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MOCK TEST 1

MULTIPLE CHOICE QUESTIONS

Write the most appropriate answer to each of the following multiple choice questions by

choosing one of the four options given. All questions are compulsory.

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SECTION A – INCOME TAX LAW

All questions pertaining to Income Tax, relate to Assessment year 2019-20, unless stated

otherwise in the question.

1. Mr. Z, a USA citizen left India after a stay of 10 years on 02.07.2016. During the financial

year 2018-19 he comes to India for 1 year on 1.11.2018. In the year 2018-19, he earned ₹

21,000 as Interest from German Derivatives Bonds out of which 1/3rd received in India. The

amount taxable in India should be:

(a) ₹ 21,000

(b) ₹ 7,000

(c) ₹ 14,000

(d) Nil 1

2. In P.Y 2018-19, Anurag Developers enter into a joint development agreement with Mr.

Jhawar, the landowner for taking possession of its land for the purpose of construction of a

residential project. On the date of agreement the developer pays a refundable advance of ₹ 60

lakhs. Further, as per agreement the developer shall be liable to give 45% of the saleable space

in such residential project to the landowner. In the context of Section 194-IC which of the

following statement is not correct:

(a) Refundable advance does not form consideration for the purpose of 194-IC.

(b) 45% saleable space is consideration in kind.

(c) In the given case cash consideration is Nil. Hence, TDS u/s 194-IC is not to be deducted.

(d) TDS u/s 194IC to be deducted @ 1% of ₹ 60 Lakhs 1

3. In Which of the following cases quoting of PAN is not required:

(a) Mr. A makes cash payment to a hotel Radisson BIu, Ahmedabad of ₹ 50,000 against the

bill raised by the hotel.

(b) Mr. Abhishek, in a single transaction, makes contract of ₹1,20,000 for sale/purchase of

securities (other than shares) as defined in section 2(h) of the Securities Contracts (Regulation)

Act, 1956.

(c) Payment to Mutual Funds of ₹ 70,000 for purchase of its units.

(d) Opening of a de-mat account 1

4. The amount of deduction available for revenue expenditure incurred during the previous

year, on scientific research related to the business; and expenditure incurred on scientific

research within the 3 years preceding the date in which the business commences by way of

salary of employees/purchase of materials will be:

(a) Amount of expenditure incurred

(b) 2 x expenditure incurred

(c) 1.5 x expenditure incurred

(d) None of these 1

5. P traced a missing person and was awarded a sum of ₹ 1,00,000 although there was no

stipulation to that effect. The amount so received is:

(a) Casual income and fully taxable

(b) Fully exempted

(c) Casual income and exempt up to ₹ 5,000.

(d) None of the above 1

6. To carry forward and set-off losses, a loss return must be filed by the assessee within the

stipulated time. However, this condition is not applicable to-

(a) Loss from Discontinued business

(b) Loss from speculation

(c) Loss from House Property

(d)Loss from capital assets. 1

7. Rajendra purchased a house in 2012-13 for ₹ 80,00,000 in Mumbai. The said house was

sold by him to Bharat for ₹ 12000000.The other details are hereunder

Agreement entered on 10/8/18.

Sale deed executed on 1/2/19.

The stamp department Valuation on 10/8/18 was ₹ 1,60,00,000 whereas on 1/1/19 it was ₹

1,75,00,000. Further on the date of entering into the agreement ₹ 10,00,000 was got by Account

payee cheque by Rajendra. Compute Capital Gains assuming the matter was referred by

Assessing Officer to Valuation Officer of Income tax department who has ascertained FMV to

be ₹ 1,68,00,000. CII-2012-13=200 and 2018-19=280.

(a) ₹ 80,00,000 (b) ₹ 56,00,000 (c) ₹ 48,00,000 (d) ₹ 65,00,000 2

8. From the following particulars, you are required to work out the tax payable by Mrs. Pinto, aged 70

years

(i) Income from House Property (Net) ₹3,34,000

(ii) Income from Other Sources :

(a) Income from Horse Racing ₹20,000

(iii) Capital gains on transfer of Land - Long-term ₹15,000

(a) ₹12,700 (b) ₹508 (c) ₹11,128 (d) ₹4,09,000 2

9. Sri Swapan, an employee of XYZ Ltd. retired from the company on 30.11.2018. At the time

of his retirement he received ₹150000 as leave salary from his employer. From the following

particulars calculate the taxable amount of leave Salary:

(i)Salary at the time of retirement p.m. ₹9000

(ii) Period of service 20 Years and 10

months

(iii) Leave availed while in service 14 months

(iv) Unavailed leave at the time of retirement 16 months

(v) Average salary for the last 10 months till November ₹8800

(vi) Leave entitlement as per service rule 1½ months for every

completed year of service.

(a) 52,800 (b) 97,200 (c) 1,50,000 (d) 88,000 2

10. Compute the tax liability for assessment year 2019-20 of resident individual who is having

income from short term capital gains of ₹ 5,00,000 arising on transfer of equity shares listed in

recognized stock exchange on which securities transaction is paid and has no other income.

(a) ₹ 33,480 (b) ₹ 39,000 (c) ₹ 48,925 (d) ₹ 36,400 2

11. Mr . A has three minor children – two twin daughters and one son. Income of the two twin

daughters is ₹ 2,000 p.a. each and that of the son is ₹ 1,200 p.a. Compute the income, in respect

of minor children, to be clubbed in the hands of Mr. A.

(a) ₹ 2,500 (b) ₹ 5,200 (c) ₹ 2,200 (d) ₹ 1,000 2

12. Employer purchases a furniture for ₹ 2,00,000 on 1/5/2015 and the same is given to the

employee for use on the same day. Subsequently it is sold for ₹ 12,000 on 1/8/2018. What is

the taxable amount of perquisites for use and transfer of the furniture in 2018-19?

