{"id":23338,"date":"2023-05-01T17:55:47","date_gmt":"2023-05-01T12:25:47","guid":{"rendered":"https:\/\/gstguntur.com\/?p=23338"},"modified":"2023-05-01T17:55:47","modified_gmt":"2023-05-01T12:25:47","slug":"profits-and-gains-of-business-or-profession-ca-inter-tax-question-bank","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/profits-and-gains-of-business-or-profession-ca-inter-tax-question-bank\/","title":{"rendered":"Profits and Gains of Business or Profession \u2013 CA Inter Tax Question Bank"},"content":{"rendered":"

Profits and Gains of Business or Profession \u2013 CA Inter Tax Question Bank<\/a>\u00a0is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

Profits and Gains of Business or Profession \u2013 CA Inter Tax Question Bank<\/h2>\n

Question 1.
\nState with reason, whether the following statements are true or false with regard to the provisions of the Income-tax Act, 1961 for the
\nAssessment year 2021-22:
\n(a) Rural branches of the Cooperative banks are not allowed to claim provision for bad and doubtful debts.
\n(b) Depreciation is allowed only when it is claimed. (Nov 2008, 2 marks each)
\nAnswer:
\n(a) False: Sub clause (a) of Section 36(1 )(viia) allows the Co-operative banks to claim deduction for provision for bad and doubtful debts in respect of advances made by rural branches of such banks. However the deduction should not exceed 10% of the aggregate average advances made by the rural branches of such banks computed in prescribed manner.<\/p>\n

(b) False: Section 32 on depreciation provides that deduction on account of depreciation shall be made compulsorily, whether or not the assessee has claimed the deduction in computing his total income.
\nHowever, in this view, in Supreme Courts pronouncement in CIT v\/s Mahendra Mills reported in 109 Taxman 226, it was held that an assessee has an option to claim depreciation and when he does not claim it, the Assessing Officer cannot thrust it upon him.
\nDepreciation need not be claimed as expenditure. But needs to be compulsorily deducted to compute next year opening WDV.<\/p>\n

\"Profits<\/p>\n

Question 2.
\nAnswer the following with regard to the provisions of the Income-tax Act, 1961 :
\nCan an Assessing Officer make a request for withdrawal of approval which was granted to an institution by National committee for carrying out eligible project or scheme, eligible u\/s 35AC of the Income-tax Act, 1961 ? (Nov 2008, 4 marks)
\nAnswer:
\nExpenditure on eligible projects or scheme [Sec. 35AC]
\nWithdrawal of approval: Approval can be withdrawn if a few conditions are satisfied. The following points should be noted:
\nConsequences in the hands of payer: Deduction under Section 35AC shall not be denied merely on the ground that after the contribution made by the assessee to the institution mentioned in the Section 35AC the approval granted under this institution has been withdrawn, in other words, contribution to institution is qualified for deduction even if after the date of making contribution, the approval granted to the institution is withdrawn.<\/p>\n

Question 3.
\nAnswer the following questions with regard to the Provisions of the Income tax Act, 1961 :
\nState the concessions granted to transport operators from 1st October, 2011 onwards in the context of cash payments under Section 40A(3) and deduction of tax at source under Section 194-C. (May 2010, 4 marks)
\nAnswer:
\nSection 40 A (3) provides for disallowance of exPenditure incurred in respect of which payment or aggregate of payments made to a person in a day exceeds \u20b9 10,000, and such payment or payments are made otherwise than by account payee cheque or account payee bafk draftor ECS through Bank account or through such other prescribed eleotronic modes such as credit card, debit card, net banking, IMPS (lmmediate payment Service), UPI (Unified Payment Interface), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), and BHIM (Bharat Interface for Money) Aadhar Pay.<\/p>\n

This limit of \u20b9 10,000 has been raised to \u20b9 35,000 in case of payment made to transport operators for plying, hiring or ieasin9 goods carriages. Therefore, payment or aggregate of payments up t0 \u20b9 35,000 in a day can be made to a transport operator otherwise th0n by way of account payee cheque or account payee bank draft, or use of electronic clearing system through a bank account or through such other prescribed electronic modes such as credit card, debit card, net banking, IMPS (Immediate payment Service), UPI (Unified Payment Interface), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), and BHIM (Bharat Interface for Money) Aadhar Pay., without attracting disallowance under Section 40A(3).<\/p>\n

However, no deduction is required to be m\u00a3de from ar|y sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor, during the course of the business of plying, hiring or leasing goods carriages, if the contractor furnishes his permanent account number (PAN) to the person paying or crediting such sum<\/p>\n

Question 4.
\nAnswer sub-divisions :
\nState any four of the specified businesses eligible for deduction under Section 35AD of the Income-tax Act, 1961. (Nov 2011, 4 marks)
\nAnswer:
\nFollowing are the specified business eligible for deduction under Section 35AD:<\/p>\n