INSTITUTE OF COST AND MANAGEMENT

ACCOUNTANTS OF PAKI STAN

Vision
Mission Statement
"To be the Preference in Value Optimization for
Business".
"To develop strategic leaders through imparting quality
education and training in Management Accounting, to
continually set and upgrade professional standards and
to conduct research, bringing value-addition to the
economy".
Assignment Questions - (Fall- 2013 Session)
Business Taxation
Semester - 4
INSTRUCTIONS:
1. A student who takes admission in Distance Learning Programshall be required to complete all assignments of
his/her respective subjects within the same academic session. If he/she fails to complete 60% assignments
within that session, he/she shall be required to re-enrol himself/herself in the next session after making
payment of 100%DistanceLearning Programfee.
2. Eachassignment is allocated a total of 100marks.
3. Assignments of all subjects must besubmitted in the sessionin which the examination is to be taken. The last
date for submissionof 100%assignments isJ anuary10, 2014for Fall-2013Examination.
4. Youare required to payAnnual Subscription of Rs.1,sOO/-during J uly- December eachyear to avoid payment of
Restoration Feeof Rs.2,000/-.
5. Examination Fee is payable from December 1 to 20, 2013 [with normal fee], December 21 to 31, 2013 [with
100% late fee] andJ anuary 1to 15, 2014 [with 200%late fee] for Fall-2013Examination. Examination forms can
becollected from any ICMAP Centre or website: www.icmap.com.pk.
6. Assignments would not beacceptable after due date.
Examination Eligibility:
The students, who are enrolled under the 'Distance Learning Program', must have submitted 60% assignments of
eachsubject in which they are enrolled to become eligible to appear inthe examination.
ASSIGNMENT NO.1
Q.1 Definethe followi~S per Section2of the income tax ordinance 2001
a) Taxyear t <? b ')
b) Company u/s 80(2)(b)
c) Residentassociation of persons_"
d) FinanceSociety
e) Royalty
- :? '
Q.2.
3l-
(.a) Listany,~i)(j!~ITl~_9nwhich tax deducted at source under income tax ordinance 2001? -i / r- .
(b) Describe the various provisions of the Income Tax Ordinance, 2001 regarding bad debts allow
ability
(c) Define the term tax avoidance scheme. /
Q.3. M/s. Z. Attari Ltd., has a tax year ending on so" J une, is feeling difficulty in filing the return in time.
Youare required to advicethe management on the following issues: - - '-- ._..
"" (i) Who is responsible to file return on behalf of the company and what conditions shall be 5
applicable to the return?
(ii) What procedure the company hasto follow if extension in filing is required? 6
(iii) What penalties shall be applicable in respect of the following contraventions of the law:
(a) Failure in furnishing a return. 3
(b) Non-payment of tax or failure in payment of tax; and 3
(c) Concealment of Income. 3
Q.4. What do you understand from the concept of "loss carried forward" under the income tax ordinance
2001.with regardto eachof the following headsof income?
(a) Income from business _.'): ':. '
(b) Speculation businesslosses
(c) Capital losses
ASSIGNMENT NO.2
Q.1. (a) Define the following terms accordingto Section2of the income tax ordinance 2001:
I. BankingCompany
II. TaxPayer
III. Income.
(b) Mr. Hijrat hasinformed you that hewould be permaner.ttoi migrating to USAwith his family onJ uly 3
10, 2009 and has no intention of returning to Pakistan. He is seeking your advice as to his l.,J
obligations, if any, under the Income TaxOrdinance, 2001 inthis regard.
Q.2. (a)Inthe light of income tax ordinance 2001. Explainthe following terms
i. Non-arms length transactions
ii. Income of a minor child. 6S
t(jJ) What are the provisions of Section162 of the income Taxordinance, 2001 regarding recovery of tax
U from the personfrom whom tax was not collected or deducted?
~) Who is treats as "person "under Section80of the income tax ordinance 2001.