(a) ₹ 1,34,667 (b) ₹1,28,000 (c) ₹6,667 (d) ₹12,000 2

SECTION B – GOODS AND SERVICES TAX

All questions should be answered on the basis of position of GST law as amended up to 31st

October, 2018

13. Which of the given activities does not amount to supply?

(a) A Resident Welfare Association provides the service of depositing the electricity bills of the

residents in lieu of some nominal charges.

(b) An architect in India seeks legal advice from his son settled in London free of cost with regard to

his family dispute.

(c) A dealer of air-conditioners permanently transfers an air conditioner from his stock in trade, for

personal use at his residence.

(d) An electronic commerce operator in India seeks legal advice for its business from its head office in

US free of cost. 1

14. Mr. A has received technical consultancy services from Moon Consultancy, USA. The

import of technical consultancy will not liable to GST, if:

(i) Mr. A pays some consideration for the services received.

(ii) Mr. A pays some consideration for the services received and if Mr. A uses the same service

for business purposes.

(iii) Mr. A uses the said service for business purposes even though he does not paid any

consideration for the same.

(iv) Mr. A uses the said service for personal purposes even though he does not paid any

consideration for the same and he is also a partner in Moon Consultancy.

(v) Mr. A uses the said service for business purposes even though he does not paid any

consideration for the same and he is also a partner in Moon Consultancy.

(a) i, ii and v

(b) ii,iii and v

(c) iii and iv

(d) iii, iv and v 2

15. Which of the following cannot be a reason for cancellation of registration:

(a) There is change in constitution of business form partnership firm to proprietorship.

(b) The business has been discontinued.

(c) A composite tax payer has not furnished returns for three consecutive tax periods.

(d) A registered person, other than composition tax payer, has not furnished returns for three

consecutive tax periods. 1

16. Which documents are required to send goods from branch office in one state to head office

in another state?

(a) Tax Invoice and E-Way Bill

(b) Receipt Voucher and E-Way Bill

(c) Payment Voucher and E-Way Bill

(d) all of the above 1

17. What is the amount of GST liability(CGST+SGST) from the following information for the

month of August’2018 -

a) Commission received on account of foreign exchange transaction between two banks

₹15,00,000

b) Foreign exchange service provided to general public [Sell US$ 15,00,000 for ₹50/per US$,

RBI Reference rate ₹49/per US$].

c) Discount on commercial paper ₹24,00,000

d) Extra amount received from customer for delay of credit card expenses ₹15,00,000

(a) Rs 8,10,000 (b) Rs 5,40,000 (c) Rs 2,70,000 (d) Nil 2

18. A Composite tax payer require to furnish his return in form ____________ on quarterly

basis, within the __________ days from the end of the quarter.

(a) GSTR 5, 20

(b) GSTR 4, 18

(c) GSTR 8, 10

(d) GSTR 6, 13 2

19. Which of the following transactions does not qualify as supply under GST Law.

(i) When a head office supply services to its own branch in another state.

(ii) When a person imports service without consideration for the purpose of his business from

his elder brother living outside India.

(iii) Disposal of car without consideration and where the supplier has not claimed ITC on

purchase of such car.

(iv) When the principal send goods to his agent who is also registered and situated within the

same state.

(a) i and ii

(b) i, ii and iii

(c) iii

(d) ii and iii 1

20. Which of the following service is exempted under GST?

(a) Transmission of electricity by an electricity transmission utility

(b) Application fee charged by DISCOMS for releasing connection of electricity

(c) Rental Charges against metering equipment

(d) Testing fee for meters/ transformers, capacitors etc. 1

21. Transportation of goods by _______ are exempt from GST.

(i) Road

(ii) Inland Water Ways

(iii) Goods Transportation Agency

(iv) Courier Agency

(a) i and ii

(b) iii and iv

(c) i and iv

(d) i[except iii and iv] and ii 1

MOCK TEST 2




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1. Suresh owns two house properties. first property was used half for running his business and

the other half was let-out at ₹4,000 per month. the second house property was wholly used as

residence by Suresh. Municipal value of the two properties were the same at ₹72,000 each per

annum and local taxes @ 10%. Suresh's income from house property for the previous year

2018-2019 will be-

a) ₹33,600 b) ₹31,080 c) ₹28,560 d) ₹62,160 2

2. When a person carries on the business of carrying goods for hire for the whole year with 5

self-owned small vehicle ( gross vehicle weight of each being 1285 kg.) and 3 self-owned

heavy goods vehicles (gross vehicle weight of each being 31,000 kg.), the presumptive income

chargeable to tax under section 44AE would be-

(a) ₹ 4,80,000 (b) ₹ 7,20,000 (c) ₹ 15,66,000 (d) ₹ 3,36,000 2

3. Suppose net profit before interest and remuneration is ₹ 10,00,000. Interest paid to partners

@15% is 150000. Remuneration paid to partners 400000. Compute income of the firm.

(a) ₹10,00,000 (b) ₹8,80,000 (c) ₹4,80,000 (d) 6,18,000 2

4. X and Y formed a partnership firm. Just after formation of the partnership, X brought the

following asset into the firm on 13th October 2018 as his capital contribution (amount in ₹) -

Particulars Gold

Market value on the date of transfer ₹ 5,00,000

Amount recorded in the books of firm ₹ 6,20,000

Actual cost ₹ 3,36,000

Date of acquisition 15-10-2015 Find out the taxable Capital gains (Cost inflation index for F.Y.

