Mr. A dealer in shares, converted 100 RIL shares into investments as on 1/4/2018. FMV as on 1/4/2018 was Rs. 200/share. Cost was Rs. 150/share purchased in 2010. He sold the shares on 7/12/2018 for Rs. 250/share. Determine the taxability
anonymous poll

1. PGBP - 5000, LTCG-5000 – 40
👍👍👍👍👍👍👍 80%

4. PGBP-5,000, STCG - 5,000 – 9
👍👍 18%

3. PGBP- Nil, LTCG - 5,000 – 1
▫️ 2%

2. PGBP- 5000, STCG-10,000
▫️ 0%

👥 50 people voted so far. Poll closed.

Mr. A (manufacturer) received liquidated damages of Rs. 25 Lakh from supplier of machinery due to delay in supply of machinery. Determine the taxability of compensation
anonymous poll

2. Taxable as business profits u/s 28(ii) being compensation for termination of business contract – 38
👍👍👍👍👍👍👍 68%

1. Not taxable as capital receipt – 16
👍👍👍 29%

3. Taxable as capital gain – 1
▫️ 2%

4. Exempt transaction – 1
▫️ 2%

👥 56 people voted so far. Poll closed.

Mr. A deducted equalisation levy while making payment to Mr.B non resident. Mr. B wants to claim relief. Examine the correctness of following
anonymous poll

3. Relief of equalisation levy cannot be claimed – 47
👍👍👍👍👍👍👍 84%

1. Deduction can be claimed u/s 37 – 5
👍 9%

2. Credit can be claimed as per Sec.90 under treaty – 2
▫️ 4%

4. Relief can be claimed u/s 91 – 2
▫️ 4%

👥 56 people voted so far. Poll closed.

1. Option 4
2. Option 2
3. Option 3

See the video for detailed explanation....

Link for the video👆🏻

Guys please participate in polls it would help u to evaluate urself. The mcq on conversion of stock in trade to capital asset is clear example how a subtle difference of LTCG and STCG could take away ur marks. I could see many had selected LTCG. ICAI would cast the web like this only. Would post the next 3 soon.

The assessee owned huge plot of land and unable to sell it, he started disposing smaller plots to the buyers as per buyer requirement. Examine the correctness of the following.
anonymous poll

1. The income would be taxable under capital gains – 80
👍👍👍👍👍👍👍 92%

2. The income would be business income since it is in the nature of adventure – 7
👍 8%

3. It would be a capital receipt not chargeable to tax.
▫️ 0%

4. It would be taxable as IFOS.
▫️ 0%

👥 87 people voted so far.

ABC Ltd. issued debentures of 2 kinds. Deb A issued at Rs.90 to be redeemed at Rs.100(face value) after 3years. Deb B issued at Rs. 90 redeemed at same price after 3year. However, assessee shall pay int of Rs. 10 in year1. Examine correctness of following
anonymous poll

1. Int of Rs. 10 on deb A on pro rata basis and int of Rs. 10 on Deb B in yr 1 itself – 26
👍👍👍👍👍👍👍 60%

3. Interest of Rs. 10 on Deb A as well as B at end of yr 1 – 8
👍👍 19%

2. Int of Rs. 10 on Deb A as well as B on pro rata basis – 6
👍👍 14%

4. Interest of Rs.10 on deb A claimed as deduction at end of yr 1 and Int of Rs 10 on deb B on prorata basis – 3
👍 7%

👥 43 people voted so far.

Answers for MCQs

1. Income taxable as capital gains - As per MP HC ruling in Suresh Chand Goyal case wherein it was held that such activity of selling the land in plots as per buyers requirement was not a systematic activity and was out of inability of the assesee to sell the entire land together.

2. Option 1- interest of Rs. 10 on deb A on prorata basis and interest of Rs. 10 on deb B at end of yr 1 - as per SC ruling in Taparia Tools Ltd - wherein it was held that liability in the second case was only in the first year and ceased thereafter.