Q.3. (a) what do you understand bythe following terms as described in income tax ordinance 2001:
i. Disposal of Assets.
ii. Initial allowance under Section 23.
iii. Eligible Depreciable Assets
iv. BusinessAssetsAnd Personal Assets
(b) Hashmi Limited purchased a machine for Rs.20 million on J uly 1, 2009, when it was enjoying tax
holiday. Thetax holiday period expired on J une30,2010. The machine remained in the company's
use till March 31, 2012 when it was shipped to an associated company in Indonesia for sale, on
behalf of Hashmi Limited.
Required:
(a) Compute the amount of depreciation which the company could claim in tax year 2011 and
2012. (Assumethat the rates of initial and normal depreciation during this period were 50%
and 10%respectively).
(b) Howshould the company determine the sale price of the machine for computing gain/loss on
Marks
8
7
5
5
5
12
8
5
8
9
8
Marks
3
12
6
6
5
5
5
5
10
10
sale, under the Income TaxOrdinance, 2001?
Q.4. (a). Explainthe Section 113of the Income TaxOrdinance, 2001 relating to minimum tax on the income 15
of certain persons.
(b). Discussthe provision of Section 170 &171for claiming refund under the Income Tax Ordinance, 15
2001.
ASSIGNMENT NO.3
Q.1. Describein detail:
I. Disposal andacquisition of assetsas per Section75of the income tax ordinance 2001. I_/( /~
II. Businessand personal assetsas per Section75(7) of the income tax ordinance 2001.
(a) Explain the provisions for extending time for furnishing returns and other documents under
Section119 in the light 0the income tax ordinance 2001. " . ,< - t
(b) What are the incomes of a person for a tax year, other than income exempt from tax and 15
chargeableto tax under head"income from business"? --
Q.2.
Q.3. (a) Under what circumstances, a person is liable to pay additional tax under Section 205 of the 10
income tax ordinance 2001? And at what rate? ""79' r, tr: ----,
(b) Under what circumstances, default surcharge levied under Section 205 of income tax ordinance 5
2001 canbe reduced. - -
Q.4. (a) Define salary under the head income from salary? . (
(b) Define value of Perquisite under the headof salaryincome under income tax ordinance 2001?
Mr. Ahmad is a resident individual and employed in a company. During the year ending on J une 30,
200A, following amounts have been paid to him:
Basicpay
Houserent
Bonus
Utilities
Medical allowance
Costof living allowance
Leaveencashment
Amount in Rupees
27,470 P.M.
12,362 P.M.
54,940
2,747 P.M.
4,247 P.M.
4,121 P.M.
29,668
(i) He has been provided a company maintained car, which was used partly for official and
partly for personal purposes. The employer leasedthe car from a bank. Fair value of the
leasedcar was Rs.1,200,000at the inception of the lease.
(ii) Hehas paid Zakatamounting to Rs.100,000/- to anapproved institution. !;,
(iii) He has purchased newly issued- sha~es of listed companies amounting to Rs.250,000/-
through initial public offering (IPO).
(iv) He has paid donations to an un-approved institution amounting to Rs.50,OOO/-and to
an approved institution, specified in Clause (61) of Part I of Second Schedule, amounting
to Rs.:50,000/-. .: ",
(v) Capital gain on sale of shares of a private limited company amounted to Rs.25,000~Shares
were retained by Mr. Ahmad for more than one year. -,
(vi) Company provided a driver to Mr. Ahmad and hewas paid Rs.6,000per month.
(vii) Company also provided aninterest-free loanto Mr. Ahmad amounting to Rs.500,000at the
beginning of the year. Benchmark rate is 12%for tax year 200A.
Required:
Compute the taxable income and tax liability of Mr. Ahmadfor the tax year 200A.
ASSIGNMENT NO.4
Q.1.
(a) Discussprovisions,contained in Section 137of income tax ordinance 2001Relating to due date of
payment. !\~ IrO - (J'7 S(-&A-' H1'tU.
(b) Elaborate the procedure for applying and grant of approval for change of year from "normal tax 10
year" to "special tax year".
Q.2.
What isthe tax liability incaseof successionto businessotherwise than on death ,under Section98c of
19 . (c ) "lw 770 M ' "J' ~ ,~
Marks
10
10
10
10
10
20
Marks
10
10
income tax ordinance 2001.?
