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Department of Commerce Final Exam May 2011 Semester III

Time: 30 minutes Subjects: Income Tax Law Choose the best option. 1. While differentiating between revenue or capital receipt, one should see it from the point of a person: a) Receiving it b) Giving it c) Both 2. If an income is earned through intellectual skill it is called a) Vocation b) Profession c) Commerce 3. If A is the consideration received, B is the cost of an asset and C is the capital gain, the formula of the capital gain will be a) A-B = C b) A+ B = C c) B-A = C 4. a) b) c) There are ________ major stages of assessment procedure. 4 5 3 Marks: 30 Paper: Objective

5. the mode of payment of tax before assessment is known as a) unexpired tax b) advance tax c) unexpected tax 6. ______________ can exempt any person or class of persons from payment of penalty. a) Federal Govt b) Commissioner inland revenue c) FBR 7. a) b) c) ____________ is the highest income tax authority in Pakistan. CBR FBR Federal Govt

8. The Appellate Tribunal Inland Revenue consists __________ types of members. a) 3 b) 2 c) 4 9. Central board of revenue became Federal Board of revenue in a) 2004 b) 2007 c) 1979 10. if a taxpayer is not satisfied with an order passed under the income tax ordinance 2001, the very first appeal can be made to

a) commissioner appeals b) appellate tribunal c) commissioner Mark True or False. 1. Sale of an asset is a capital receipt. 2. Profit from the speculative business should not be kept separate from income from business. 3. No loss should be recognized under income tax ordinance 2001 on the disposal of the jewellery. 4. A company should furnish return of income if it earns even 10,000 as profit. 5. A return which is not signed by the tax payer is an invalid return. 6. A person making a misleading or false statement in his income tax affairs shall pay a penalty of 25000 or 100% of the tax shortfall whichever is higher. 7. The commissioner must assign a solid reason before terminating a valuer. 8. In any appeal related to income tax the burden of proof falls on the taxpayer. 9. After Supreme Court a taxpayer can file an appeal to the president of Pakistan. 10. The person who is or has been an advocate of Supreme Court and is qualified to be a judge of Supreme Court can be the judicial member of an appellate tribunal. Give short answers. 1. Who will decide whether an isolated transaction is a revenue or capital receipt? 2. What is included in business? 3. Explain capital gain? 4. Who has the power to extend for furnishing the return? 5. What happens if a person required under law to furnish the return of income fails to do within due date? 6. Who can impose a penalty? 7. Draw Appeal Flow Chart. 8. Why are income tax authorities appointed? 9. Who is a valuer? 10. Who is final fact finding authority of income tax?