Tax Book 2023

Chapter 21 ___Solved Past Papers Income Tax Numericals of CA Module C - (2001 to 2022)

750,000 2,050,000

Net income 2,850,000 950,000

(b) During the tax year 2023, Salman Shahid sold the following assets:

(i) A vehicle used by manager-in-charge of his garment factory for Rs. 7 million.

The vehicle was purchased for Rs. 8 million in tax year 2020.

Q.5 (b) Autumn 2019

(i) A machine for Rs. 350,000 on 1 June 2023, which he had imported from Malaysia for Rs. 1,900,000 on 1 May

2023, to start a new business. The machine was badly damaged during the shipment from Malaysia, rendering it unfit for

Conceptual Approach to Taxes ___ 491

Required:

Answer

(i) Loss on disposal of a vehicle used by manager Rupees

6,562,500

(A is the amount received on disposal of the vehicle; B is the amount allowed as per

law i.e. Rs. 7.5 million; and C is the actual cost of acquiring the vehicle.)

(i) A machine for Rs. 350,000 on 1 June 2023, which he had imported from Malaysia for Rs. 1,900,000 on 1 May

2023, to start a new business. The machine was badly damaged during the shipment from Malaysia, rendering it unfit for

use. He received insurance claim of Rs. 1,840,000 as damages on 15 May 2023. Charges incurred in connection with the

submission of claim with insurance company were Rs. 38,000.

Under the provisions of the Income Tax Ordinance, 2001 compute under the appropriate head of income, the amount to

be included in the taxable income of Salman Shahid for the tax year 2023.

Consideration received on disposal of passenger transport vehicle not plying for hire

A×B/C Where (7×7.5/8)

Written down value of vehicle

(7.5×85%×85%×85%)

(4,605,938)

Income from business 1,956,562

(ii) Disposal of machine

The capital gain is determined as follows: Rupees

Insuranceclaimreceivedfromtheshipping

company

1,840,000

Scrap value of the machine 350,000

2,190,000

Less: Purchase price of the machine (1,900,000)

Less: Documentation charges incurred (38,000)

law i.e. Rs. 7.5 million; and C is the actual cost of acquiring the vehicle.)

Less: Documentation charges incurred (38,000)

Income from capital gain 252,000

(a)

Rs. in '000

140,400

Q.1 March 2019

Mustafa, Ali and Zain are partners of a resident firm in Pakistan, under the name and style MAZ Enterprises

(MAZE) which is engaged in manufacturing and local supply of auto spare parts. All partners have equal share

of profits and losses in the firm.

Following information has been extracted from accounting records of MAZE for the tax year 2023:

Sales 140,400

(91,260)

49,140

(21,430)

(15,740)

(37,170)

1,900

13,870

Administrative and selling expenses

Financial charges

Other income

Profit before tax

Sales

Cost of goods sold

Gross profit

Conceptual Approach to Taxes ___ 491