CA IPCC Exam Sample Paper

MOCK TEST
Category-C
Full Syllabus
IPCC
A.Y.2013-14
Total No. of Question – 7] [Total No. of Printed Pages –9
Time Allowed – 3 Hours Maximum Marks – 100
Answers to questions are to be given only in English except in the case of candidates
who have opted for Hindi medium. If a candidate who has not opted for Hindi
medium, answers in Hindi, his answers in Hindi will not be valued.
Question No.1 is compulsory
Attempt any five questions from the remaining six questions.
Wherever required, suitable assumptions may be made by the candidate.
Working notes should form part of the answer.
1(a). Mrs. Purvi is a Chartered Accountant in practice. She maintains her accounts on cash
basis. Her income and Expenditure account for the year ended March 31, 2013 reads as
follows:
Expenditure ` Income ` `
Salary to Staff 5,50,000 Fees earned:
Stipend to articled
Assistants 37,000
Audit 7,88,000
Incentive to Articled
Assistants 3,000
Taxation Services 5,40,300
Office rent 24,000 Consultancy 2,70,000 15,98,300
Printing and Stationery 22,000 Dividend on shares of
Indian Companies(Gross)
10,524
Meeting, Seminar and
Conference
31,600
Income from unit Trust
of India
7,600
Purchase of car 80,000 Honorarium received
from Various
Institutions for valuation
of answer papers
15,800
Repair, Maintenance
And petrol of car 4,000 Rent Received from
Residential flat let out
85,600
Travelling expenses 35,000
Municipal Tax paid in
respect of house
Property
3,000
Net profit 9,28,224
17,17,824 17,17,824
Marks
10

2
Other information:
(i) Allowable rate of depreciation on motor car is 15%
(ii) Value of benefits received from clients during the course of profession is
`10,500.
(iii) Incentives to articled assistants represent amount paid to two articled
assistants for the passing IPCC Examination at first attempt.
(iv) Repairs and maintenances of car include ` 2,000 for the period from
01.10.2012 to 30.09.2013.
(v) Salary include `30,000 to a computer specialist in cash for assisting Mrs.
Purvi in one professional assignment.
(vi) The total travelling expenses incurred on foreign tour was `32,000 which was
within the RBI norms.
(vii) Medical Insurance premium on the health of dependent brother and major
son dependent on her amounts to `5,000 and `10,000 respectively paid in
cash.
(viii) She invested an amount of `10,000 in National Saving Certificate.
Compute the Total Income and Tax Payable of Mrs. Purvi for the Assessment Year
2013-2014.
1(b). Rishabh Professionals Ltd. is engaged in providing services which became taxable with
effect from July 01, 2012. Compute the service tax payable by Rishabh Professionals
Ltd. on the following amounts (exclusive of service tax) received for the month of
March, 2013:-
Particulars Amount
(`)
Services performed during March 2013 5,00,000
Services by way of renting of residential dwelling for use as residence 1,50,000
Market Value of free services rendered to the friends 20,000
Advance received in March,2013 for services to be rendered in July,
2013
(The agreement got terminated in April, 2013. Hence, no services were
rendered in July,2013. However, a sum of ` 3,50,000 was refunded in
June, 2013)
5,00,000
Other receipts 12,00,000
Marks
4

