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Appendix
CS Executive Programme
Module-I (New Course)
June - 2010
INDEX
Paper 1
Paper 2A
Paper 2B
Paper 3

General and Commercial Laws

Com pany A ccounts
Cost and Management Accounting
Tax Laws

I. 1
I. 5
I. 11
I.15

PA PE R'S

Paper - 1 : General and Commercial Laws

Ch apter-1 : Co nstitution o f India
2010 - June [1] {C} (a) Constitution of India is basically federal with strong
unitary features. Discuss.
(8 marks)
(b) Explain the writ jurisdictions of the Supreme Court and High Courts as
provided in the Constitution of India.
(6 marks)
Chapter-2: Interpretation of Statutes
2010 - June [1] {C} (c) Explain the mischief rule in the interpretation of
statutes.
(6 marks)
Chap ter-3 : An O verview of Law Relating to Specific Relief; Arbitration
and Conciliation Torts; Limitation and Evidence
2010 - Ju ne [3] Distinguish between the following :
(iii) Battery and assault.
(iv) Con dition p reced ent and cond ition sub sequent.
(v) Primary evid ence and secondary evidence.
(4 marks each)
2010 - Ju ne [4] W rite notes on the following :
(ii) Setting aside of an award
(iii) Perpetual injunction
(iv) Rectification of an instrument
(v) Specific performance of a contract
(4 marks each)

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I-2

2010 - June [7] (c) Alok contracts to sell a piece of land to Vimal consisting
of 100 bighas for Rs. 10 lakh and it turns out tha t only 50 bighas of land
belongs to A lok. W ho ca n dem and specific performance of contract and who
cannot ? If there is a demand of specific perfo rmance from rightful party, what
will be the consideration ?
(5 marks)
2010 - June [8] (c) Kamini informed Ajay in the year 2001 that she had
committed theft of jewellery of her neighbour. Thereafter, Kamini and Ajay
were married in 2002. In the year 2003, criminal proceeding were instituted
against Ka mini in respect of the theft of jewellery. Ajay is called to give
evidence in the case. Decide whether Ajay can disclose the communication
mad e to him by Kamini.
(5 marks)
Chap ter-4 : Law relating to Transfer of P roperty
2010 - June [2] Attempt the following :
(i) State the circumstances in which a p roperty may be transferred in
favour of an unborn person.
(ii) Exp lain the rule of lis pendens as pro vided in the T ransfer of Prope rty
Act, 1882.
(4 marks each)
2010 - Ju ne [7] (b) Kamal transfers his property worth Rs. 10,000 to Shyam
and by the same instrument asked Shyam to transfer his pro perty worth Rs.
5,000 to Manoj. Kamal dies before Shyam made his election. Can Manoj get
compensation ? If so, from whom and how muc h ?
(5 marks)
Chapter-5 : Law relating to Stamps
2010 - June [2] Attempt the following :
(v) Exp lain the consequences of the instrum ents which are not du ly
stamped under the Indian Stamp Act, 1899.
(4 marks each)
Chap ter-6 : Law relating to Registration of D ocuments
2010 - June [2] Attempt the following :
(iv) State the documents which are req uired to be compulsorily registered
under the Registration Act, 1908.
(4 marks)
2010 - June [5] (a) A document was executed outside India and it was
presented for registration after a lapse o f four months fro m the d ate of its
arrival in India. Whether the document may be accepted for registration by the
Registrar ? Decide.
(6 marks)
2010 - June [7] (a) Ashok sells a house to Vinay by a written document and
delivers possession to Vinay, but the document is not registered. After one
year, Ashok sues Vinay to take back the possession of the property on the
ground that non-registration of a document has no validity. Will Ashok
succeed ? Which doctrine of law can be invoked by Vinay in his defence ?
(6 marks)

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I-3

Chapter-7 : Law Relating to Information Technology

2010 - June [2] Attempt the following :
(iii) W hat are cyber offences und er the Information T echnology Act,
2000 ?
(4 marks)
2010 - Ju ne [4] W rite notes on the following :
(i) E-governance
(4 marks)
Ch apter-8 : The Code of C ivil Procedure, 1908 (C.P .C.)
2010 - June [8] (a) Anil was a trustee of a trust. After A nils death, Brij
wrongfully takes the possession of the trust property. Chandan, the son of Anil
files a suit for recovery of possession of the property against Brij as the legal
heir of Anil in his individual capacity. But Chandan did not succeed. Then
Chandan files another suit for recovery of trust property against Brij in the
capacity of trustee as he was app ointed as trustee after the d eath of Anil.
W hether the second suit is barred by the doctrine of constructive res judicata ?
Explain.
(6 marks)
(b) Mo han filed a suit against Sohan and Ro han for partition of coparcenery
property P-1'. The suit has been decided . Mohan files another suit against
Sohan and Rohan for the partition of coparcenery property P-2', which was
in existence at the time of filing of the first suit. Decide.
(5 marks)
Chapter-9 : The Code of Criminal Procedure, 1973
2010 - Ju ne [3] Distinguish between the following :
(i) Summon s cases and wa rrant ca ses.
(ii) Bailable o ffences and no n-bailable offences.
(4 marks each)
Chapter-11 : Objective Questions
2010 - June [5] (b) Cho ose the mo st appropriate answer from the given options
in respect of the following :
(i) Under the Transfer of Property Act, 1882, the transfer of property may
be made
(a) Ora lly
(b) By written document
(c) By written document with its registration
(d) By delivery of pro perty except where transfer is required to be in
writing under the law.
(ii) The right to foreclosure is available to the m ortgagee when it is
(a) English mortgage
(b) Simple mortgage
(c) Mortgage by conditional sale
(d) Usufructuary mortgage.

