8/10/2019 ICMAP Business Law past papers

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BT-MP 1 of 2 PTO(Note: The number of questions and their marks may vary in the examination paper)

ICMPakistan

MODEL PAPER

BUSINESS TAXATION (LA-402)

SEMESTER-4

Time Allowed: 02 Hours 30 Minutes Maximum Marks: 80 Roll No.:

(i) Attempt all questions.(ii) Answers must be neat, relevant and brief.(iii) In marking the question paper, the examiners take into account clarity of exposition, logic of arguments,

effective presentation, language and use of clear diagram/ chart, where appropriate.(iv) Read the instructions printed inside the top cover of answer script CAREFULLY before attempting the paper.(v) Use of non-programmable scientific calculators of any model is allowed.(vi) DO NOT write your Name, Reg. No. or Roll No., or any irrelevant information inside the answer script.(vii) Question Paper must be returned to invigilator before leaving the examination hall.

MarksQ. 1 The first question printed separately comprises 20 MCQs of one (1) mark

each having allowed time of 30 minutes is an integral part of this questionpaper.

Q. 2 (a) Rule-128 of the Income Tax Rules, 2002 provides exemptions on certain articles andincome streams of the taxpayers with reference to attachment in the context of recoveryproceedings. Specify any ten clauses of Rule-128 of the Income Tax Rules, 2002. 10

(b) In the light of section 104 of the Income Tax Ordinance, 2001 answer the following: 04

(i) Can a resident person set off his foreign losses? If yes, then under which head ofincome?

(ii) What would be the treatment of unadjusted foreign losses under the aforesaidprovision of law?

(iii) Where a resident person has a foreign loss carried forward for the last three years,which year s loss will be set off first?

Q. 3 (a) Section 119 of the Income Tax Ordinance, 2001 deals with the extension of time forfurnishing returns and other documents. Specify the documents and grounds in respect ofwhich extension can be requested. 08

(b) Enumerate the entitlement of a resident person to claim tax credit on investment in sharesand insurance and how this tax credit is computed under Section 62 of the Income TaxOrdinance, 2001. 08

Q.4 M/s. Wilson Pharma Limited (WPL) is a private limited company. The company manufacturesand supplies medicines. WPL sells its medicines through various distributors in Karachi,

Lahore and Islamabad. The following is the profit and loss account of WPL for the year endedon June 30, 2013:Rs. 000 Rs. 000

Sundry expenses 2,240 Gross Profit 235,200Office salaries 29,120 Interest on bank deposit 300Rent, rates & taxes 8,960 Recovered bad debtsLegal charges 2,016 (allowed in the past) 448Finance charges on leased assets 350 Dividend 672Advertisement 5,600Auditor's fees 6,720Cost of issue of debentures 5,600

8/10/2019 ICMAP Business Law past papers

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BT-MP 2 of 2(Note: The number of questions and their marks may vary in the examination paper)

MarksLoss on sales of furniture 2,240Provident fund contribution 7,840Bad debts 4,480Vehicle expenses 8,960Fire insurance premium 7,840Preliminary expenses 1,008Provision for taxes 10,080Provision for bad debts 4,480Liquidated damages 3,360Depreciation 44,800Net Profit 80,926

236,620 236,620

Additional Information:The following information is available:(i) Sundry expenses include donation of Rs. 502,000 paid to an unrecognized charitable

institution.

(ii) Office salaries include Rs.6,000,000 paid to one of the directors.

(iii) Provident Fund is recognized by the Income Tax Department.

(iv) Vehicle expenses are not vouched and verifiable to the extent of Rs.1,881,000.

(v) Actual depreciation works out to Rs.32,650,000 only.

(vi) Lease rental for the year are Rs.1,750,000.Required:

Calculate the taxable income and tax liability of the company for the tax year 2013 from theabove data. 20

Q. 5 (a) Elaborate the procedure for applying and grant of approval for change of year from normal tax year to special tax year under Section 74 of the Income Tax Ordinance,2001. 08

(b) Briefly state the provisions of Section 102 of the Income Tax Ordinance, 2001 regarding foreign source salary of resident individuals . 03

Q. 6 (a) Under the provisions of the Customs Act, 1969, the imported goods can be stored in thebonded warehouses. Enumerate the benefit that importer seeks under the facility ofbonded warehouse. 06

(b) (i) ABC Company is engaged in trading of imported goods and is registered as animporter and distributor. The company has provided following information withrelation to imports and local sales of taxable supplies for the month of May-2013:

Import / assessed value of taxable goods Rs.2,400,000Rate of customs duty 25%Local sales of taxable goods in the month of May-2013 Rs.4,000,000

Required:Keeping in view of the value addition sales tax regime applicable for commercialimporters under Chapter X of the Sales Tax Special Procedure Rules, 2007, workout the sales tax liability of ABC company for the month of May-2013 (Assume thatno local purchases of taxable goods involved). 07

(ii) List down the persons who are required to get themselves registered under the rule-4 of the Sales Tax Rules, 2006. 06

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