2015-16 = 254 and 2018-19 = 280)

(a) ₹ 1,64,000 (b) ₹ 2,84,000 (c) ₹ 96,169 (d) ₹ 2,16,169 2

5. Pushpa Ltd. acquired an agricultural land in Mumbai on 1/7/2002 (indexed cost of acquisition – Rs.

75 Lakhs). The said land was sold for Rs. 2 Crores on 1/1/2019. On 1/3/2019 the company acquired a

new agricultural land for Rs. 80 Lakhs. Taxable amount of capital gains shall be –

a) NIL b) 1 Crore 25 Lakhs c) 45 Lakhs d) None of the above 2

6. Mr. X(HUF) has got the following cash gifts during the PY 2018-19. Compute income

taxable u/s. 56(2)(x).

i) ₹ 3,00,000 and ₹ 2,00,000 received from son and daughter in law of Karta, respectively.

ii) ₹ 2,00,000 and ₹ 1,00,000 received from Married daughter and from son in law of Karta,

respectively.

iii) ₹ 50,000 and 10,000 received from granddaughter (daughter’s daughter) and grandson

(son’s son) of karta, respectively.

(a) ₹ 8,60,000 (b) ₹ 1,50,000 (c) ₹ 2,10,000 (d) Nil 2

7. Mr. X (aged 65 years) received ₹ 12,000 as interest from Post office Savings Bank and ₹

40,000 as interest on Fixed Deposit from Bank. What is the amount of deduction allowed under

section 80TTB?

(a) ₹ 52,000 (b) ₹ 3,500 (c) Nil (d) ₹ 48,500 1

8. Mr. Tulsi has made a recurring deposit of ₹ 10,000 per month for a period of 12 months. The

first instalment of recurring deposit starts from September 1, 2018. Interest of ₹ 9,500 accrue

on such deposit during the PY 2018-19. What would be the TDS amount to be deducted by

bank on such interest payment on recurring deposit ?

(a) ₹ 950 (b) ₹ 1,900 (c) ₹ 475 (d) Nil 1

9. A proprietary business was started by Smt. Rani in the year 2014. As on 1/4/2017 her capital

in business was Rs.3,00,000. Her husband gifted Rs. 2,00,000 on 1/4/2017 , which was invested

by her in business on same date. She earned profits from her business Rs. 1,50,000 in the

financial year 2017-18 and Rs. 3,90,000 in 2018-19. The income to the clubbed for A.Y. 2019-

20 in the hands of Smt. Rani’s husband.

a) Rs. 1,20,000 b) Rs. 1,56,000 c) Rs. 3,90,000 d) NIL 1

10. Arjun has a salary income of ₹4,60,000. He also received an interest of ₹18,000 on his

fixed deposit (after deducting tax @ 10%) and ₹2,000 on his savings account with SBI. He

deposited ₹50,000 in PPF account. The net income tax-liability of Arjun for the assessment

year 2019-20 is-

(a) ₹7,360 (b) ₹15,330 (c) ₹16,270 (d) None of the above 1

11. The total income of Ms. Sanjana consists of

₹ 18,00,000 Long term Capital Gains from building;

₹ 15,00,000 as Short term Capital Loss on sale of Shares subjected to STT

₹ 2,00,000 as loss from Non Speculative business. Further she has carried forward Long term

Capital loss of ₹ 2,00,000 pertaining to assessment year 2007-08. His total income for previous

year 2018-19 shall be:

a) ₹ 1,00,000

b) ₹ 3,00,000 as LTCG and loss of ₹ 2,00,000 from Non speculative business can be carried

forward

c) ₹ 18,00,000 as LTCG and Short term Capital Loss as well as Non Speculative business

loss shall be carried forward

d) ₹ 16,00,000 and Short term capital loss shall be carried forward. 1

12. Income tax return of a local authority shall be verified by_______________.

(a) Chief executive Officer

(b) Principal Officer

(c) Liquidator




October, 2018

13. Mr. X owns a hotel, let out for residential accommodation during the year ended

31.03.2019. What is the amount of GST payable if he let out 5 A/C Room of which the declared

price is ₹ 1,100/ per room but discount given ₹ 200/- per room. Let out for 150 days. 2 non-AC

Room declared value ₹1,000/per room let out for 50 days. Discount given ₹100 per room.

[Hotel at Kolkata and assume rate of GST 12%]

(a) 99,000 (b) 12,000 (c) Nil (d) 1,11,000 1

14. Transportation of ______ by rail from Chennai to Gujrat are exempt from GST.

(i) Pulses (ii) Military Equipments (iii) Electronic Equipments (iv) Biscuits

(a) i and ii

(b) i and iii

(c) ii and iv

(d) All of the above 1

15. Which of the following statement is true for Mr. X a casual taxable person.

(a) Mr. X is not required get registered under GST

(b) Mr. X is required to get registered under GST, if the aggregate turnover in a financial year

exceeds ₹ 20 lakhs.

(c) Mr. X can opt for voluntary registration under GST.

(d) Mr. X is compulsorily required to get registered under GST irrespective of the threshold

limit. 1

16. What is the amount of GST liability(CGST+SGST) of M/s. Workshop (P) Ltd. from the

following Job work services -

(i) Cost of Raw material received from the Manufacturer ₹1,10,000 (Including IGST

₹10,000)

(ii) Manufacturer incurred freight charges for supplying above materials ₹10,000

(iii) Job Worker’s Charge including profit ₹30,000

(iv) Transport charges incurred by Job worker for returning unutilised raw materials

and finished goods ₹20,000

(v) Technology transfer fee in relation job work done ₹5,000.

Assuming the rate of GST is 18%.