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(iii)

I-4

The income of transferred property may be accumulated for an

unlimited time where the property is transferred with condition
(a) For the payment of debts taken by the transferor
(b) For the maintenance of the property itself
(c) For the maintenance of the descendants of the transferor
generation after generation
(d) All of the above.
(iv) Under the Specific Relief Act, 196 3, the relief of cancellation of a
written instrument is available
(a) W hen an instrument is void or voidable at the option of the
plaintiff
(b) W here the plaintiff may apprehend serious injury if the instrument
is left outstanding
(c) W here the instrument requires registration but is not registered
(d) Where conditions mentioned (a) and (b) above are fulfilled.
(v) The definition of the State as given under Article 12 of the
Constitution of India includ es
(a) The Central G overnment and Parliament of India
(b) The Government and the Legislature of each State
(c) All local or other authorities within India and under the control of
the Government of Ind ia
(d) All of the above.
(1 mark each)
2010 - June [5] (c) Re-write the following sentences after filling-in the blank
spaces with appropriate word(s)/figure(s) :
(i) Perpetual injunction is granted under section
of the Sp ecific
Relief Act, 1963.
(ii) A police officer may arrest an accused without warrant in case o f
.
(iii) The Co urt of a Judicial M agistrate of the First Class is authorised to
pass a sentenc e of
.
(iv) The right to maintenance under section 125 of the Code of Criminal
Procedure, 1973 is available to
.
(v) The application of revision under the provisions of the Co de of Civil
Procedure, 1908 is made to
.
(1 mark each)
2010 - June [6] State, with reaso ns in brief, whether the following statements
are co rrect or incorrect :
(i) The Constitution of India makes a few exceptions in which the
Parliament is authorised to make the laws even on the subjects
included in the State List.

CS Executive Programme Module- I (New Course)

(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)

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Article 174 of the Constitution of India empowers the Governo r of the

State to dissolve the State Legislature.
The Right to Information Act, 2005 confers on all citizens of India a
right to information.
Certain categories of information have been exempted from disclosure
under the Right to Information Act, 2005.
Under certain circumstances, a person is liable for the torts committed
by another.
On the same cause of action, a fresh suit is barred by law.
Decree is a formal expression of an adjud ication, whereas an o rder is
the decision o f the cou rt.
The procedure provided under any special or local law is not affected
by the procedure given under the Code of Civil Procedure, 1908.
(2 marks each)

Paper - 2 : C ompan y Acco unts

Chapter-1 : Accounting Standards
2010 - June [2] (a) Write short notes on the following:
(i) Non-acceptability of International Accounting Standards (3 marks)
Chapter-2 : Accounting for Share Capital
2010 - June [4] (c) Buy-back may be misused by the corporate entities at the
cost of innocent investors. Give your comm ents.
(3 marks)
Cha pter-4 : Und erw riting of Issues and A cquisition o f Business
2010 - June [4] (b) Rax Ltd. invited applications from public for 1,00,000
equity shares of Rs. 1 0 eac h at a prem ium of Rs. 5 per share. The entire issue
is underwritten by the underwriters A, B, C, and D to the extent of 30%, 30%,
20%, and 20% respectively with the provision of firm underwriting of 3,000,
2000, 1,00 0 and 1,00 0 share resp ectively. U nderwriters are entitled to
maximum commission as per law. The company has received applications for
70,000 shares from p ublic out of which applications for 19,000, 10,000, 21,000
and 8,000 shares were marked in favour of A, B, C and D respectively.
Calculate the liability of each underwriter treating firm underwriting on par
with marked applications. Also ascertain the underwriting commission @ 2.5%
payable to each underwriter.
(6 marks)

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I-6

Chapter-5 : Final Accounts of Joint Stock Companies

2010 - June [2] (a) Write short notes on the following:
(ii) Capitalisation of profits and reserves
(6 marks)
2010 - June [3] The following balances have been extracted from the books
of Pioneer Traders Ltd. as on 30 th September, 2009:
(Rs. 000)
Dr.
Cr.
Share capital (Authorised and issued):
Equity (15,00,000) Shares of Rs. 100 each)

1,50,000
8% Rede emab le preference (40,00 0 shares)

