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CA Final | CA Inter | CA IPCC | CA Foundation Online Test Series

Question Paper

Taxation Duration: 180

Details: Full Test-2 Marks: 100

Instructions:

 All the questions are compulsory

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sheets inarranged manner.
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SECTION A: INCOME TAX LAW

Working Notes should form part of the answer. Wherever necessary, suitable assumptions
may be made by the candidates and disclosed by way of a note. However, in answers to
Questions in Division A, working notes are not required.

Division A – 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.

1. Case study

Mr. Aditya Sharma furnishes the following details for the year ended 31-03-2025 :

Particulars Rs.

Loss from speculative business A 25,000

Income from speculative business B 5,000

Loss from specified business covered under Section 35AD 20,000

Income from Salary (Computed) 3,00,000

Loss from House Property 2,50,000

Income from trading business 45,000

Long-term Capital Gain from sale of urban land 2,00,000

Long-term Capital Loss on sale of shares (STT not paid) 75,000

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Long-term Capital Loss on sale of listed shares in recognized stock 1,02,000

exchange (STT Paid)

Following are the brought forward losses :

(i) Losses from owning and maintaining of race horses pertaining to A.Y. 2024-25 Rs. 2,000.

(ii) Brought forward loss from trading business Rs. 5,000 relating to A.Y. 2021-22.

Compute the total income of Mr. Aditya sharma and show the items eligible for carry
forward, if he has exercised the option of shifting out of the default tax regime provided u/s
115BAC(1A).

1.What is the total income of Mr. Aditya Sharma for the assessment year 2025-26?

a) ₹1,63,000

b) ₹2,00,000

c) ₹1,50,000

d) ₹1,80,000

2.Which of the following losses can be carried forward indefinitely?

a) Loss from speculative business

b) Loss from specified business covered under Section 35AD

c) Loss from house property

d) Loss from trading business

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3.How much loss from house property can Mr. Aditya Sharma set off against his salary
income?

a) ₹2,00,000

b) ₹50,000

c) ₹1,00,000

d) ₹2,50,000

4.What is the maximum period for which losses from speculation business can be carried
forward?

a) 8 years

b) 4 years

c) Indefinitely

d) 3 years

5.Which of the following losses cannot be set off against income from any other head?

a) Long-term capital loss on shares (STT paid)

b) Loss from house property

c) Loss from speculative business

d) Loss from trading business

6.What is the total amount of losses Mr. Aditya Sharma can carry forward to the assessment
year 2026-27?

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a) ₹70,000

b) ₹92,000

c) ₹50,000

d) ₹20,000

(6 2= 12 Marks)

2. Mr. A is provided with two cars, to be used for official and personal work by his employer
ABC Ltd. The following information is available from the company records –

Car 1 (Rs.) Car 2 (Rs.)

Cost of the Car 6,00,000 4,00,000

Running and maintenance (Borne by the company) 40,800 28,000

Salary of driver (Borne by the company) 24,000 24,000

The taxable monetary emoluments of Mr. A are Rs. 90,000. Compute the taxable ‘Perk’
in respect of Cars on the assumption car 2, is exclusively used by 'A' for personal purpose.

a) 1,31,600

b) 1,31,700

c) 1,32,600

d) 1,26,600

(2 Marks)

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3. Arvind commenced construction of a residential house, intended exclusively for his

residence, on 01-11-2023. He raised a loan of Rs. 10,00,000 at 12% interest for the purpose
of construction on 01-11-2023. Finding that there was an over-run in the cost of
construction, he raised a further loan of Rs. 12,00,000 at the same rate of interest on 1-10-
2024. What is the interest allowable under section 24, assuming that the construction was
completed by 31-3-2025 and if he exercises the option of shifting out of the default tax
regime provided under section 115BAC(1A).

a) Rs.2,02,000

b) Rs.2,02,000

c) Rs.2,02,000

d) Rs.2,02,000

(1 Mark)

Division B - Descriptive Questions

Question No. 1 is compulsory.

Attempt any two questions out of remaining three questions

Q-1

Mrs. Mitual, a resident individual, aged 63 years, is a qualified medical practitioner. She runs
her own clinic. Income & Expenditure A/c of Mrs. Mitual for the year ending March 31st
2025 is as under :

Expenditure Rs. Expenditure Rs.

To Salary to Staff 1,20,000 By Consultation Fees 12,00,000

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To Administrative Exp. 2,90,000 By Salary received from 1,80,000

True Care Hospitals (P) Ltd.