(a) ₹ 31,500 (b) ₹ 9,900 (c) ₹21,600 (d) Nil 2

17. Mr. Chiku wants to transport exempted goods i.e. wood charcoal worth Rs. 75,000 along with

taxable goods worth Rs. 48,000 (excluding GST amounting to Rs. 2,000) from Delhi to Gujarat. Which

of the following statements is true in this situation?

(a) E-way Bill is mandatorily required to be issued for both taxable as well as exempted goods.

(b) E-way Bill is not required.

(c) E-way Bill is mandatorily required to be issued only for taxable goods.

(d) E-way Bill is mandatorily required to be issued only for exempted goods. 1

18. Which of the following also liable for Central Excise along with GST –

(a) Motor Spirit

(b) Alcoholic Liquor for Human Consumption

(c) Tobacco and Tobacco Products

(d) Natural Gas 1

19. Mr. Manoj, is registered in West Bengal. He has been engaged in the modeling business.

His taxable turnover during the month of Dec-2018 is 48 lakh taxable @ 18%. He has made

all supplies within the State. The carried forward ITC are as under:-

(i) CGST: Rs. 1,35,000

(ii) SGST: Rs. 1,30,000

(iii) IGST: Rs. 1,00,000

During the month of Dec-2018, he travelled abroad and purchased camera for Rs. 5 lakh on

which he paid IGST of Rs. 90,000. He utilized this camera partly for business purpose and

partly for non-business purposes. Calculate the net GST liability on his output supplies (to be

paid in cash) for the month of Dec-2018.

(a) CGST: Rs. 4,32,000; SGST: Rs. 4,32,000; IGST: Rs. 90,000

(b) CGST: Rs. 1,11,500; SGST:Rs. 3,02,000; IGST: Rs. Nil

(c) CGST: Rs. 1,97,000; SGST: Rs. 3,02,000; IGST: Rs. Nil

(d) CGST: Rs. 1,01,000; SGST: Rs. 3,02,000; IGST: Rs. 90,000 2

20. Charul Creations sells finished goods taxable @2.5% CGST/SGST. Sale= 10 lakhs. Details

of input are as follows:-

Inputs CGST/SGST Amount(₹)

Type A Nil rated 5,00,000

Type B 6% 2,00,000

Type C used zero rated supply 2.5% 1,00,000

Determine the net GST payable.

(a) ₹10,500 CGST, ₹10,500 SGST. (b)₹13,000 CGST, ₹13,000 SGST

(c) ₹25,000 CGST, ₹25000 SGST (d) None of the above. 2

21. Who will decide the rate of GST –

(a) Centre alone

(b) State Alone

(c) Jointly on the recommendation of GST Council

(d) Jointly on the recommendation of Empowered Committee. 1

MOCK TEST 3




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1. Employer gives medical loan for specified disease to employee of ₹ 2,00,000 on 1-10-2018.

Employee gets insurance claim ₹ 80,000 on 1-1-2019 but the same is not repaid to the

employer. What is the taxable perquisite in this case? Assume SBI Rate at 11%.

(a) ₹ 8,800 (b) ₹ 4,400 (c) ₹11,000 (d) ₹2,200 1

2. Mr. X incurred ₹ 74,000 for medical treatment of specified disease of his father aged 65

years. He received a medical insurance claim of ₹ 22,000. Compute net deduction u/s. 80DDB

(a) ₹ 58,000 (b) ₹ 52,000 (c) ₹ 18,000 (d) 74,000 1

3. Deduction under section 35CCD is allowed for:

(i) Donation to National Fund for Rural Development set up by Central Government

(ii) Donation to the National Urban Poverty Eradication Fund set up and notified by the Central

Government.

(iii) Expenditure On Notified Agricultural Extension Project

(iv) Expenditure On Notified Skill Development Project. 1

4. Where an urban agricultural land owned by an individual, continuously used by him for

agricultural purposes for a period of____ prior to the date of transfer, is compulsorily acquired

under law and the compensation is determined by the Central Government, resultant capital

gain is exempt.

(a) One years (b) Two years (c) Three years (d) 6 months 1

5. Mr. Mazumdar has incurred capital expenditure of ₹ 5,00,000 (which includes ₹ 1,00,000

on cost of land) during the previous year, on scientific research related to the business. The

amount of deduction admissible under Section 35 will be :

(a) ₹ 4,00,000 (b) ₹ 8,00,000 (c) ₹ 6,00,000 (d) ₹ 10,00,000 1

6. Mr. A gifts cash of ₹ 1,00,000 to his brother's wife Mrs. B. Mr. B gifts cash of ₹ 1,00,000 to

Mrs. A. From the cash gifted to her, Mrs. B invests in a fixed deposit, income therefrom is ₹

10,000. Aforesaid ₹ 10,000 will be included in the total income of __________.

(a) Mr. A (b) Mr B (c) Mrs. A (d) Mrs B 1

7. Mr. X is employed with XYZ Ltd. on a basic salary of ₹ 5000 p.m. He is also entitled to a

dearness allowance of 5% of basic salary. He is entitled to HRA of ₹ 3000 p.m. He takes an

accommodation on rent in Kolkata and pays ₹ 2500 p.m. as rent for the accommodation.

Compute his taxable HRA.

(a) ₹ 36,000 (b) ₹ 23,700 (c) 12,300 (d) Nil 2

8. Mr. Ravi, a doctor, acquired a residential house for self-occupation on 12.12.2016 for ₹

10,00,000. On 1.5.2018, the said building was used wholly for the purpose of clinic purpose.

Calculate depreciation allowable for the A.Y 2019-20?