4,000
Securities premium

2,500
Preference share redemption
4,800

General reserve

10,000
Land (cost)
30,000

Buildings (cost less depreciation)

70,000

Furniture (co st less depreciation)

2,000

Motor vehicle (cost less depreciation)

3,500

Trading account !Gro ss profit

90,000
Establishment charges
25,000

Rate, taxes and insurance

1,200

Commission
600

Discount received

500
Interest on investments

800
Depreciation
6,000

Sundry office expenses

6,000

Payment to auditors
400

Sundry debtors and creditors

10,660
2,560
Profit and loss account (as on 30.9.2008)

1,000
Unpaid dividend

200
Cash in hand
1,200

Cash at bank in current account

19,500

Security dep osit

1,000

Outstanding expenses

600
Investments in G.P. Notes
20,000

Stock in trade (at or below cost)

35,300

Provision for taxation (year ended 30.9.2008)

7,000
Income-tax paid under dispute (year ended 30.9.2008) 10,000

Advance payment of income-tax

22,000

2,69,160
2,69,160

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The following further details are available:

(i) T he preference shares were redeemed on 1 st October, 2008 at a
premium of 20% b ut no entries were passed for giving effect thereto,
expect payment standing to the debit of preference share redemption
acco unt.
(ii) Depreciation as provided upto 30th Septem ber, 2009 is as follows:
(a) Building !Rs. 2,10,00,000.
(b) Furniture!Rs. 20,00,000.
(c) Motor vehicles !Rs. 60,00,000.
(iii) Establishment charges include Rs. 18,00,000 paid to managing
director as remuneration in terms of agreement which provides for a
remunera tion of 5% of annual net pro fits.
(iv) Payment to aud itors includ es Rs. 1 ,00,0 00 fo r taxation work in
addition to audit fees.
(v) Market value of investments on 30 th Septem ber, 2009 is Rs.
1,80,00,000.
(vi) Sundry debtors include Rs. 40,00,000 due for a perio d exc eeding six
months.
(vii) All receivables and deposits are considered good for realisation.
(viii) Income-tax demand for the year ended 30 th September, 2008 Rs.
1,00,00,000. has not been provided for agains t which appeal is
pending.
(ix) Income-tax is to be p rovid ed @ 34% . Also p rovid e for tax on divisible
profit @ 16%.
(x) Directors recommended payment of dividend on eq uity shares at the
rate of 12%.
(xi) Ignore previous years figures.
You are req uired to prepare the pro fit and loss acco unt for the year
ended 30th September, 2009 and a balance sheet as at that date.
Chap ter-6 : Consolidation of A ccounts
2010 - June [2] (b) Following are balance sheets of H Ltd. and S Ltd. as at 31st
March, 2009:
Liabilities
H Ltd.
S Ltd.
(Rs.)
(Rs.)
Share capital (Shares of Rs. 100 each)
5,00,000
2,00,000
General reserve as on 1 st April, 2008
1,00,000
60,000
Profit and loss account
1,40,000
90,000
Bills payable

40,000
Creditors
80,000
50,000
8,20,000
4,40,000

CS Executive Programme Module- I (New Course)

Assets
Go odw ill
Othe r fixed assets
1,500 Shares in S Ltd. at cost
Stock
Debtors
Cash at bank

I-8

40,000
30,000
3,60,000
2,20,000
2,40,000

1,00,000
90,000
20,000
75,000
60,000
25,000
8,20,000
4,40,000
The profit and loss account of S Ltd. showed a balance of Rs. 50,000 on 1 st
April, 2008. A dividend of 15% was paid on 15 th October, 2008 for the year
2007-08. The divid end was cre dited by H Ltd. to its profit and lo ss acco unt. H
Ltd. acquired shares on 1 st October, 200 8. T he bills payable of S L td. were all
issued in favour of H Ltd. and the same were got discounted by H Ltd.
Included in the creditors of S Ltd. are Rs. 20,000 for goods supplied by H Ltd.
The stock of S Ltd. includes goods to the value of Rs. 8,000 which were
supplied by H Ltd. at a profit of 33.33% on cost. Prepare consolidated balance
sheet of H Ltd. and S Ltd. as on 31 st March, 2009.
(9 marks)
Chap ter-7 : Valuation of Sh ares and Intan gible Assets
2010 - June [2] (a) Write short notes on the following:
(iii) Phases of generation o f intangible assets.
(3 marks)
2010 - June [4] (a) B alance sheet of Diamon d Ltd . as at 30 th June, 200 9 is
given below:
Liabilities
Rs.
Share capital: 40,000 Shares of Rs. 10 each
4,00,000
General reserve
80,000
Profit and loss account
64,000
Sundry creditors
2,56,000
Income-tax reserve
1,20,000
9,20,000
Assets
Land and buildings
2,20,000
Plant and machinery
2,60,000
Patents and trade marks
40,000
Preliminary expenses
24,000
Stock
96,000
Debtors
1,76,000
Bank balance
1,04,000
9,20,000