Q.3. Howquarterly Advancetax is calculated in respect of:
I. Anindividual
ii. A company ff4 b", c'
iii. Anassociation of persons
Q.4. (a) Explain provisions for carry forward of speculation business losses under income tax ordinance 10
2001. 75C ,
(b) State five capital assetsfor which loss on disposal is not allowed to be recognized/claimed under 5
income tax ordinance 2001.
20
Q.5. (a) Everyindividual (whether salaried or non-salaried) whose taxable income for the year exceedsthe 10
maximumamount that is not chargeableto tax under the Income TaxOrdinance, 2001 is required
to furnish a return of income for the tax year under Sec.tion1140fthe Income TaxOrdinance,2001.
In the light of sub-Section (2j of Sectionl14, what credentials are required to be furnished with
filing of income tax return?
(b) M/s Ahsan Bilal and Company deals in speculation and non-speculation business. The company is
allowed to set off and carry forward its losses arising out of its speculation business under
Section58of the Income TaxOrdinance, 2001. Thefollowing information has been extracted from
the books of accounts of the company for the year endedJ une30,2013:
(Amount in Rupees)
Incomefrom speculation business550,000
Income from non-speculation business820,000
Carriedforward lossesfor the lastthree tax years from speculation business800,000
Inthe light of Section58 of the Income TaxOrdinance, 2001answer the following:
(i) Canthe company set off its lossesarising out of its speculation business? Briefly state the 5
provision.
(ii) What would be the treatment of unadjusted losses arising out of speculation business 5
under saidSection?
(iii) Howlong lossesarising out of speculation businesscanbecarried forward?
(iv) M/s Ahsan Bilal and Company hasa losscarried forward for the last three years.
Which year losswill besett off first under the above Section?
5
10
ASSIGNMENT NO.5
Marks
Q.1. Mr. HussainAhmad is an officer in a public listed company. Hederived the following salary income
during the tax year ended J une30, 200A:
Amount in Rs.
Basicsalary 50,000 (per month)
Houserent allowance 22,500 (per month)
Utility allowance 5,000 (per month)
Medical allowance 6,000 (per month)
Leaveencashment 50,000
(I) Companyalso provided himwith a 800CCcar valuing Rs.600,000 as per books of accounts. The
car is usedfor official and personal purposes.
(ii) Hehaspaid Zakat of Rs.25,000 to an approved institution.
(iii) He paid a donation of Rs. 20,000 to a charitable institution for which a tax credit is allowed
under Section61.
(iv) Hepaid a donation of Rs. 10,000 to anapproved institution as specified in clause (61) of part 1
of Sectionschedule.
(v) Hereceived a pension amounting to Rs. 7,000 p.m. from his pastemployment in the government.
Required:
Compute the amount of taxable income andtax liability of Mr. Hussainfor the tax year 200A.
Q.2. (a) What arethe dates of filing the return?
(b). Define E-filing Procedure?
(c). Howto do Individual e-Enrolment?
25
10
10
5
Q.3. Discussthe Penalty for failure to furnish a return or statement under Section182under the income 10
'tax ordinance 2001.
Q.4. (a) Fora taxpayer enjoying resident status. Presumptive tax regime is applicable only on those earning 10
businessincome. comment.
(b) State your opinion with reasonsabout the following issue. 15
An importer or an exporter has incurred loss on imports and exports .will there is any incidence
of tax on such persons?
Q.5. Maratib, a large group of companies is contemplating to avail the benefits of Group Taxation by
offering it to betaxed asone fiscal unit.
Required:
Inthe light of the provisions of Income TaxOrdinance, 2001 explain the provisions of Group Taxation 15
to the chairman of the group.
ASSIGNMENT NO.6
Marks
Q.1. (a) Define the following terms under the Income TaxRules,2002:
i. digital certificate or digital signatures
ii. E-intermediary
iii. Employee
iv. furnished accommodation or housing
2
3
2
3
(b) Explainthe Rule5 of the Income Tax Rules, 2002 relating to valuation of conveyance provided by 5
the employer to the employee under the headof income salary.
