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Income from growing trade or commercial products like jute, cotton, etc. is an agro
income
Income from growing flowers and creepers is an agro income
Plants sold in pots are an agro income provided basic operations are performed.
Any remuneration received by a partner from a firm engaged in agriculture operation is
an agro income
Interest on capital received by a partner from a firm engaged in agriculture operation is
an agro income
Instances of Non-
Non-agricultural (non-
(non-agro) Income
Salary received by an employee from any business having agriculture income is non-
agro income
Dividend received from a company engaged in agricultural operation is non-agro
income
Income from salt produced by flooding the land with seawater is non-agro income
Income from fisheries, poultry farming, dairy farming, butter & cheese making, etc. is
non-agro income
Breeding & rearing of livestock is non-agro income
Interest received by a moneylender in the form of agricultural produce is non-agro
income
Profit on sale of standing crops after harvest, where such crops were acquired through
purchase is non-agro income
4.) Raja received dividend of ` 10,000 from an Indian company. Discuss the taxability
taxability of the
dividend so received in the hands of Raja.
Ans: The dividend so received from Indian company is exempt u/s 10(34) in the hands of
Raja.
3.) Mention any two losses which cannot be carried forward for non-
non-submission of loss return.
Ans : The two losses which cannot be carried forward for non-submission of loss return are
Business Loss and Capital Gain loss.
Tax Planning: Tax planning is a way to reduce tax liability by taking full advantages
provided by the Act through various exemptions, deductions, rebates and relief. In other
words, it is a way to reduce tax liability by applying script and moral of law.
Tax Evasion: Tax evasion is the illegal way to reduce tax liability by deliberately
suppressing income or sale or by increasing expenses, etc. which results in reduction of
total income of the assessee. Tax evasion is illegal both in script and moral. It is the
cancer of modern society and work as a clog in the development of the nation.
Exemption to the general rule that income of the previous year is taxed in the assessment
year: This is the general rule that income of the previous year of an assessee is charged to
tax in the immediately following assessment year. However, in the following cases, income
of the previous year is assessed in the same previous year :
1.) Income of non resident assessee arising from shipping business (Sec. 172)
2.) Income of person leaving India either permanently or for a long period (Sec. 174)
3.) Income of bodies formed for short duration (Sec. 174)
4.) Income of a person who is likely to transfer his properties to avoid tax (Sec. 175)
5.) Income of a discontinued business (Sec. 176)
Assessment Year [Sec 2(9)]: It means the period of 12 months commencing on the 1st day of
April every year. It is the year just after previous year in which income earned in the
previous year is charged to tax.
Previous Year [Sec. 3]: It means the financial year immediately preceding the Assessment
Year. Income earned in a year is assessed in the next year. The year in which income is
earned is known as Assessment Year.
Person [Sec 2(31)]: The term Person includes the following : (a) an individual (b) a Hindu
Undivided Family (HUF) (c) a Company (d) a Firm (e) an Association of Person (AOP) or a
Body of Individuals (BOI) (f) a Local authority and (g) Every artificial juridical person.
Association of Persons (AOP): An AOP means a group of persons who join together for
common purposes. Every combination of person cannot be termed as AOP.
Body of Individuals (BOI): BOI means a group of individuals who join together for common
purposes whether or not to earn income.
Heads of Income [Sec. 14]: According to section 14 of the Act, all income of a person
shall be classified under the following five heads:
Salaries
Income from house property
Profits and gains of business or profession
Capital gains
Income from other sources
7.) Mr. Gautam Sinha has income under the head house property, salary and income
from other sources.
sources. He is to submit return of income for the first time for the assessment
year 2015
2015-16. What is the due date of submission
submission of return by him?
Ans:
Ans: The due date of submission of return by Mr. Gautam Sinha is July 31, 2015
8.) Mr. X having income from house property ` 1,00,000 fails to file his return by 31.07.2015
31.07.2015.
He seeks your advice till what time can he furnish return?
Ans: Since assessee failed to file the return within the time limit hence he can file a belated
return within one year from the end of relevant assessment year or before the assessment is
completed, which ever is earlier. He can file the return before 31.03.2017 or date of
completion of assessment, which ever is earlier.