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I-9

The expert valuer valued the land and buildings at Rs. 4,80,000, goodwill
at Rs. 3,20,000 and plant and machinery at Rs. 2,40,000. Out of the total
debtors, it is found that debtors of Rs. 16,000 are b ad. The profits of the
comp any have be en as follows:
31 st March, 2007
:
Rs. 1,84,000
31 st March, 2008
:
Rs. 1,76,000
31 st March, 2009
:
Rs. 1,92,000
The company follows the practice of transferring 25% o f profits to
general reserve. Sim ilar type o f companies earn at 10% o f the value of their
shares. Plant and machinery, and land and buildings have been depreciated at
15% and 10% respectively. Ascertain the value of shares of the company by
using
(i) Intrinsic value method;
(ii) Yield value method; and
(iii) Fair value method.
(6 marks)
Chapter-8 : Objective Questions
2010 - June [1] {C} (a) State, with reasons in brief, whether the following
statements are corre ct or incorrect:
(i) Accounting policies vary from enterprise to enterprise.
(ii) In the absence of declaration of dividend, there is no need to provide
for depre ciation in the accounts of comp anies.
(iii) Securities premium money can be distributed as dividend.
(iv) For calculating minority interest, there is a need to distinguish between
capital and revenue profits of the su bsidiary.
(v) W hile preparing the consolidated b alance sheet, a contingent liab ility
in respect of a transaction between the holding and the subsidiary
companies is disappeared from the foot note.
(2 marks each)
2010 - June [1]{C} (b) Choose the most appropriate answer from the given
options in respect of the following:
(i) Indian accounting standards are formulated under the authority of the
of the
(a) Council of the Institute o f Chartered Accountants of Ind ia
(b) National Advisory Committee on Accounting Standards
(c) International Accounting Standard Boa rd
(d) Accounting Standard Board.
(iii) As per section 79 of the Companies Act, 1956 from the date of
receiving the sanction of the Central Government, a company must
issue shares at discount within a p eriod of
(a) One mo nth
(b) Two m onths

CS Executive Programme Module- I (New Course)

I-10

(c) Three mo nths

(d) Six months.
(iii) As per section 387 of the Compa nies Act, 195 6, total re mune ration to
manager should not exceed the rate of net profit of the company except
with approval of the Central Go vernm ent
(a) 5%
(b) 2%
(c) 11%
(d) 10%
(iv) Profit on cancellation of own debentures should be transferred to
(a) Profit and loss account
(b) Profit and loss appropriation account
(c) Capital reserve account
(d) Rese rve capital account.
(v) Profit prior to incorporation is transferred to
(a) General reserve
(b) Capital reserve
(c) Goo dwill account
(d) Pro fit and loss acco unt.
(1 mark each)
2010 - June [1] {C} (c) Re-write the following sentences after filling-in the
blank spaces with appropriate word(s)/figure(s):
(i) Goodwill is
asset.
(ii) Preliminary expe nses being of capital nature may be written-off against
.
(iii) Collateral security implies
security given for a loan.
(iv) Interim dividend is a dividend declared at any time between the
where the final dividend is declared.
(v) Stock reserve for unrealised profit in respect of inter-company
transactions should be created by debiting
and crediting
while preparing co nsolidated p rofit and loss account.
(1 mark each)

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I-11

Paper - 2B : Cost and Management Accounting

Chapter-1 : Introduction to Cost and Management Accounting
2010 - June [7] (a) Write short notes on the following:
(ii) Activity based costing
(3 marks)
Cha pter-2 : M aterial C ost
2010 - June [8] (a) A c omp any ma nufactures 5,0 00 units of a product per
month. The cost of placing an order is Rs. 100. The purchase price of the raw
material is Rs. 10 per kg. The re-order period is 4 to 8 weeks. The consumption
of raw materials varies from 100 kgs. to 450 kgs. per week, the average
consumption being 275 kgs. The carrying cost of inventory is 20% per annum.
You are required to calculate
(i) Re-o rder quantity
(ii) Re-order level
(iii) Maximum level
(iv) Minimum level
(v) Average stock level
Assume 52 weeks in a year.
(6 marks)
Chapter-4 : Direct Expenses and Overheads
2010 - June [8] (b) Following inform ation is availab le for a factory for the year
2008:
Rs.
Direct material
..........
3,00,000
Direct wages
..........
2,50,000
Factory overheads
..........
1,50,000
Administrative overheads
..........
1,68,000
Selling overheads
..........
1,12,000
Distribution overheads
..........
70,000
Pro fit
..........
2,10,000
A work order has been executed in the year 2008 and the expenses incurred
werematerials Rs. 4,000; and wages Rs. 2,500.
Assuming that in the year 2009 the rate of factory overheads has
increased by 20% , distribution overheads have gone down by 10% and selling
and administration overheads have each gone up by 12.5%, at what price
should the product be sold so as to earn the same rate of profit on the selling
price as in the year 2008? Factory overhead s are based on direct wages while
other overhead s are based on factory co st.
(9 marks)