3
1(c). Compute net VAT liability of Rishi from the following information:
Particulars ` `
Raw materials from foreign market (Including Import duty
@ 20% plus EC)
- 1,23,600
Raw material purchased from local market
Cost of raw material 2,50,000
Add: Excise duty @ 16% 40,000
2,90,000
Add: VAT @ 4% 11,600 3,01,600
Raw material purchased from neighbouring State
(Including CST @ 2%)
51,000
Storage and transportation cost 9,000
Manufacturing expenses 30,000
Rishi sold goods to Madan and earned profit @ 12% on the cost of production. VAT
rate on sale of such goods is 4%.
Marks
4
1(d). Briefly explain the “Exemption available to small scale service providers” in reference
to service tax.
Marks
2
2(a). Mr. X is a Dealer Registered in Delhi Value Added Tax Act, 2004 and also under
Central Sales Tax Act, 1956 and he has submitted the informations as given below:
(i) Purchased Goods A from Delhi `1,00,000 inclusive of VAT @ 4% and sold the
goods in Delhi for `1,50,000 inclusive of VAT @ 4%.
(ii) Purchased goods B from U.P. for `2,00,000 inclusive of central sales tax @ 2% and
sold goods in Delhi for `2,50,000 inclusive of VAT @ 12.5%.
(iii) Purchased goods C from Delhi for `4,00,000 inclusive of VAT @ 12.5% and sold
the goods to a registered dealer in Orissa for `4,75,000 inclusive of central sales tax @
2%
(iv) Purchased goods D for `5,00,000 in Delhi inclusive of VAT @ 12.5% and sold the
goods for `5,50,000 to an unregistered dealer in Punjab inclusive of central sales tax @
12.5%.
(v) Purchased goods E from Madhya Pradesh for `3,00,000 inclusive of central sales
tax @ 1% and sold goods in Maharashtra for `3,50,000 inclusive of central sales tax @
1%.
(vi) Purchased goods F from Delhi `7,00,000 inclusive of VAT @ 1% and the goods
were sold to an unregistered dealer in Maharashtra for `7,50,000 inclusive of central
sales tax @ 1%.
(vii) Purchased goods G for `6,00,000 in Delhi inclusive of VAT @ 12.5% and goods
were stock transferred to some other state.
(viii) Purchased goods H for `8,00,000 in Delhi inclusive of VAT @ 4% and goods
were exported for `8,50,000 and no VAT was charged (because as per section 6 Central
Marks
8

4
Sales Tax Act, 1956, CST cannot be charged in case of export sale.)
(ix) Purchased goods I for `9,00,000 in Delhi inclusive of VAT @ 12.5% and sold the
goods to a manufacturer in SEZ for `10,50,000 and no VAT was charged.
Show the tax treatment for VAT and also compute his income tax liability for the
assessment year 2013-14.
2(b). Compute capital gains in the following situations for the assessment year 2013-14:
Asset Gold Land Residential
house
Personal
Motor Car
Date of purchase 01.07.1978 01.04.1980 01.07.2010 01.05.2003
Cost price 3,00,000 5,00,000 7,00,000 2,00,000
Cost of improvement 20,000 1,00,000 3,00,000 Nil
Year of improvement 1979-80 1980-81 2010-11 2006-07
Fair market value on
01.04.1981
2,90,000 5,50,000 N.A. N.A.
Date of Sale 01.01.2013 01.01.2013 01.01.2013 01.01.2013
Full value of consideration 30,00,000 32,00,000 15,00,000 1,80,000
Marks
4
2(c). State with reasons, whether tax deduction at source provisions are applicable to the
following transactions and if so, the rate of tax deduction:
(i) X & Co. (Firm) engaged in wholesale business assigned a contract for construction
of its godown building to Mr. Ravi, a contractor. It paid `25,00,000 to Mr. Ravi as
contract payment.
(ii) Y & Co. engaged in real estate business conducted a lucky dip and gave Maruti car
to a prize winner.
(iii) An Insurance Company paid `45,000 as Insurance Commission to its agent Mr.
Hari.
(iv) AB Ltd. allowed a discount of `50,000 to XY & Co. (a firm) on prompt
(immediate) payment towards supply of automobile parts.
Marks
4
3(a). Mr. Nixon, an American citizen, is appointed by a multi-national company to its branch
in New Delhi in 2009. Mr. Nixon has never been to India before this appointment. He
arrives in Bombay on 15th
April, 2009 and joins the New Delhi office on 20th
April,
2009. His wife and children join him in India on 20th
October, 2009. The company
allotted him a leased residence for purposes of his stay. This residence is occupied by
him from the beginning of October, 2009.
On 10th
February, 2010, he is transferred by his employer, on deputation basis, to be
the Regional Chief of his employer‟s operations in South East Asia having
headquarters in Hongkong. He leaves New Delhi on 11th
February and arrives in
Hongkong on 12th
February, 2010. Mr. Nixon leaves behind his wife and children in
India till 14th
August, 2011, when they leave along with him for Hongkong. Mr. Nixon
had come to India earlier on 15th
June, 2011, on two months‟ leave. The members of
Marks
6