(a) ₹ 76,950 (b) ₹ 85,500 (c) ₹ 80,000 (c) Nil 2

9. X is a Govt. employee. He receives Entertainment Allowance of ₹400 p.m. His Basic Salary

is ₹1,000 p.m. and D.A. is ₹500 p.m. Compute Deduction U/s 16(ii).

(a) ₹ 4,800 (b) ₹ 5,000 (c) ₹ Nil (d) ₹ 2,400 2

10. Which of the following statements are true false having regard to the provisions of the

Income-tax Act, 1961:

i) For a dealer in shares and securities, securities transaction tax paid is allowed expenditure

but for investor it is not deductible under capital gains.

(ii) It is mandatory for an assessee to claim depreciation under section 32 of the Income-tax

Act, 1961.

(iii) The family planning expenditure which is of capital nature incurred by a partnership firm

is allowable.

(iv) Amalgamation expenses are fully deductible expenditure.

(v) An assessee purchased goods on credit ₹ 1,00,000 in 2018-19 but paid by crossed cheque

not marked account payee in 2019-20. The entire expenses is disallowed in the year of credit

purchase.

(a) i and iii

(b) iii, iv and v

(c) i and ii


11. Opening capital on 1.4.2018 of proprietorship business of Mrs. X ₹ 10,00,000

Amounted gifted by husband and invested in prop-concern on 1.10.2018 ₹ 2,00,000

Profit for 2018-19 ₹ 1,20,000

Compute amount to be clubbed in the hands of Mr. X for P.Y 2018-19.

(a) ₹ 2,00,000 (b) ₹ 1,20,000 (c) ₹ 20,000 (d) Nil 2

12. Mr. X sold listed equity shares of X Ltd. The Full value of consideration of which ₹

25,00,000 and the Indexed cost of acquisition of which is ₹ 10,00,000 (Cost of Acquisition ₹

8,00,000). FMV as on 31.01.2018 ₹ 9,50,000. Compute tax liability if the shares are bought

and sold through recognized Stock exchange.

(a) ₹ 1,24,800 (b) ₹ 1,35,200 (c) Nil (d) ₹ 1,20,000 2



October, 2018

13. If goods are received in lots or instalment, then:

(a) 50% of ITC can be taken on receipt 1st instalment and balance 50% in receipt of last

instalment.

(b) ITC can be availed upon receipt of last instalment

(c) 100% ITC can be availed upon receipt of 1st Instalment

(d) Proportionate ITC can be availed upon receipt of each Lot/Instalment 1

14. Services by way of warehousing of ___________ is exempt from GST.

(i) Sugar (ii) Milk (iii) Salt (iv) Rice

(a) i and ii

(b) iii

(c) iv


15. The term ‘Goods’ as defined under section 2(52) of The CGST act, 2017 does not

include:

(a) Grass

(b) Money and securities

(c) Actionable Claims

(d) Growing crops 1

16. Which of the following activity shall neither be regarded as Supply of goods nor supply

of services?

(i) Permanent transfer of business assets where ITC has been availed on such assets.

(ii) Temporary transfer of intellectual property right

(iii) Transportation of Deceased

(iv) Services by an employee to the employer in the course of employment

(a) i and iii

(b) ii and iv

(c) i and ii

(d) iii and iv 1

17. Determine time of supply (is case of supply of lift or escalator) when it removal on 25/08/2018,

goods made available 31/10/2018, date of invoice 02/11/2018, date of payment 04/11/2018

a) 25/08/2018 b) 31/10/2018 c) 02/11/2018 d) 04/11/2018 1

18. S Ltd. has its registered office under Companies Act, 2013 at the state of Maharashtra

from where it ordinarily carries on its business. It also has a warehouse in the state of Odisha.

What will be the place of business of S ltd under the GST Law.

(a) Maharashtra

(b) Odisha

(c) Both a and b


19. Determine the time of supply from the following particulars of Welcome Ltd.

15th November,2018 The marriage is booked at an advance of ₹ 2,50,000 was paid

(amount agreed was ₹ 9,00,000)

30th December, 2018 The marriage ceremony took place in the hall

14th January, 2019 Invoice raised for balance amount.

31st January, 2019 The balance amount received

(a) For ₹ 2,50,000 it is 14th January and for ₹ 6,50,000 it is 15th November

(b) For ₹ 2,50,000 it is 15th November and for ₹ 6,50,000 it is 14th January

(c) For full ₹ 9,00,000 it is 14th January

(d) For full ₹ 9,00,000 it is 15th November 2

20. Waste Solutions P. Ltd. has provided the following services during the month of December

2018 –

(i) Charges received from a Private hospital for Collection, transportation, treatment

and disposal of Bio-medical waste ₹2,00,000.

(ii) Charges received from a Govt. hospital for Collection, transportation, treatment

and disposal of Bio-medical waste ₹1,00,000.

(iii) Training fee received from a clinical establishment related to segregation of bio-

medical waste ₹5,0,000

(iv) Charges received from manufacturer of Medicine treatment and disposal of Bio-

medical waste ₹15,00,000.

Determine the GST Liability(CGST+SGST). Assuming the rate of GST 18%.

(a) ₹ 4,14,000 (b) ₹ 2,70,000 (c) ₹ 3,60,000 (d) Nil 2

21. Mr. Mirza, a performing artist, provides the following receipt for the month of

January, 2019:

Particulars ₹

1. Performance of Odishi Dance in stage shows [charges per

performance ₹ 1,25,000] Total 4 shows

5,00,000

2. Performing in television serial [two performance, charges

₹ 70,000 per performance]

1,40,000

3. Performance given to promote a product of a reputed

company in various road shows

2,00,000

4. Coaching in recreational activities relating to arts 1,00,000

5. Activities in sculpture making 2,00,000

Determine GST payable (CGST+SGST). Rate of GST @ 18%.

