Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

Question. 2 Summer 2018

The Commissioner Inland Revenue is conducting the audit of Danish Enterprise (DE) under the

SOLVED PAST PAPERS INCOME TAX NUMERICALS OF

ICMAP STAGE IV - (2003 TO 2018)

Note:AllthefollowingquestionshavebeensolvedundertheIncometaxOrdinance, 2001

effective from July 01, 2022 unless otherwise specifed in the Finance Act, 2022.

30

Chapter

Conceptual Approach to Taxes _____741

. Donation of Rs. 232,000 paid to karachi University, established by the Federal Govermment.
. Initial allowance of Rs. 1,000,000 an a used equipment acquired locally from SAF Limited.
. Bad debt in respect of a staff loan is Rs. 62,000.

Required:

(b)

(c)

The Commissioner Inland Revenue is conducting the audit of Danish Enterprise (DE) under the

Income Tax Ordinance, 2001 and is considering to allow/ disallow the following

. Financial charges on a vehicle acquired on finance lease from Hassan Leasing amounted to Rs.
90,000 and depreciation amounted to Rs. 275,000. Lease rentals paid during the year amounted to
Rs. 325,000.
. Expenditure of Es. 340,000 on promotion of a product, which is expected to generate revenue for
14 year.
. Penalty for late delivery amounting to Rs. 77,000 which had to be paid to a client on account of
negligence on the part of the procurement Manager.

Evaluate the above deductions and suggest appropriate treatment, as per the Income Tax

Ordinance, 2001 wherever necessary.Mars (Private) Limited (MPL) and Jupiter (Private) Limited (JPL) has just concluded an

agency and principal relationship via an agreement. According to which, MPL being an

agent of JPL, would be remunerataed a commission of 10% of sales. Discuss the

taxability of the commission under the light of Section 233 of hte Income Tax Ordinance,

2001.

Mr. Haider is a Tax Manager in one of the leading oil production company. He signed an

employment contract at a salary of Rs. 175,000 per month. The tax deducted from his

montly remuneration amounts of Rs. 19,500.montly remuneration amounts of Rs. 19,500.

On April 30, 2023, he resigned from his current employment and immediately joined a

tax firm in Saudi Arabia namely Al-Mazboot Consultants (AMC) as a Senior Manager

Taxation, from where he earns monthly salary equivalent of PKR 770,000. AMC paid

75% of his salary in Saudi Arabia and remitted the remaining 25% to his bank account in

karachi through normal banking channerl. Mr. Haider remained in Saudi Arabia during

the rest of the tax year 2023.

Conceptual Approach to Taxes _____741