5
the family occupied the residence till date of departure to Hongkong.
At the end of the period of deputation, Mr. Nixon is reposted to India and joins the
New Delhi office of his employer as Chief of Indian operations on 2nd
February, 2013.
In what residential status Mr. Nixon will be assessable, for the various years, to income
tax in India?
3(b). (i) Write a note on administration of service tax.
(ii) List the documents to be submitted alongwith the first service tax return.
Marks
3+3
3(c). Mr. Tony has estates in Rubber, Tea and Coffee. He derives income from them. He has
also a nursery wherein he grows plants and sells. For the previous year ending
31.03.2013, he furnishes the following particulars of his sources of income from estates
and sale of Plants.
You are requested to compute the taxable income and tax liability for the assessment
year 2013-14.
`
(i) Manufacture of rubber 5,00,000
(ii) Manufacture of coffee grown and cured 3,50,000
(iii) Manufacture of tea 7,00,000
(iv) Sale of plants from nursery 1,00,000
Marks
4
4(a). Mr. X has submitted information given below.
i) Income from owning and maintaining of race horse ` 2,00,000.
ii) Income from owning and maintaining of race camels ` 1,00,000.
iii) He had winning of ` 1,60,000 from horse race on 01.12.2012 and winning
from camel race `1,80,000 on 07.12.2012.
iv) He purchased lottery tickets of `10,000 on 01.02.2013 and had winning of
`2,00,000 on 12.02.2013.
v) He has received Royalty of book of literary nature @ 50% of print price of `
600 and total copies sold are 2,000
vi) He has paid advance tax as given below:
Upto 15.09.2012 ` 30,000
Upto 15.12.2012 ` 80,000
Upto 15.03.2013 ` 1,30,000
Balance was paid on 10.06.2013
Compute tax liability for the A.Y 2013-14 and interest under section 234A, 234B and
234C.
Marks
5

6
4(b). Write a note on Signing of Return of Income of all the assessee. Marks
3
4(c). (i) How will a taxable service be valued when the consideration thereof is not wholly
or partly in terms of money?
(ii) Write a note in brief on Provisional Payment of Service Tax.
Marks
2+2
4(d). (i) Under what circumstances registration can be cancelled under VAT?
(ii) Briefly explain the income variant of VAT.
Marks
2+2
5(a). (i) Nathan Aviation Ltd. is running two industrial undertakings, one in a SEZ (Unit S)
and another in a normal area (Unit N). The brief summarized details for the year
ended 31.03.2013 are as under:
(` in lacs)
S N
Domestic turnover 10 100
Export turnover 120 Nil
Gross profit 20 10
Less: Expenses and depreciation 7 6
Profits derived from the unit 13 4
The brought forward business loss pertaining to Unit N is `2 lacs. Briefly compute
the business income of the assessee.
(ii) Explain with brief reason whether the return of income can be revised under
section 139(5) of the Income-tax Act, 1961 in the following cases:
(i) Defective or incomplete return filed under section 139(9).
(ii) Belated return filed under section 139(4).
(iii) Return already revised once under section 139(5).
(iv) Return of loss filed under section 139(3).
Marks
4+4
5(b). ABC partnership firm, is engaged in providing a taxable service. For the quarter ended
on 31st
March 2013, its gross receipts were ` 18, 00,000 (no amount has been received
by firm up to 31-12-2012 during F.Y. 2012-2013). The break-up of these receipts are
as follows:
Month in which services are performed Receipt
(`)
July, 2012 (includes ` 1,00,000 for the services in relating to betting) 4,00,000
Marks
4