9.) What is PAN?
Ans: Permanent Account Number (PAN) is an alpha-numeric ten characters code given in
form of a laminated card to a person by income tax department for the purpose of
identification of the assessee. A person can have only one PAN.
Scrutiny Assessment [Sec 143(3)] : If AO considers it necessary to ensure that the assessee
has not understated his income, declared excessive loss or under-paid the tax, he can make
a scrutiny in this regard. AO shall serve a notice (before expiry of 6 months from the end of
the financial year in which the return is furnished) requiring the assessee, on a particular
date, to produce any evidence in support of the return. After collecting such information and
evidence as he deems fit and on the basis of such information and evidence so collected, he
shall pass an assessment order. Such order shall be treated as regular assessment order.
Assessment u/s 143(3) should be completed within 21 months from the end of the relevant
assessment year.
Best Judgement Assessment [Sec 144] : As per section 144(1) a best judgment assessment
can be made by the Assessing Officer, if any person :
Fails to make a return as required under Section 139(1) or has not filed a return
under section 139(4) or section 139(5);
Fails to comply with all the terms of a notice issued under section 142(1), or fails
to comply with a direction for audit of accounts issued under section 142(2A) ; or
Having made a return, fails to comply with all the terms of a notice issued under
section 143(2) of the Act.
The Assessing Officer has to make the best judgment assessment after taking into account
all the relevant material gathered and after giving the assessee an opportunity of being
heard by issuing a show cause notice on the assessee as to why a best judgment
assessment should not be made. However, in cases where a notice under section 142 (1)
has already been issued prior to the best judgment assessment, it will not be necessary to
give the assessee an opportunity of being heard. It is also incumbent on the Assessing
Officer to inform the tax payer the basis of his conclusion for arriving at best judgment
income figures, viz, basis of assessment.
16.) Mention
Mention the transaction which do not constitute inter state sale under the CST Act?
Ans: The transactions which do not constitute sale are:
Mortgage
Pledge
Hypothecation
Charge
19.) Mention two basis of charging tax under Central Sales Tax Act.
Ans: The basis of charging tax under Central Sales Tax Act is
There must be a dealer
Such dealer must carry on a business
Such dealer has made an inter state sale of goods
5.) What do you mean by Input Tax credit and reversal of credit?
Or
What do you mean by Input
Input Tax Credit as per the WB VAT Act, 2003?
Ans : Input tax credit or rebate in relation to any period means setting off of the amount of
input tax or part thereof paid by a registered dealer against the amount of output tax
payable by the same registered dealer.
Reversal of credit : Reverse credit means reversal or returning by a dealer by way of
reduction from the amount of input tax credit or input tax rebate for a period the amount of
input tax credit or rebate availed by him during any period which he was not entitled to or
become disentitled to the enjoyment of such input tax credit or input tax rebate.
21.) What is turnover of sale as per WB VAT Act?
Ans: Turnover of sales in relation to any period means the aggregate of the sale prices or
parts of sale prices received or receivable by a dealer in respect of sales as per this act and
as per section 2(g) of the CST Act made during such period.
2.) What are the conditions when excise duty is leviable or chargeable?
Or
Excise
What are the basic conditions for levying excise duty under the Central Excise Act, 1944?
Ans : The conditions when excise duty is leviable or chargeable are:
There must be a manufacture
Manufacture must be India excluding Special Economic Zone(SEZ)
The manufacture must result in goods
Such goods must be excisable goods
10.)
10.) Define Wholesale Dealer as per Central
Central Excise Act
Ans : As per section 2(k) of the Act, Wholesale dealer means a person who buys or sells
excisable goods in wholesale for the purpose of trade or manufacture and includes a broker
or commission agent.
12.) If the rate of duty of an excisable item is zero%, the item can be called non
non--excisable
goods. Do you agree?
Ans:
Ans: If the rate of duty is zero %, the item can not be called non excisable goods because it
is mention in the first and second schedules of CETA 1985.
13.) Is the production of excisable goods in China factory by an Indian Company dutiable in
India under the Central Excise Act, 1944.
Ans: The production is not dutiable in India as goods are not manufactured in India.