To Conveyance 24,000 By Rental Income from 78,000

House Property

To Power & Fuel 24,000 By Dividend from Foreign 10,000

Companies

To Interest on Housing 1,00,000

Loan

To Interest on Education 26,000

Loan for son

To Amount paid to 25,000

scientific research
association approved &
Notified under section 35

To Net profit 8,59,000

Total 14,68,000 Total 14,68,000

Explanatory Information :

(i) She is working part-time with True Care Hospitals (P) Ltd. Her salary details are as under :

Basic Pay Rs. 13,000 p.m.

Transport Allowance Rs. 2,000 p.m.

Total Rs. 15,000 p.m.

Further, during P.Y. 2024-25, her son had undergone a medical treatment in True Care
Hospitals (P) Ltd. free of cost. The hospital would have charged a sum of Rs. 60,000 for a
similar treatment to unrelated patients.

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(ii) She owns a residential house. Ground floor of the house is self-occupied by her while
first floor has been rented out since 01-10-2024. The reconstruction of the house was
started on 01-04-2024 and was completed on 30-09-2024 The monthly rent is Rs. 10,000.
The tenant also pays Rs. 3,000 p.m. as power back-up charges. She took a housing loan of
Rs. 12 lakhs on 01-04-2024. Interest on housing loan for the period 01-04-2024 to 30-09-
2024 was Rs. 60,000 and for the period 01-10-2024 to 31-03-2025 was Rs. 40,000. During
the year, she also paid municipal taxes for the F.Y. 2024-24 Rs. 5,000 and for F.Y. 2024-25
Rs. 5,000.

(iii) Other information :

(a) Conveyance expenses include a sum of Rs. 12,000 incurred for conveyance from house to
True Care Hospitals (P) Ltd. and vice-versa in relation to her employment.

(b) Power & fuel expenses include a sum of Rs. 6,000 incurred for generator fuel for
providing power back-up to the tenant.

(c) Administrative expenses include a sum of Rs. 10,000 paid as Municipal Taxes for her
house.

(d) Clinic equipments' details are :

Opening W.D.V. Of clinic equipments as on 01-04-2024 was Rs. 1,00,000 and fresh purchase
made on 28-08-2024 is Rs. 25,000 which was paid in cash.

(e) She also paid tuition fee of Rs. 40,000 for her grand-daughter, which has been debited to
her Capital A/c.

(f) She availed a loan of Rs. 8,00,000 from bank for higher education of her son. She repaid
principal of Rs. 50,000 and interest of Rs. 26,000 during P.Y. 2024-25.

You are required to compute her total income and tax liability for A.Y. 2025-26 if she has
exercised the option of shifting out of the default tax regime provided u/s 115BAC(1A).

(15 Marks)

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Q-2
(a)

1. Explain with reasons whether the following transactions attract income-tax in India in the
hands of recipients:

(i) Salary paid to Mr. Dinesh, a citizen of India Rs.20,00,000 by the Central Government for
the services rendered in London.

(ii) Royalty paid to Raja, a non-resident by Ms. Mute, a resident for a business carried on in
Sri Lanka.

2. Ms. Anjali, a non-resident, residing in London since 1995, came back to India on 19-02-
2022 for permanent settlement in India. Explain the residential status of Ms. Anjali for the
Assessment Year 2024-25 in accordance with the various provisions of Income-tax Act,
1961.

(6 Marks)

(b)

Examine the applicability of tax deduction at source provisions, the rate and amount of tax
deduction in the following cases for the financial year 2023-24:

(i) On 1.6.2023, Mr. Gyaneshwar made three nine month fixed deposits of ₹ 1 lakh each
carrying interest@9% with Laxmi Nagar Branch, Mayur Vihar Branch and Rohini Branch of
ABC Bank, a bank which has adopted CBS. The fixed deposits mature on 28.2.2024.

(ii) Sky TV, a television channel, made payment of ₹ 70 lakhs to a production house ABC Ltd.
For production of programme for telecasting as per the specifications given by the channel.
The copyright of the programme is also transferred to Sky T V.

(4 Marks)

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Q-3 (a)

Mr. Tenzingh is engaged in composite business of growing and curing (further processing)
Coffee in Coorg, Karnataka. The whole of coffee grown in his plantation is cured. Relevant
information pertaining to the year ended 31-3-2025 are given below :

Particulars Rs.

WDV of Car as on 01-04-2024 3,00,000

WDV of machinery as on 31-03-2024 (15% rate) 15,00,000

Expenses incurred for growing coffee 3,10,000

Expenditure for curing Coffee 3,00,000

Sale value of cured Coffee 22,00,000

Besides being used for agricultural operations, the car is also used for personal use;
disallowance for personal use may be taken at 20%. The expenses incurred for car running
and maintenance are ` 50,000. The machines were used in coffee curing business
operations. Compute the income arising from the above activities for the A.Y. 2025-26.
Show the WDV of the assets as on 31-03-2025.