7
August, 2012 (includes ` 1,25,000 for the services rendered within the
Indian territorial waters)
3,00,000
January, 2013 (includes ` 1,75,000 for services rendered to Reserve
Bank of India)
5,00,000
February, 2013 (includes ` 1,50,000 for services rendered in the State of
Jammu & Kashmir)
6,00,000
In the financial year 2011-12, ABC partnership firm had paid `2,47,200 as Service Tax
(@12.36%). State the amount of Service Tax Liability for the quarter ended on 31st
March, 2013.
5(c). (i) What are the different rates under VAT system?
(ii) State whether the following are true or false giving reasons to substantiate your
answer:
a) Under VAT, the tax is payable on the first sale price.
b) VAT would increase the working capital requirements and the interest
burden.
Marks
2+2
6(a). Mr. X has taken a loan of `10,00,000 from S.B.I @ 10 % p.a. on 01.07.2008 for
construction of one residential house which was completed on 01.07.2010. It was let
out @ ` 55,000 p.m. w.e.f 01.04.2012 and Mr. X has paid Municipal tax of `20,000
though the amount due is `30,000.
He has repaid Principal amount of `70,000 on 01.07.2012.
He has Agricultural income of ` 3,00,000 and unadjusted loss of house property of P.Y.
2003-04 `10,000 and P.Y. 2004-05 `21,000
He has invested `10,000 in NSC and `5,000 in Public Provident Fund and `5,000 in Post
Office 5 Year Time Deposit.
Compute his Income Tax Liability for the A.Y. 2013-14.
Marks
4
6(b). Define the following as per Point of Taxation of Rules,2011?
(i) Date of Payment as Per Rule 2A
(ii) Define Rule 5 of POT Rules 2011?
Marks
2+2
6(c). (i) Enlist the installments of advance tax and due dates thereon in case of
companies.
(ii) Define “Relative” as given in the taxability of Gift?
Marks
2+2
6(d). Ashok, purchased raw material „A‟ for `30,00,000 plus VAT @ 4%. Out of such raw
material 60% was used for manufacture of taxable goods and the remaining for
manufacture of goods which are exempt from VAT.
Another raw material „B‟ was purchased for `15,00,000 on which VAT was paid @
1%. Entire raw material „B‟ was used for manufacture of taxable goods only.
The entire taxable goods were sold for `50,00,000 plus VAT @ 12.5%.
Marks
4

8
Compute VAT liability of Ashok on the assumption that there was no opening or
closing inventory.
(i) Note: Ashok is not a dealer who opted for Composition Scheme.
7(a). From the following details compute the total income of Siddhant of Delhi and tax
liability for the Assessment Year 2013-14:
`
Salary including dearness allowance 3,35,000
Bonus 11,000
Salary of servant provided by the employer 12,000
Rent paid by Siddhant for his accommodation 49,600
Bills paid by the employer for gas, electricity and water
provided free of cost at the above flat
11,000
Siddhant was provided with company‟s car engine capacity 1.6 litre (self driven)
also for personal use and it is not possible to determine expenditure on personal
use and all expenses were borne by the employer.
Siddhant purchased a flat in a Co-operative Housing Society for `4,75,000 in April,
2006, in Delhi, which was financed by a loan from Life Insurance Corporation of
India of `1,60,000 @ 15% interest, his own savings of `65,000 and a deposit from a
nationalised bank for `2,50,000 to whom this flat was given on lease for ten years.
The rent payable was `20,000 per month. The following particulars are relevant:
`
(a) Municipal taxes paid 4,300
(per annum)
(b) Society charges for passage lights, watchman‟s
salary
1,900
( per annum)
(c) Insurance 860
(d) He earned `2,700 in share speculation business and lost `4,200 in cotton
speculation business.
(e) In the year 2006-07 he had gifted `30,000 to his wife and `20,000 to his son
who was aged 11. The gifted amounts were advanced to Mr. Rajesh, who was
paying interest @ 19% per annum.
(f) Siddhant received a gift of `25,000 each from four friends.
(g) He contributed `5,600 to public provident fund and `4,000 to Unit Linked
Insurance Plan.
(h) He received national award for humanitarian work from the Central
Government in the form of a land whose fair market value is `5,00,000 as on
31st
March, 2013.
Marks
12
7(b). During the year ended 31.3.2012, Kohli & Co. , running a coaching centre, has
collected a sum of ` 10.2 lacs as service tax, ` 70,000 was met through Cenvat credit
and the balance was paid by cheques on various dates. The details pertaining to the
quarter ended 30.6.2012 are as under:
Marks
4

9
Particulars Amount
(`)
Market value of free coaching rendered 20,000
Coaching fees collected from students (Service tax collected separately) 14,50,000
Advance received from a college for coaching their students, on
30.6.2012.
However, no coaching was conducted and the money was returned on
12.4.2013
3,00,000
Determine the Service Tax Liability for the quarter and indicate the date by which the
service tax has to be remitted by the assessee.

CA IPCC Exam Sample Paper

More Related Content

What's hot (16)

Viewers also liked (20)

Similar to CA IPCC Exam Sample Paper (20)

Recently uploaded (20)

CA IPCC Exam Sample Paper