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I-12

Chapter-6 : Budgetary Control

2010 - June [7] (a) Write short notes on the following:
(i) Superiority of zero base budgeting (ZBB) to traditional budgeting
(3 marks)
Chapter-7 : M arginal Costing
2010 - June [7] (b) Two m anufacturing companies which have the following
operating details decided to merge:
Company !I
Company !II
Capacity utilisation (%)
90
60
Sales (Rs. in lakhs)
540
300
Variab le costs (Rs. in lakhs)
396
225
Fixed co sts (Rs. in lakhs)
80
50
Assuming that the proposal is implemented, calculate
(i) Break-even sales of the merged plant and the capacity utilisation at
that stage.
(ii) Profitability of the merged plant at 80% cap acity utilisation.
(iii) Sales turnover of the merged plant to earn a profit of Rs. 75 lakh.
(iv) W hen the merged plant is wo rking at a capa city to earn a profit of
Rs. 75 lakh, what percentage increase in selling price is req uired to
sustain an increase of 5% in fixed o verhead s?
(9 marks)
Chap ter-8 : Analysis & Interpre tation of Financial Statemen ts
2010 - June [6] Summarised income statement and balance sheet of
Progressive Ltd. are given below:
Income Statement for the year ended 31 st December, 2009
(Rs. 000)
Sales
1,600
Less: Cost of goo ds sold
1,310
Gro ss margin
290
Less: Selling and administration expenses
40
Net operating income (EBIT)
250
Less: Interest
45
Earnings before tax
205
Less: Tax paid
82
Net income after tax
123
Earnings per share (EPS) is Rs. 3.075.
Balance Sheet as at 31st December, 2009
Liabilities
(Rs. 000)
Paid-up capital (40,000) shares of Rs. 10 each fully paid)
400
Retained earnings
120
Debentures
700

CS Executive Programme Module- I (New Course)

Creditors
Bills payable
Other current liabilities

I-13

180
20
80
1,500
(Rs. 000)
800
400
175
50
1,500

Assets
Net fixed assets
Inventory
Debtors
Marketable securities
Cash
Price per share is Rs. 15.
Industrys average ratios are:
Current ratio
..........
2.4
Quick ratio
..........
1.5
Sales to inventory
..........
8.0
Average collection period
..........
36 d ays
Price per share/book value of share
..........
1.6
Debts to assets
..........
40%
Times interest earned
..........
6
Pro fit margin
..........
7%
Price to earnings ratio
..........
15
Return to total assets
..........
11%
(i) Progressive Ltd. would like to borrow Rs. 5,00,000 form a bank for
less than a year. Evaluate the firms current financial position by
calculating ratios that you feel would be useful for the banks
evaluation.
(ii) W hat problem areas are suggested by your ratio analysis? W hat are the
possible reasons for them?
(iii) Do you think that the bank should give the loan?
(iv) If Progressive Ltd.s inventory utilisation ratio (sales to inventory)
and average collection period were reduced to industry average, what
amount of funds would be generated?
(15 marks)
Chapter-9 : Cash Flow Statement
2010 - June [7] (a) Write short notes on the following:
(iii) Cash, cash equivalents and c ash flows.
(3 marks)

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I-14

Chapter-10 : Objective Questions

2010 - June [5] {C} (a) State, with reasons in brief, whether the following
statements are corre ct or incorrect:
(i) Under Flux M ethod , labour turnover is calculated by number of
workers left divided by average numbe r of workers.
(ii) In cost plus con tracts, the contractor runs a risk of incurring a loss.
(iii) There is no need to record attendance of piece rate workers since
attendance is not relevant for ascertaining the amount of wages to be
paid.
(iv) A profit centre whose performance is measured by its return on
investment (ROI) is known as investment centre.
(v) Contributio n is not only the criterion for deciding p rofitability.
(2 marks each)
2010 - June [5] {C} (b) Choose the most approp riate answer from the given
options in respect of the following:
(i) The rate of change of labour force in an orgainsation during a
specified period is called
(a) Labour efficiency
(b) Labour turnover
(c) Labour p roductivity
(d) None of the above.
(ii) W hen a contract is not complete at the end of the year, profit on
incom plete contract
(a) Is not considered
(b) Is considered for inclusion in the profit for the year
(c) Is considered for the inclusion of a part of the year
(d) None of the above.
(iii) When prices fluctuate widely, the method that will avoid the efect of
fluctuations is
(a) FIFO
(b) LIFO
(c) Simple average
(d) W eighted average.
(iv) Fixed costs remain fixed
(a) Over a short period
(b) Over a long period and within relevant range
(c) Over a short period and within a relevant range
(d) Over a long period.

