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1.

X ltd is engaged in the business of manufacture of goods in India for domestic market. The audited

profit and Loss account for the year ending 31 st March 2018 is as follows:

Particulars

Amount

Particulars

Amount

Cost of goods sold

13,78,100

Sales

42,70,500

Office Expenses

1,30,000

Rent of quarters near factory given to workers

60,000

Salary to employees

12,80,000

Rent of commercial property given on rent to a foreign bank

1,30,000

Expenditure on scientific research

84,000

Sale proceeds of gold(not being stock in trade)

2,60,000

Bad debts

10,000

Amount charged from persons using guest house of company

10,000

Entertainment expenses

57,000

   

Advertisement expenditure

2,27,000

   

Travelling expenses

3,20,000

   

Interest

82,000

   

Advance Income-Tax

30,000

   

Income and Wealth Tax

86,400

   

Sales tax, Excise duty and customs duty

1,76,000

   

Municipal tax of quarters given to workers

16,000

   

Municipal tax of commercial property

12,000

   

Repairs of worker's quarters

12,000

   

Repairs of commercial property given on rent

7,000

   

Repairs of factory

10,000

   

Insurance

36,000

   

Land revenue of worker's quarters

2,000

   

Land revenue of commercial building

6,000

   

Depreciation

1,86,000

   

Other expenses

1,10,710

   

Net profit

4,72,290

   

Total

47,30,500

 

47,30,500

Other Information:

1. Cost of goods Sold include,Goods of Rs.3,80,000 purchased from Mrs .X during the year,who is wife of

Director Mr.X.

The market value of the goods is Rs.2,86,000.

2.Goods purchased from Y Ltd of Rs.90,000 which is paid by bearer cheque

3.Out of Salaries of Rs.12,80,000

a.Rs 30,000 is employees contribution to recognized provident fund ,Rs.17,500 of which is credited in the employees account in the relevant fund before due date

b.Rs.40,000 is paid outside India on which tax has not been deducted at source

4. Expenditure on scientific research includes Rs.30,000 on cost of land and Rs.24,000 paid to an approved

national laboratory for undertaking scientific research under an approved programme

5. Advertisement expenditure includes Rs.16,000 being cost of advertisement which appears in political

party magazine

Determine taxable income of X ltd for assessment year 2018-19

2.XYZ ltd is an Indian company furnishes the following particulars for the assessment year 2018-19

Particulars

Amount

Particulars

Amount

Salary to staff

12,40,000

Gross Profit

25,58,000

Travelling and Conveyance

18,000

Rent of flats given to officers

12,000

Office expenses

3,000

Sundry Receipts

5,000

Sales Tax

28,500

Interest on bank deposits

17,000

Contribution to approved national laboratory for carrying out approved scientific research

79,500

Capital gains on Short-term Investment

3,000

Gratuity Fund

5,000

   

Reserve for future losses

20,000

   

Bad debts written off

3,000

   

Advance Income-tax

13,000

   

Car Expenses

9,000

   

Depreciation On:

     

Machinery

18,000

   

Car

3,000

   

Furniture

5,000

   

Building

3,000

   

Rent and Repairs of building

3,000

   

Advertisement expenses

7,500

   

Municipal taxes and Ground rent of flats given to officers

7,000

   

Sundry expenses

16,000

   

Income-tax

11,000

   

Dividend tax

700

   

Net Profit

11,01,800

   

Total

25,95,000

Total

25,95,000

Other Information:

1. Car is utilized for non-business purpose by a friend of a director. In past years one-fourth of such expenditure was disallowed

2. Sundry expenses include Rs.9000 being payment of printing bill to relative of the managing director, payment is unreasonable to the extent of Rs.4700

3. Salary includes payment of Rs.21,000 in cash to employee. It also includes medi-claim insurance premium for the benefit of employees of Rs.15,000 out of which Rs.6000 is paid in cash.

4. Though amount of depreciation on building, car and furniture has been calculated as per tax provisions, depreciation in respect of machinery is in excessive to the extent of Rs.2000

5.The company has deposited Rs.2,40,000 with Maruti Udyog Limited on March 1,2018.the car is likely to be delivered in June 2018.The said amount is not debited to profit and loss account.

6.The company gets a refund of sales tax of Rs.3000.(It was allowed as deduction for the previous year 2013-14).The amount is not credited to the profit and loss account,as the Commissioner’s appeal against the refund is still pending in the Delhi High court

Determine the taxable income of the assessee company for the AY 2018-19