the same month.
3 Capital expenditure on scientific research 10,00,000 which includes cost of land
2,00,000.
4 Amount due from customer X outstanding for more written off as than 3 years bad
debt in the books 5,00,000.
5 Income tax paid 90,000 by the company in respect of non-monetary perquisites
provided to its employees.
6 Provident fund contribution of employees 5,50,000 remitted in July 2023.
7 Expenditure towards advertisement in souvenir of a political party 1,50,000.
8 Refund of sales tax 75,000 received during the year, which was claimed as
expenditure in an earlier year.
State with reasons the taxability or deductibility of the items given above under the Income-
tax Act, 1961.
Note: Computation of total income is not required. [8]
2. Sanjay furnishes following particulars of Income from his business for the Previous Year
2022-23.
Particulars
1 Net profit as per profit and loss account 72,000 after charging the following:
A Depreciation on building 31,000
B Provision for discount on debtors 40,000
C Private household expenses 50,000
D Charity (unapproved) 7,000
E Computer for scientific research 60,000
F Payment of expenses made through bearer cheque 25,000
G Security deposit 16,000
H Audit fee paid in cash 25,000
I Patent purchased during the year 75,000
2 Opening stock 66,000 valued at 10% above cost and closing stock 72,000 valued
at 19% below cost.
3 Income credited to profit and loss account include:
A Bank interest on fixed deposits 9,000
B Refund of Excise Duty 18,000 earlier allowed as deduction
C Bad debts recovered 5,000.
Compute Total Income of Sanjay and his Tax Liability if he is assuming Senior Citizen
depreciation on building as per the Income -tax Act, 1961 is 50,000. [7]
3. Discuss giving reason regarding admissibility or otherwise of the following expenditures
while computing income under the head Income from Business or Profession: [4]
(a) Expenses incurred in connection with a branch, the business of which was discontinued
during the previous year.
(b) Penalty paid to customs authorities for importing prohibited goods which gave a huge
profit to the business.
(c) Interest paid on an amount borrowed to acquire a plant for business use upto the date
on which the plant is put to use.
(d) Rent paid to daughter of the assessee for her building used as office premises of the
business. The building was actually gifted to her by the assessee (father) at the time of
her marriage.
(You need not rewrite the statements. Write only admissible/Not admissible with reasons).
4. State with brief reasons whether the following losses sustained during the year while
carrying a business be allowable while computing the income under the head "Profits and
gains of business or profession" [3]
(a) Robbery or dacoity and loss of money in a bank branch;
(b) Embezzlement of cash by the cashier;
(c) Loss due to non-recovery of advance given for supplies.
5. Explain the conditions regarding the assessment of partnership firm as per section 184 of
the Income Tax Act, 1961. Also mention the consequences if the conditions of section 184
are not complied with. [4]
6. Explain the scheme of partial integration under Agriculture income. [4]