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I-15

(v)

W hen the under or over abso rbed overhead s amo unt is significant, it
should be dispo sed o ff by
(a) Transferring to costing profit and loss account
(b) Using a sup plementary ra te
(c) Carry over to next year
(d) None of the above.
(1 mark each)
2010 - June [5] {C} (c) Re-write the following sentences after filling-in the
blank spaces with appropriate word(s):
(i)
expe nses are excluded from cost.
(ii) An account giving details of cost of production, cost of sales and profit
made during a particular period is called
.
(iii) The process of apportionment of factory overheads among production
and service department is called
of factory overheads.
(iv) The time for which the employer pays remuneration to workers but
obtains no direct benefit is called
.
(v) A system that keeps a running and continuous record that tracks
inventories and cost of goods sold on day-to-day basis is called
.
(1 mark each)

Paper - 3 : Tax Laws

Chapter-4 : Incomes Which Do Not Form Part of Total Income
2010 - June [3] (b) Distinguish between the following:
(ii) Free trade zone and sp ecial ec onomic zo ne.
Chapter-5 : Computation of Total Income Under Various Heads
2010 - June [1] {C} (c) Particulars of income received by Mrs. Sarita for the
year ended 31st Ma rch, 201 0 are as follows:
(i) Fam ily pension received from the Governmen t of Madhya Pradesh
Rs.15,000.
(ii) Royalty received from a publisher Rs.42,700. She spent Rs. 2,700 on
books, stationery, typing etc.
(iii) W innings from lotteries (gross) Rs. 90,000.
(iv) W innings from horse race (net) Rs.35,000.
(v) Interest from tax-free debentures of a public company (listed)
Rs.18,000.
(vi) Interest on tax free notified government bonds Rs. 10,000.

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(vii)

I-16

Dividend received from a foreign company (net) Rs.8,000. Nothing

has been paid to the G overnment of Ind ia out of tax deducted at
source.
From the above information, comp ute income from other sources of Mrs.
Sarita for the assessment year 2010-11.
(5 marks)
2010 - June [2] (b)W rite short notes on the following:
(ii) Taxation of zero coupon bonds
(iii) Pro fit in lieu of salary.
(3 marks each)
2010 - June [3] (b) Distinguish between the following:
(i) Mercan tile system o f accounting and cash system o f accounting.
(iii) Exemption to cap ital gains under se ction 5 4G and exemp tion to
capital gains under section 5 4G A.
(2 marks each)
2010 - June [4] (c) Discuss the cases in which payment by way of
loan/advance to the extent of accumulated profits by a closely held compa ny
is treated as dividend under section 2(22)(e).
(4 marks)
2010 - June [5] (a) Amit is a cloth merchant in Ghaziabad. From the following
profit and loss account for the year ended 31th March, 2 010 , compute his
taxable income and tax payable for the assessment year 2010-11 :
Rs.
Rs.
Opening stock
1,00,000
Sales
40,00,000
Purchases
25,00,000
Closing stock
3,00,000
Rese rve for bad debts
10,000
Gift from friend
70,000
Household expenses
20,000
Gift from brother
80,000
Advertisement
40,000
Depreciation
20,000
Salaries and wages
1,20,000
Reserve for future losses
20,000
Travelling expenses
15,000
Expenditure on scientific
research
50,000
Net profit
15,55,000
44,50,000
44,50,000
Additional information :
(i) Ho useho ld expenses include an amo unt of R s. 5,00 0 paid for premium
on life insurance policy of Am it.
(ii) Depreciation admissible as per the income-tax rules is Rs. 30,000.
(iii) Advertisement costing Rs. 10,000 appeared in a newspaper owned by
a political party is included in the total amount spent on ad vertisem ent.

CS Executive Programme Module- I (New Course)

(iv)

I-17

Expenditure on air fare from Delhi to Bangalore and from B angalore

to Delhi of a sales manager costing Rs. 10,000 is included in travelling
expenses. The sales manager is otherwise entitled for a second class
AC train where the expenditure would be Rs. 4,000.
(v) Expenditure on scientific research relates to the mo ney spent by A mit
on cond ucting research relating to the business of cement which he
proposes to undertake in future.
(7 marks)
(b) Explain with the help of suitable illustration how capital gains are
computed under section 45(2) in case of conversion of capital asset into stockin-trade.
(4 marks)
2010 - June [6] (a) Naveen owns a house at Indo re. Its municipal valuation is
Rs. 24,0 00. H e incurred the following expenses in respect of the house
property :
Municipal tax @ 20% , fire insurance premium Rs. 2,000 and land revenue R s.
2,400. He took a loan of Rs. 25,000 @ 16% per annum on 1 st April, 2006. The
whole amount is still unpaid. The house was completed on 1 st April, 2009. Find
out the income from house property for the assessment year 2010-11 in respect
of the following options:
(i) If the house is used by the assessee throug hout the previous year for
his residential purpose; and
(ii) If the house is let-out for residential purposes on monthly rent of Rs.
2,000 from 1 st April, 2009 to 31 st January, 2010 and self-occupied for
the remaining period.
(6 marks)
Chapter-6 : Aggregation of Income, Set-off or Carry Forw ard of Losses
and Deductions from Total Income
2010 - June [3] (a) An asset is transferred by a person to another person under
a partly revocable transfer whereby a part of the asset will revert back to the
transfero r. W ho shall be liable to pay tax in respect of income from the asset
transferred as per section 61?
(2 marks)
2010 - June [3] (b) Distinguish between the following:
(iv) Intra-hea d adjustment and inter-head adjustment.
(2 marks)
Chap ter-7 : Taxa tion of Ind ividuals, H UF , Firms, Association of P ersons,
Coo perative Societies and N on Residents
2010 - June [3] (c) Ram and Shyam are partners in Mo zart Co., a partnership
firm, which is engaged in m anufac turing carpets. They share profits and losses
in the ratio of 2:3. The profit and loss account of the firm for the year ended
31st M arch, 201 0 is as follows:
Liabilities
Rs.
Cost of goo ds sold
10,00,000
Depreciation
50,000