3. Option 3- Rs. 25 Lakhs - As per ICDS VII where govt grant is not directly relatable to asset - reduce from actual cost/WDV proportionate amt of those assets- Govt grant received * depreciation on those assets/total depreciation
Therefore 30 Lakhs * 10/12 = 25 lakh is to be transferred to P/L and balance would be shown as liability

XYZ Ltd. has P&M with WDV of Rs. 40 lacs. It purchased second hand P&M on 01.11.2018 for 14.40 lacs (4.40 in cash). It was amalgamated with ABC. with effect from 01.01.2019 by transferring asset at 60 lacs. Determine depreciation
anonymous poll

XYZ Ltd- 482353, ABC Ltd. - 192646 – 17
👍👍👍👍👍👍👍 81%

XYZ Ltd - 494039, ABC Ltd. - 1624371 – 3
👍 14%

XYZ Ltd. - 708000, ABC Ltd. - Nil – 1
▫️ 5%

XYZ Ltd. -452075, ABC Ltd. - 147945
▫️ 0%

👥 21 people voted so far.

Computer was purchased for the factory in Andhra Pradesh for Rs. 60000 on 1/6/2018. Determine the WDV and deduction of depreciation and allowance
anonymous poll

WDV- 36000, Deduction - 24000 – 46
👍👍👍👍👍👍👍 82%

WDV- 15000, Deduction- 45000 – 6
👍 11%

WDV- 15000, deduction - 54000 – 2
▫️ 4%

WDV - Nil, Deduction -54000 – 2
▫️ 4%

👥 56 people voted so far.

Mcq Answers:
1. Option 1 - WDV - 36000 Deduction -24000.
No investment allowance or additional depreciation shall be granted as its office appliance.


2. Option 1 - 482353 in XYZ Ltd., 192646 for ABC Ltd.

No depreciation on cash pur of asset. On opening WDV- divide the days between XYZ and ABC in 275:90 and for second hand machine - divide days in 61:90

Creating a new poll: 'The assessee had purchased plant on 1/4/2015 for its power generating unit at Rs.1,40,000 (Depn-10%). He sold the same on 30/6/2018 for Rs. 1,70,000. Determine the taxability.' Please send me the first answer option.
anonymous poll

PGBP-42000, STCG-30,000 – 15
👍👍👍👍👍👍👍 50%

PGBP-37940,CG-30,000 – 6
👍👍👍 20%

PGBP-42000, LTCG-30,000 – 5
👍👍 17%

PGBP- 72000 – 4
👍👍 13%

👥 30 people voted so far.

What would be the answer in case the sale value is 70,000
anonymous poll

Terminal depreciation of Rs. 28000 – 19
👍👍👍👍👍👍👍 73%

Capital loss of Rs. 28000 – 3
👍 12%

None of above – 3
👍 12%

Capital loss of Rs.70000 – 1
▫️ 4%

👥 26 people voted so far.

1. Option 2 -PGBP-42000, STCG-30,000
2. Option 3- terminal depn -28000

Assessee owns building on lease on which it has incurred huge capital expenditure. Examine the correctness of following:
anonymous poll

3.Depreciation on building would be allowed to lessee – 31
👍👍👍👍👍👍👍 65%

2. Depreciation wl be allowed to lessor – 9
👍👍 19%

1. It wl be capital expenditure – 6
👍 13%

4. Both 2 And 3 – 2
▫️ 4%

👥 48 people voted so far.

The assessee has purchased machinery on 1/10/2018 for Rs.15 Lakh. Opening WDV was Rs.10 Lakh. The assessee sold the machinery on 31/12/2018 for Rs. 35 Lakh. Examine tax implication
anonymous poll

2. STCG of Rs. 10 Lakh – 33
👍👍👍👍👍👍👍 79%

3. Depreciation of Rs. 2.625 and STCG of Rs. 12.625 – 4
👍 10%

1. Depreciation of Rs. 2.625 – 3
👍 7%

4. STCG of 12.625 – 2
▫️ 5%

👥 42 people voted so far.

1. Option 3 - Depreciation would be allowed to lessee as per Explanation 1 to S.32
2.option 2- STCG of Rs.10 lakh

Plant for the purposes of Section 32 of the Income tax Act does not include the following even if used for Business or Profession:
anonymous poll

d. Tea Bushes and Livestock – 31
👍👍👍👍👍👍👍 54%

a. Ships and Vehicles – 22
👍👍👍👍👍 39%

b. Scientific Apparatus – 4
👍 7%

c. Surgical Equipment
▫️ 0%

👥 57 people voted so far.