(a) ₹97,200 (b) ₹ 2,05,200 (c) ₹ 90,000 (d) Nil 2

Answer To Mock Test 1

1. Option (a)

Hint:

During the previous year 2018-19, Mr. Z. was in India for 151 days (i.e. 30+31+31 + 28+31

days). His stay in last 4 years is:

2017-18 - 0

2016-17 - 93

2015-16 - 365

2014-15 - 365

823

Mr. Z is a resident since his stay in the previous year 2018-19 is 151 days and in the last 4

years is more than 365 days.

For the purpose of being ordinarily resident, it is evident from the above calculations, that

(1) His stay in the 7 years is more than 730 days and

(2) Since he was in India for 10 years prior to 02.07.2016, he was a resident in at least 2 out of

the last 10 years preceding the relevant previous year.

Mr. Z is a resident and ordinarily resident for the A.Y. 2019-20. Hence Total amount of ₹

21,000 is taxable in the hand of Mr. Z as Global income is taxable.

2. Option (d)

3. Option (a) Since payment does not exceed ₹ 50,000.

4. Option (a)

5. Option (a)

6. Option (c)

7. Option (c)

Hint

Amount ( ₹ ) Amount ( ₹ )

Full value of consideration as per section 50C

( Stamp dept value on the agreement or fair market

value, whichever is lower )

Less : Indexed cost of Acquisition

(80,00,000*280/200)

Long term Capital Gain

160,00,000

112,00,000

_____________

48,00,000

8. Option (c)

Hint

PARTICULARS AMOUNT AMOUNT

A) House Property:

Income from house property

B) Capital Gain:

LTCG on sale of land

C) Other Sources:

Income from horse racing

Gross total income

Tax on total income:

At normal rates on Rs 3,34,000

Up to Rs. 3,00,000

Next Rs. 34,000 @5%

Tax on LTCG @20% of Rs. 15,000

Tax on House racing income @30% of Rs. 20,000

Add: HEC @4%

20,000

Nil

1,700

3,000

6,000

3,34,000

15,000

20,000

3,69,000

10,700

428

11,128

9. Option (b)

PARTICULARS AMOUNT AMOUNT

Leave salary received

Less: Exemption u/s 10 (10AA):

1) Amount actually received

2) Last 10 months total salary (8,800 x 10 months)

3) L/S entitlement as per IT rules (8,800/30 x 180)(note)

4) Maximum exemption limit

Taxable leave salary:

1,50,000

88,000

52,800

3,00,000

1,50,000

52,800

97,200

Note:

Gross Leave allowed (20years x 30 days) = 600 days

Leave taken = 420 days

Pending Leave 180 days

10. Option (b) [5,00,000-Basic Exemption Limit ₹ 2,50,000] x 15% + HEC @ 4%

=(2,50,000 x 15%) + 4%

= ₹ 39,000

11. Option (d)

Solution: Taxable income, in respect of minor children, in the hands of Mr. A is

Two minor daughters [₹ 2,000 x2] ₹4,000

Less: Exempted u/s 10(32) [₹ 1,500 x 2] ₹.3,000 ₹ 1,000

Minor son ₹ 1,200

Less: Exempted u/s 10(32) ₹1,200 NIL

Income to be clubbed in the hands of Mr. A ₹ 1,000

12. Option (a)

For Use: April 2018 to July 2018- 2,00,000 x 10% x 4/12=₹ 6,667

For Transfer: Original cost less depreciation @10% for 3 years SLM = 1,40,000

Less: Amount paid 12,000

Taxable perk: ₹ 1,28,000

Total Taxable value: ₹ 1,34,667

13. Option (b)

14. Option (c)

15. Option (d) – Registration of a registered person, other than composition tax payer, can be

cancelled if he has not furnished return for six consecutive tax periods.

16. Option (a)

17. Option (b)

Hint:

Answer: ₹

a) Commission received on account of foreign exchange transaction between two banks –

Exempted u/s. 11 vide Notification No.12/2017 NIL

b) Foreign exchange service provided to general public -taxable

Value = US$ 15,00,000 x [₹ 50 – ₹ 49] 15,00,000

c) Discount on commercial paper- Exempted NIL

d) Extra amount received form customer for delayed payment of

credit card expenses – taxable 15,00,000

Taxable value of supply 30,00,000

CGST @9% 2,70,000

SGST @9% 2,70,000

18. Option (b)

19. Option (c)

20. Option (a)

21. Option (d)

Services by way of transportation of goods-

(a) by road except the services of—

(i) a goods transportation agency;

(ii) a courier agency;

(b) by inland waterways.

Are exempt.

Answer to Mock Test 2

1. Option (b)

Hint:

Computation of income from house property ₹

1. Self-occupied House Nil

2. House of which half of the place is let out(Note 1) 31,080

31,080

Note 1:

Particulars ₹

Gross Annual Value [Higher of Municipal value or actual rent] 48,000

Less: Municipal taxes paid (10% of Municipal Value) 3,600

Net Annual Value (NAV) 44,400

Less: deduction u/s 24

(a) 30% of NAV =30% of ₹44,400

13,320

Income from house property 31,080

Income from other half of house used for business is not taxable under House property.