CS Executive Programme Module- I (New Course)

Salary to staff
Remuneration to partners:
Ram
Shyam
Interest on capital @ 15% :
Ram
Shyam
Sundry expenses
Net profit
Assets
Sales
Dividends
Winnings from lotteries (Rs.2,00,000)

I-18
1,00,000

Rs. 2,50,000
Rs. 1,20,000
Rs. 45,000
Rs. 67,500

3,70,000

1,12,500
1,00,500
7,35,200
24,68,200
23,00,000
28,200
1,40,000
24,68,200

Additional information :
(i) The firm donated Rs. 30,000 to National Defence Fund and this
amount is included in sundry exp enses.
(ii) Depreciation admissible under the income-tax rules is Rs. 68,000.
(iii) The firm is evidenced by partnership deed.
Compu te the taxable income and amou nt of tax liab ility of the firm for the
assessment year 2010-11.
(7 marks)
Chap ter-8 : Filing of R eturns, Sig natures, E-Filings, Assessment and
Reassessment
2010 - June [2] (b)W rite short notes on the following:
(i) Belated return
(3 marks)
2010 - June [2] (c) Discuss the procedure for rectification of mistakes under
the Income-tax Act, 1961.
(4 marks)
2010 - June [5] (c) D escribe the powers of Central B oard of Direct Taxes
(CBDT) under the Income-tax Act, 1961.
(4 marks)
Chapter-9 : TDS and O ther Related Tax Matter
2010 - June [4] (b) State the provisions regarding deduction of tax at source
in respect of the following inco mes:
(i) W innings from horse races.
(ii) Payment by way of fees or royalty for professional or technical
services.
(iii) Paym ent of co mpe nsation on acquisition of immovable property.
(2 marks each)

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I-19

2010 - June [6] (b) What are due dates of payment of advance tax in the case
of corpo rate and no n-corpo rate assessees?
(3 marks)
2010 - June [6] (c) How is the liability to advance tax computed as per
provisions of section 210?
(3 marks)
2010 - June [6] (d) Explain the deductions which are available to an assessee
unde r section 57 while co mpu ting taxab le income chargeable under the head
incom e from other sources.
(3 marks)
Chapter-12 : The Wealth Tax Act, 1957
2010 - June [4] (a) Ram an has following assets and liabilities as on 31st
March, 2010. Compute his net wealth and wealth-tax liability for the
assessment year 2010-11:
Market Value
(Rs.)
(i) Cash in hand
75,000
(ii) Cash at bank
10,00,000
(iii) Residential house (Loan taken to purchase
this house Rs. 5,00,000)
45,00,000
(iv) Land in rural area (it is within 5 kms. from D elhi)
48,00,000
(v) Land in urban area (construction not permitted
under the law, loan taken to purchase this land
Rs.3,00,000)
28,00,000
(vi) Motor car for p ersonal use
14,00,000
(vii) Jewellery
6,00,000
(viii) Aircraft for personal use (Loan taken to purc hase
aircraft Rs. 20,00,000)
1,00,00,000
(ix) Farm house situated within 20 kms. from local
limits of municipality
24,00,000
(x) One let-out residential house given on rent throughout
the year (Loan taken to con struct this house
Rs. 2,00,000)
20,00,000
(5 marks)
Chapter-14 : Lev y, Collection and Pa yment of Serv ice Tax along w ith
CEN VAT Credit Rules
2010 - June [7] Attempt the following:
(a) As per rule 2(1)(d) of the Service Tax Rules, 1994, who is the person
specified to be liable for paying service tax in respect of the following
services

CS Executive Programme Module- I (New Course)

(i)
(ii)
(iii)

I-20

Telecomm unication services.

