Tax Book 2023

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

Additional Information:

(i)

(ii)

(iii) Cost of sales includes a penalty of Rs. 1 million imposed by the sales tax authorities

(iv) Administrative expenses include:

Rs. 3 million paid in cash for electricity expenses

Rs. 5.2 million for purchase of two different types of computer software which will

be installed and used from March 1, 2022. One of such computer software is of Rs. 4

For the purpose of balancing, modernization and replacement of existing

manufacturingmachineries,thecompanypurchasedplantandmachineryfromborrowed

funds.Themachinewas purchased from anon-resident supplier atacost of Rs. 63

million inJuly 2022 havingusefullifeoftenyears.Asthetitleinthegoods(machinery)

wastransferred outsidePakistan,therefore,SLdidnotdeductanytaxfrompayment

made to supplier.

Assume thattax depreciation onallassetsacquired before July 2022 isthe same

astheiraccountingdepreciation. However, theplantandmachineryreferredin(i)above

is depreciated on straight line basis.

Conceptual Approach to Taxes _____763

(v) Amounts included in the head of other charges are as follows:

(vi) The total other income of Rs. 35.2 million consists of the following amounts:

Gain on sale of scrap Rs. 200,000.

(vii)

Rs. '000'

13,000

6,800

40,200

60,000

(vii)

be installed and used from March 1, 2022. One of such computer software is of Rs. 4

million having useful life of five years and other having useful life of one year.

Rs. 2 million paid for annual repair and maintenance charges out of which Rs. 0.5 million

has been incurred for the reconstruction of a car parking on the company's premises.

As a part of corporate social responsibility the company paid a donation of Rs.10 million

to a university established under provincial law by the Sindh Government

Rs. 60,000 paid for refreshment of directors at the Board of Directors' meeting.

Rs. 35 million which has been earned by the company in return of consulting

services provided to Chinese Government, whereas gross receipt was Rs. 80 million.

The company did not pay any tax in China on such income.

Unadjusted business loss,broughtforward from tax year 2010 amount to Rs. 60

million, comprises the following:

Unabsorbed tax depreciation

Amortization of pre-commencement

Unadjusted loss from business

ThebankdeductedtaxRs.1.120,000onprofitondebtandexportproceedsofservices.

Total unadjusted business loss

(vii)

Rs. '000'

*Advance tax paid under section 147 6,200

68

1,890

Tax paid on import of raw material

ThebankdeductedtaxRs.1.120,000onprofitondebtandexportproceedsofservices.

However, the company paid following tax during the year:

Tax paid on import of plant & machinery

*The company has paid advance tax on the basis of estimation.

Conceptual Approach to Taxes _____763