2. Option (c)

Hint:

5 owned light weight vehicles: 5 x 7500 x 12 = ₹ 4,50,000

3 owned heavy Vehicles: 3 x 31 tonnes x 1,000 x 12 months = ₹ 11,16,000

Total Taxable Amount: ₹ 15,66,000

3. Option (c)

Hint:

Income before interest and remuneration: ₹ 10,00,000

Less: Interest allowable up to 12%: ₹ 1,20,000

Book Profit: ₹ 8,80,000

Less Remuneration Allowable(note 1) ₹ 4,00,000

Income of the Firm ₹ 4,80,000

Note 1:

Remuneration allowed shall be lower of the following:

1. Remuneration actually paid ₹ 4,00,000

2. 3,00,000 x 90% + 5,80,000 x 60% ₹ 6,18,000

₹ 4,00,000

4. Option (b)

Full Value of Consideration(amount recorded in the books) ₹ 6,20,000

Less: Cost of acquisition ₹ 3,36,000

Short Term Capital Gains ₹2,84,000

5. Option (b)

FVC ₹ 2 cr – ICOA ₹ 75 lakhs = 125 lakhs. Exemption u/s 54B is not allowed to company assessee.

6. Option (b)

If any gift is received by the HUF from its members (relatives) then it is exempted in the hands

of HUF.[Section 56(2)(x)]. Further, for the purposes of Section 56(2)(x), the term relative for

HUF shall mean any member of such HUF.

Computation of income taxable u/s. 56(2)(x) of M/s. X (HUF)

Particulars ₹

i) Gift of ₹ 5,00,000 received from son and daughter in law – Exempted

(relative)

NIL

ii) Gift of ₹ 2,00,000 received from Married daughter – Exempted (relative).

However, gift from son in law is taxable being not a member of X (HUF).

1,00,000

iii) Gift of ₹ 50,000 received from daughter’s daughter.(granddaughter) –

Taxable – not relatives. However, gift from grandson (son’s son) exempted

being relative.

50,000

Total 1,50,000

7. Option(d) [₹ 52,000 – Exemption u/s 10(15) ₹ 3,500]=₹ 48,500 or ₹ 50,000 whichever is

lower.

8. Option (d) (Since Amount does not exceed ₹ 10,000)

9. Option (a)

(₹ 3,90,000 / ₹6,50,000) x 2,00,000 = ₹ 1,20,000

10. Option (a)

salary income 4,60,000

Int. on FD (18,000/.9) 20,000

Interest on saving A/c 2,000

Gross Total Income 4,82,000

Less: Sec.80C 50,000

Less: Sec. 80TTA 2,000

Total Income 4,30,000

Income Tax 9000

Less: Rebate u/s. 87A Nil

9,000

Add: HEC @ 4% 360

Gross Tax payable 9,360

Less: TDS 2,000

7,360

11. Option a

STCL and business loss(non-speculative) can be set off against LTCG. Total income is

18 lakhs – 15 lakhs – 2 lakhs = 1 lakhs. Further Capital loss of 2007-08 cannot be set off.

12. Option (b)

13. Option (c) Nothing taxable, as the value of supply is below ₹ 1000 per day.

14. Option (a)

15. option (d)

16. Option (b)

Answer: ₹______

(i) Cost of Raw material received from the Manufacturer Nil

(ii) Manufacturer incurred freight charges for supplying above materials Nil

(iii) Job Worker’s Charge including profit 30,000

(iv) Transport charges incurred by Job worker for returning finished goods 20,000

[being incidental activities]

(v) Technology transfer fee in relation job work done 5,000

Transaction value 55,000

Central GST @ 9% 4,950

State GST @ 9% 4,950

Assuming intra state transaction.

Note: Supply made by manufacturer to job worker are not taxable and Input tax credit shall be

allowed to the manufacturer.

17. Option (b) [ E-Way bill is not required]

18. Option (c)

19. Option (b)

CGST SGST

Output tax 4,32,000 4,32,000

Less: Input tax credit CGST- 135,000 SGST – 130000

IGST -1,00,000 -

IGST – 85,500 -

(90,000x 95%) _____________

GST Payable by cash 1,11,500 3,02,000

20. Option (a)

Particulars CGST SGST(₹)

Output tax on ₹10 lakhs

@2.5%

25,000 25,000

Input tax credit

Type A - -

Type B [6% x 2,00,000] (12,000) (12,000)

Type C [2.5% x 1,00,000] (2500) (2500)

Net GST payable 10,500 10,500

Note:

1.Type A inputs are exempted from GST. Thus, no input tax has been paid neither claimed on

the same. However, in case of Zero rated ITC is allowed.

21. Option (c)

ANSWER TO MOCK TEST 3

1. Option (d)

Taxable Value: 80,000 x 11% x 3/12 = ₹ 2,200

2. Option (b)

Solution: Computation of Deduction U/s 80DDB

Amount incurred or Maximum Limit ₹ 1,00,000, whichever is lower: 74,000

Less: Insurance claim received 22,000

Net deduction u/s. 80DDB 52,000

3. Option (d)

4. Option (b)

5. Option (a) (100 % of 5lakhs – 1lakhs)

6. Option (b) [Case of Cross Transfer]

7. Option (c)

Particulars Amount (₹) Amount (₹)

House Rent Allowances Received 36,000

Less: Exemption available U/s 10(13A)

Least of the following :

(i) Amount actually received 36,000

(ii) Rent paid (-) 10% of salary:

(a) Rent paid 2500 x 12 30,000

(b) 10% of Salary (5000 +250) x 12 6,300 23,700

(iii) 50% of salary i.e. ½ x 63,000 31,500 23,700

TAXABLE HRA ➔ 12,300

8. Option (b)

It is a case of transfer of residential building in business.

