10-28-2010, 05:44 PM
TWO PORTIONS TO SOLVE THIS QUESTION
1- BUSINESS INCOME
2- AGRICULTUREAL INCOME
1-SOLUTION
SALES RS. 11,250,000
LESS COST OF SALES
MKT VALUE OF GOODS PRODUCED BY
THE COMPANY IS RS. 3,750,000*
RAW MATERIAL PURCHASED 2,250,000
MANUFACTURING EXPENSES 1,125,000
TOTAL COST OF SALES ( 7,125,000)
GROSS PROFIT 4,125,000
LESS OPERATING EXPENSES
SELLING + ADMIN + FINANCE COSTS (2,400,000)
NET PROFIT RS. 1,725,000
AGRICULTURAL INCOME
MKT VALUE OF GOODS PRODUCED AND USED AS RAW MATERIAL RS. 3,750,000
LESS EXPENSES ON AGRICULTURE (1,500,000)
NET AGRICULTURE INCOME RS. 2,250,000
NOTE* RULE 11 ( AGRICLUTURE PRODUCE AS RAW MATERIAL)
Where a cultivator or receiver of rent in kind uses the agriculture produce as raw material, in his business, then the income chargeable to tax under the head " INCOME FFROM BUSINESS" SHALL BE COMPUTED AS FOLLOW
TOTAL INCOME - MKT VALUE OF AGRICULTURE PRODUCE UTILIZED IN BUSINESS ARE RAW MATERIAL.
1- BUSINESS INCOME
2- AGRICULTUREAL INCOME
1-SOLUTION
SALES RS. 11,250,000
LESS COST OF SALES
MKT VALUE OF GOODS PRODUCED BY
THE COMPANY IS RS. 3,750,000*
RAW MATERIAL PURCHASED 2,250,000
MANUFACTURING EXPENSES 1,125,000
TOTAL COST OF SALES ( 7,125,000)
GROSS PROFIT 4,125,000
LESS OPERATING EXPENSES
SELLING + ADMIN + FINANCE COSTS (2,400,000)
NET PROFIT RS. 1,725,000
AGRICULTURAL INCOME
MKT VALUE OF GOODS PRODUCED AND USED AS RAW MATERIAL RS. 3,750,000
LESS EXPENSES ON AGRICULTURE (1,500,000)
NET AGRICULTURE INCOME RS. 2,250,000
NOTE* RULE 11 ( AGRICLUTURE PRODUCE AS RAW MATERIAL)
Where a cultivator or receiver of rent in kind uses the agriculture produce as raw material, in his business, then the income chargeable to tax under the head " INCOME FFROM BUSINESS" SHALL BE COMPUTED AS FOLLOW
TOTAL INCOME - MKT VALUE OF AGRICULTURE PRODUCE UTILIZED IN BUSINESS ARE RAW MATERIAL.