Q.2. (a) Enumerate the Rule91 of the income tax Rules, 2002 in respect of an application for recognition 7
of a provident fund?
(b) Discussthe situations causing an end of the duration of registration of an income tax practitioner 3
under Rule88 of the Income TaxRules,2002.
Q.3. As per Rule10of the Income TaxRules, 2002:
(i) Definethe term entertainment expenditure. 2
(ii) What isthe condition of admissibility of entertainment expenditure? 3
(iii) What are the limitations on the deduction of entertainment expenditure? 5
Q.4. (a) Enumerate the prescribed qualification for registration as an income tax practitioner as provided 8
under Rules86 of the income tax rules, 2002.
(b) Which books of account, documents and records, a taxpayer deriving income chargeable 7
under the head income from business is required to maintain as per the Rule 29 (1) of the
Income TaxRules, 2002?
Q.5. (a) What are the minimum documents and records to be maintained by a tax payer deriving income 15
chargeable under the following heads.(rule 31 income tax rules 2002 refers)
i. Salary
ii. Property
iii. Capital gains
(b) State the Rule 4 of the Income TaxRules, 2002 for valuation of accommodation provided by 7
an employer to the employee for the purpose of computing the income chargeable to tax under
the headsalary.
(c) List the methods that shall apply for the purposes of determining an arm's length result under 8
Rule23(3) of the Income TaxRules,2002.
Q.6. inthe light of Capital Gaintax Ordinance 2012.Define the following
(a) Why Capital gaintax has promulgated?
(b) What isthe rate of capital gaintax in all types of situations?
(c) Is it compulsory to file tax return
(d) Who collect and deduct capital gaintax?
20
ASSIGNMENT NO.7
Q.1. Definethe following terms under the salestax act, 1990.
i. TaxFraud
ii. Time of Supply
iii. Retail price
IV. Extratax.
v. Duedate of payment of salestax.
Q.2. (a) Describethe scopeof salestax under Section3of the salestax Act.?
(b) Explainthe provisions of SalesTaxReturn under Section26of the SalesTaxAct, 1990.
(c) Explainthe provisions relating to deregistration, blacklisting andsuspension of registration?
Marks
25
6
5
14
Q.3. (a) List out different types of returns that salestax department may require to file .under SalesTax 5
Act, 1990
(b) Definethe term manufacture or produce with reference to the salestax act, 1990? 5
Q.4. Thefollowing information relate to XYZ(Pvt) Ltd., for the month ended December 31, 2012:
Rs.
Taxablesupply
Exemptsupply
Zero-rated supply
Total supply
Purchaseof raw materials usedin taxable and zero-rated supply
Purchaseof raw materials usedin exempt supply
Required:
Compute the amount of salestax liability/refund of the company.
5,000,000
1,000,000
2,000,000
8,000,000
4,500,000
550,000
15
Q.5. (a) Describe input tax and Output tax as defined in the SalesTaxAct, 1990. 10
(b) Difference between Zero rates supply and Exempt supply, showing major distinctions 5
(c)A consignment imported byABCworth Rs.10 million was damaged while in transit from the port.
Due to a limiting clause in the Insurance policy, the claim received from the insurance company
was restricted to an amount of Rs.6.4 million.
Required:
(a) Explainwhether the salestax paid on import can beclaimed as input tax. 5
(b) Explain whether the delivery of goods to the insurance company against insurance claim, 5
constitute ataxable supply
ASSIGNMENTNO.8
Marks
Q.1. Describefollowing provisions under salestax act, 1990:
I. Debit and credit notes under Section9
ii. Exemption from penalty and additional tax under Section34-A
8
7
Q.2. Hop (private) Ltd (hhpl), a registered tax payer, has received a notice from the department of inland 20
Revenuerequiring it to showcausein respect of discrepancies inthe quarterly salestax Return.
The management wants to appoint a representative to persuade their case before the adjudicating
authority .Under the provisions of sales Tax Rules,2006 advise the Management about the
qualification and disqualifications of the person to act asthe authorized representative of HHPL.