Services in relation to general insurance b usiness.
Services in relation to any taxable service or service to be provided by
any person from a foreign country to any person in India.
(iv) Business auxiliary service of distribution of mutual fund by a mutual
fund distributor or an agent, as the case may be.
(v) Spo nsorship services provided to any body corporate or firm located
in India.
(1 mark each)
(b) (i) Which category of persons must mandatorily obtain registration under
Chapter V of the Finance Act, 1994?
(3 marks)
(ii) W hat are time limits for making application for registration and
granting registration for service tax under Chapter V of the Finance
Act, 1994?
(2 marks)
(c) (i) W hen is an assessee registered under service tax required to surrender
the registration certificate?
(ii) On which amou nt amo unt of bill raised on client or amount actually
received from the client, service tax is payable?
(iii) If an assessee pays service tax on the billed amo unt but he gets less
amo unt from his customers, can he get refund from the governm ent?
(iv) If the service provider fails to recover service tax o n a bill of Rs.
12,000 where service tax is not shown separately in the invoice, what
will be the amount of service tax?
(v) W hen will the small service provider claiming exemption from paying
service tax apply for registration under service tax? (1 mark each)
(d) Com ment on the follow ing statements
(i) Service tax is payable as soon as advance is received even if the
service is provided later.
(2 marks)
(ii) Excess service tax collected is to be p aid to the Central Government.
(3 marks)
(e) Discuss the exemption available to small service providers from paying
service tax.
(5 marks)
Chapter-15 : Value Added Tax (VA T)A n Overview
2010 - June [8] Attempt of the following:
(i) As a result of introduction of value added tax (VAT ), the central sales
tax will be phased out. Ex plain the stateme nt.
(5 marks)

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I-21

Chapter-16 : Computation and Other Procedural Aspects R elating to

VAT
2010 - June [8] Attempt of the following:
(iii) VAT liability of a dealer is calculated by deducting input tax credit
from tax collected on sales during the p ayment period. D iscuss with
the help of a suitable illustration.
(iv) Discuss the cases of purchases in respect of which generally no input
tax credit is available.
(v) Exp lain the va rious m ethod s of compu tation of VAT liab ility.
(5 marks each)
Chapter-17 : Appointment, Jurisdiction and Powers Authorities and The
Certifications for P rofessiona ls
2010 - June [8] Attempt of the following:
(ii) Discuss in what respects VAT system as adopted in India is deficient
in the direction of getting maximum benefits of VAT.
(5 marks)
Chapter-19 : Objective Questions
2010 - June [1] {C} (a) Choose the most appropriate answer from the given
options in respect of the following having regard to the provisions of the
relevant direct tax laws:
(i) W hich of the following income is agricultural income
(a) Rent received from agricultural land
(b) Income from dairy farm
(c) Income from poultry farm
(d) Dividend from a company engaged in agriculture.
(ii) The term income includes the following types o f incomes
(a) Legal
(b) Illegal
(c) Lega l and illegal both
(d) None of the above.
(iii) Every year, the residential status of an assessee
(a) May change
(b) W ill certainly change
(c) W ill not change
(d) None of the above.
(iv) Sneha is an employee in a private company. In the previous year she
received salary Rs. 1,80,000 and entertainment allowance Rs. 12,000.
She spent Rs. 6000 on enterta inment. Und er section 16 (ii), she is
entitled to deduction of-

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I-22

(a) Rs.12,000
(b) Rs. 6,000
(c) Rs. 5,000
(d) Nil
(v) In whose total income, the income of a minor child is included
(a) Father
(b) Mother
(c) Father and mother bo th
(d) Parent whose total income is greater
(1 mark each)
(b) State, with reasons in brief, whether the following statements are correct or
incorrect:
(i) An Indian com pany is always resident in India no matter where and to
what extent its control and management is situated.
(ii) Rent from house property let-o ut by an assessee to his employees
when such letting is incidental to his m ain business, will be chargeab le
to tax under the head incom e from house property.
(iii) Income by way of winnings from lotteries in the hands of a dealer as
a regular business activity is not chargeable to tax under the head
profits an d gains of business or profession.
(iv) Income from transfer of self-generated goodwill of a profession is not
chargeable to tax under the hea d cap ital gains.
(v) Literary award s instituted by the Central Government are exempted
from income-tax.
(1 mark each)
2010 - June [2] (a)Re-write the following sentences after filling-in the blank
spaces with appropriate word(s)/figure(s):
(i) The maxim um ex emp tion limit under the Income-tax Act, 196 1 in case
of a wom an who is less than 65 years of age and who is non-resident
in India is Rs.____________.
(ii) The time limit for filing an appeal before the appellate tribunal on
receipt of an ap peal ord er from the Comm issioner is ____ ___ days.
(iii) W ealth-tax is charged at the rate of ______ % on net wealth in excess
of Rs._________ lakh under the Wealth-tax Act, 1957.

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(iv)
(v)

I-23

Business loss relating to illegal business is ________ as deduction.

Marriage gift from a non-relative is _____ ___ to tax. (1 mark each)

Shuchita Prakashan (P) Ltd.

25/19, L.I.C. Colony, Tagore Town,
Allahabad - 211002
Visit us : www.shuchita.com