Purchase of House Property on December 12, 2016 ➔ 10,00,000

Less: Depreciation @ 5% (since used for less than 180 days) 50,000

WDV on 1/4/2017 9,50,000

Less: Depreciation @ 10% 95,000

WDV on 1/4/2018 8,55,000

Less: Depreciation 85,500

WDV on 1/4/2019 7,69,500

Hence depreciation allowable = 85,500

9. Option (d)

Deduction U/s 16(ii) – least of the following :

Entertainment Allowance received: ₹4,800

20% of Basic Salary : ₹2,400

Maximum Deduction Limit : ₹5,000

Deduction U/s 16(ii) : ₹2,400

10. Option (c)

(i) True : STT is not allowable under capital gains but allowable under Business and Profession.

(ii) True : According to the Explanation 5 to section 32(1), allowance of depreciation is

mandatory. Therefore, depreciation has to be provided mandatorily while calculating income

from business / profession whether or not the assessee has claimed the same while computing

his total income.

(iii) FALSE: The deduction for family planning expenditure which is of capital nature is

allowable as 1/5th over 5 years only if the assessee is a company and not to partnership firm.

(iv) False: Amortisation of Amalgamation expenses / Demerger expenses is allowable as 1/5th

over 5 years.

(v) False: It shall be allowed in the year of purchase but treated as deemed income of the year

of payment.

11. Option (d)

For 2018-19: NO clubbing in the hands of Mr. X. only opening capital balance on 1st day of

previous year is relevant. In the given case, as on 1/4/2018 the capital balance comprises only

of that of Mrs. X. Therefore, there would be no clubbing. Income would be taxable in the hands

of Mrs. X.

12. Option (a)

When shares are purchased and sold through recognised stock exchange

Particulars ₹ ₹

Full value of consideration

Less: cost of acquisition higher of

(a) Original cost

(b) FMV on 31/01/2018 Or Full value of consideration

which is lower

Gross LTCG

Less: Exempted u/s 112A

Taxable LTCG

Tax on Total Income @ 10% of ₹ (14,50,000 – 2,50,000)

800000

950000

2500000

950000

1550000

100000

1450000

120000 + 4%

13. Option (b) Where goods are received in lots/instalments against an invoice: the

registered person shall be entitled to take credit upon receipt of the last lot or instalment.

14. Option (c) [Services by way of loading, unloading, packing, storage or warehousing of rice

are exempt.]

15. Option (b) Section 2(52) of the CGST Act, “goods” means every kind of movable property

other than money and securities but includes actionable claim, growing crops, grass and things

attached to or forming part of the land which are agreed to be severed before supply or under

a contract of supply.

16. Option (d)

17. option (b)

18. Option (c)

19. Option (b) In the above case, the invoice was issued within the prescribed time (that is

within 30 days of the event) and hence the time of supply would be the earlier of:

a. The date of invoice: which is 14th January and

b. The date of receipt of payment: which is 31st January

Therefore, for the amount of ₹ 6,50,000 the time of supply would be 14th January, 2018. For

the sum of ₹ 2,50,000, the date of payment precedes the invoice and hence the time of supply

for that amount would be 15th November, 2018.

20. Option (b)

Charges received from a Private hospital for Collection, transportation,

treatment and disposal of Bio-medical waste [ Exempted service]

Nil

Charges received from a Govt. hospital for Collection, transportation,

treatment and disposal of Bio-medical waste [ Exempted Supply]

Nil

Training fee received from a clinical establishment related to segregation of

bio-medical waste [Exempted being an incidental activity for bio-medical

waste treatment]

Nil

Charges received from manufacturer of Medicine treatment and disposal of

Bio-medical waste [Since provided to a medicine company and not provided to

a clinical establishment]

15,00,000

Taxable Value 15,00,000

Central GST @9% 1,35,000

State GST @ 9% 1,35,000

21. Option (a)

Particulars Taxable

Value (₹)

1. Performance of Odishi Dance in stage shows [charges per

performance does not exceed ₹ 1,50,000]. Note 1

NIL

2. Performing in television serial [two performance, charges

₹ 70,000 per performance] Note 1

1,40,000

3. Performance given to promote a product of a reputed

company in various road shows [Note 1]

2,00,000

4. Coaching in recreational activities relating to arts [Note

2]

Nil

5. Activities in sculpture making [Note 1] 2,00,000

Total 5,40,000

GST @ 18% 97,200

Exemption Notification- w.e.f 27.7.2018

Services supplied by an establishment of a person in India to any establishment of that

person outside India, which are treated as establishments of distinct persons in accordance

with Explanation 1 in section 8 of the Integrated Goods and Services Tax Act, 2017, shall be

exempted. Provided the place of supply of the service is outside India in accordance with

section 13 of Integrated Goods and Services Tax Act, 2017.

Correction of Some of the Misprints

➔Question 5 Page 5 of Volume 2 ( edition of May 2019)

Deduction u/s 80TTB to be allowed is ₹ 50,000.

In the question in point iii Long term capital Gains on sale of shares should be 1,00,000 instead of

1,24,000.

➔MCQ 3 of Capital Gains on Page no. 97 of Volume 2 ( edition of May 2019)

In the answer FVC shall be ₹ 75,00,000 instead of ₹ 76,00,000 as Stamp duty value does not exceed

105% of Sales value. Accordingly answer shall be ₹ 45,00,000.

➔ MCQ 7 of Capital Gains on Page no. 97 of Volume 2 ( edition of May 2019)

In this question Exemption u/s 54B is not allowed as not allowed to company assessee. Accordingly

answer shall be ₹ 1crore 25 Lakhs.

➔ MCQ 3 of Tax Computation page 144 of Direct tax Volume 2 (edition of May 2019)

In this question read uncommuted pension received as ₹ 2,80,000 instead of ₹ 4,00,000. Accordingly

Solution shall be as under: ₹ 2,80,000 – Standard deduction ₹ 40,000 = ₹ 2,40,000. Since income does

not exceed basic exemption limit, hence tax payable shall be Nil.

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