in 2015 the profit was the 15000 which was 40% greater than that the in the 2014 calculate the total profit made in 2014
Answers
Revisionary Test Paper_Final_Syllabus 2012_Dec2015
Academics Department, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1
Paper 16 – Tax Management & Practice
Question 1.
(i) ‗D‘, an Indian citizen left India for the first time on 20.9.2013 for employment in Denmark.
During the Previous Year 2014-15 he comes to India on 5.5.2014 for 150 days. Determine the
residential status of ‗D‘ for the Assessment Years 2014-15 and 2015-16.
Solution :
During the Previous Year 2013-14 (A.Y. 2014-15) ‗B‘ was in India for 175 days
(30+31+30+31+31+21) and therefore, does not satisfy the first condition. As regards the second
condition, although he was here in the four preceding Previous Years for more than 365 days as
he was permanently in India but for the relevant Previous Year 2013-14 he should have been
here for 182 days instead of 60 days as he is a citizen of India and leaves India in 2013-14 for
employment abroad.
He neither satisfies the first, nor the second condition and is therefore, Non-Resident in India.
Similarly, during the previous year 2014-15 (A.Y. 2015-16) he visits India for 150 days. In this case
also, the period of 60 days will be substituted by 182 days as he is a citizen of India. Therefore, he
will be a Non-Resident in India even for the Previous Year 2014-15 (A.Y. 2015-16).
(ii) A Hindu Undivided Family (Mr. W is Karta, X, Y and Z are coparceners) carries on cloth business
in Bhutan. X comes to India and starts a cloth business at Mumbai in partnership with some other
persons. The capital contributed by X to this firm is found to have come from the family.
Subsequently, Y joins the firm as partner. Later on another business is started at Varanasi with the
same persons and one outsider as partner. Z joins this firm. The Assessing Officer wants to treat the
family as resident on the ground that its coparceners are partners in firms, financed out of the
family funds, and the firms are resident in India. Is the Assessing Officer legally correct?
Solution:
A case on similar facts was examined by the Supreme Court of India in the case of CIT vs.
Nandlal Gandalal (1960) 40 ITR 1, wherein the Apex Court pointed out that both under the
Hindu Law and under the Law of Partnership, the Hindu Undivided Family as such could exercise
no control over the management of a firm in which some of its coparceners were partners, even
if capital contributed by coparceners was found to have come from the family.
The position in Hindu Law with regard to coparcener who has entered into partnership with
others is well settled. The partnership is a contractual partnership and is governed by the Indian
Partnership Act, 1932. The partnership is between the coparcener individually and the other
partners and not between the family and other partners. This remains so even if the coparcener
is accountable to the family for the income received. Thus, control and management over the
firm‘s business lies in the hands of individual coparceners and not in the hands of the family. The
Assessing Officer is, therefore, not justified while holding the HUF as resident in India.
Answer:
9000
Step-by-step explanation:
40% of 15000 = 6000
15000-6000 = 9000