Q.3. Mr Rizwan, a sales tax registered person, is carrying on business in the name of Rizwan Enterprises.
OnFebruary 15,2012. Hesold certain goods to his customer against which he intends to issuea credit
note in the month of September 2012.
Required:
Explainwhether Mr. Rizwan can issue the credit note in the month of September,2012 under the 10
SalesTaxRules,2oo6.
Q.4. Listdown the particulars to mentioned on the debit note issuedbythe supplier in the event of change 15
inthe value of supply, under the salesTaxRules,2006.
Q.5. (a) State the procedures for deregistration asenumerated in the SalesTaxRules,2006 15
(b) Explainthe term "short paid amount Recoverablewithout notice" as per Section 11A of salestax 5
act 1990?
Q.6. Mr. Abid is a recently qualified chartered accountant. Hewants to establish asalestax practice and
intends to become an e-intermediary for the purpose of electronically filing the returns and other
Prescribed documents on behalf of his clients. Under the provisions of SalesTaxRules,2006 advise
Mr. Abid on the following:
Required:
(a) Procedurefor appointment ase-intermediary.
(b) Responsibilities of an e-intermediary.
(c) Cancellation of appointment asan e-intermediary.
6
8
6
ASSIGNMENT NO.9
Marks
Q.1 Write short note on payment of salestax byRetailers under the special procedures rules 2001? 15
Q.2. Inthe light of Special Procedure for persons Providing or rendering services subject to SalesTaxUnder
the provincial law:
(a) Who is eligible for Registration? 5
(b) What is the procedure for Filingof return and deposit of salesTax? 5
(c) Howto determine tax liability? 5
Q.3. Explain payment of salestax on account of minimum value under special Procedure for payment of 15
salestax byImporters?
Q.4. Briefly defines the Procedure for payment of refund under special procedure for Personsengaged in 15
makingZero RatedSupply?
Q.5. Describethe Following under special Procedure for payment of sales tax by steel melters, Rerollers
andship breakers:
(a) Payment Of tax mode. 5
(b) Operating on Self Generation. 5
(c) Recordsto bemaintained. 5
Q.6. Q.6 What are the responsibilities of a withholding agent (any five), registered supplier and collector 25
under special Procedure (withholding) Rules,20017
ASSIGNMENT NO. 10
Marks
Q.1. Definethe following terms as usedinthe customAct ,1969
(a) Goods 3
(b) Defaulter 3
(c) Seize 2
~~~e 5
(e) Transaction value if identical or similar goods .Section25 (6) 5
(f) Computed value-Section 25(8). 5
(g) Customs duty on Goods Dutiable. 3
(h) Deferment of Collection of Duty. 3
Q.2. (a) What are the owner's power to deal with ware housedgoods under Section94 of the CustomAct, 5
1969?
(b) Listdown the responsibilities of warehouse keeper under Section 116of the customAct 1969 ? 3
(c) What do you understand bythe term "Rounding off of Duty "as used in Section 19b of the custom 3
Act 1969?
(d) What are the provisions contained in Section21A of the Custom Act, 1969 regarding power to 5
defer the collection of custom duty?
(e) Under Section39-40 of the Customs Act, 1969answer the following:
(i) When drawback is not allowed? 3
(ii) What is the time of payment of drawback? 2
Q.3. (a) What is the scope of Capital Value Tax? List down the transactions, which are subject to Capital 8
ValueTax
(b) When the capital value tax is payableon? 5
(c)What are the Assets liable to Capital ValueTax? 4
(d) Describe howthe value of a motor vehicle, not plyingfor hire, is determined under Section 1(3)(b) 8
of the Capital Value Tax?
Q.4. (a) Explainthe provisions relation to the following asper Federal ExciseAct, 2005.
(a) Special ExciseDuty with reference to Section3A
(b) Duedate as per Section 2(8a).
(c) Wholesale Dealer(2(25)
(d) Zero rated(2(26).
(e) officer of inland Revenue
(f) Conveyance
(g) Duty Due
(h) Applicable value and rate of duty.
4
2
5
4
4
2
2
2