(6 Marks)

(b)

(i) Examine the taxability of capital gains in the following scenarios for the Assessment Year
2024-25, determine the taxable amount and rate of tax applicable:

On 20th December, 2023 5,000 shares of AB Ltd., a listed company are sold by Mr. Kumar @
500 per share and STT was paid at the time of sale of shares. These shares were acquired by
him on 5th June, 2017 @ ₹ 425 per share by paying STT at the time of purchase. On 31st

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January, 2018, the shares of AB Ltd. Were traded on a recognized stock exchange at the Fair
Market Value of ₹ 450 per share.

(ii) Mr. Satish is the owner of a residential house which was purchased on 1st July, 2017 for
₹ 10,50,000. He sold the said house on 14th October, 2023 for ₹ 25,00,000. Valuation as per
stamp valuation authorities was ₹ 45,00,000. He invested ₹ 15,00,000 in RECL Bonds on 20th
March, 2024.

The Cost Inflation index for-

F.Y. 2017-18 272

F.Y. 2023-24 348

(4 Marks)

Q-4 (a)

Compute the total income of Mr. Krishna for the assessment year 2025-26 from the
following particulars :

Particulars Amount (`)

Income from business before adjusting the following items : 1,75,000

(a) Business loss brought forward from assessment year 2022-23 70,000

(b) Current depreciation 40,000

(c) Unabsorbed depreciation of earlier year 1,55,000

Income from house property (Gross annual value) 4,32,000

Municipal taxes paid 32,000

Mr. Krishna sold a plot at Noida on 12th Sept., 2024 for a consideration

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of ` 6,40,000, which had been purchased by him on 20th Dec. 2022 at a

cost of ` 4,10,000.

Long-term capital loss on sale of shares sold through recognized stock 75,000
exchange (STT paid)

Long-term capital gain on sale of debentures 60,000

Dividend on shares held as stock in trade 22,000

Dividend from a company carrying on agri business 10,000

During the previous year 2024-25, Mr. Krishna has repaid ` 1,67,000 towards housing loan
from a scheduled bank. Out of ` 1,67,000, ` 97,000 was towards payment of interest and rest
towards principal payments. He has exercised the option of shifting out of the default tax
regime provided under section 115BAC(1A).

Cost inflation indices are as under : F.Y. 2022-23 : 317 and F.Y. 2024-25 : 348.

(6 Marks)

(b)

Mr. Nikash, a registered person under GST, is unable to tile GSTR-1 on the reason being
shown that tax payable under GSTR-1 which has been filed in respect of last tax period
exceeds the tax payable under GSTR- 3B which has been filed for the corresponding tax
period. Explain the procedure to be followed by the department and Mr. Nikash for the
same as per the provisions of Rule 88C of the CGST Rules 2017.

(4 Marks)

Or

(b)

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Mr. Anay manufactures toys in a factory located in Noida. His profit from the manufacture
of toys for Assessment year 2024-25 is ₹ 1.85 crore and total turnover is ₹ 18.70 crore.

On 1st April 2023, there were 100 employees engaged in his factory. Due to increase in
demand of his products, he employed 140 additional employees during the previous year
2023-24 comprises of:

(a) 15 casual employees employed on 15th April 2023 till 31st January 2024 on monthly
emolument of ₹ 22,000 per month

(b) 40 regular employees employed on 1st May, 2023 on monthly emolument of ₹ 22,000
per month

(c) 25 contractual employees employed on 1st July 2023 for 2 years on monthly emolument
of ₹ 15,000 per month

(d) 35 regular employees employed on 1st August, 2023 on monthly emolument of ₹ 30,000
per month

(e) 25 regular employees employed on 1st October, 2023 on monthly emolument of ₹

22,000 per month Compute the deduction under Section 80JJAA, if available to Mr. Anay for
Assessment year 2024-25, assuming that monthly emoluments were paid by use of ECS. The
regular and contractual employees participate in the recognised provident fund while casual
employees do not. Would your answer be different if Mr. Anay is engaged in the
manufacture of apparel? Examine.

[Note - Ignore the amount of deduction available under section 80JJAA to Mr. Anay, for the
employees employed in preceding previous years, while computing the deduction under
80JJAA for the assessment year 2024-25]

SECTION B – GOODS AND SERVICES TAX (50 MARKS)

QUESTIONS

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(i) Working Notes should form part of the answers. However, in answers to Questions in
Division A, working notes are not required.

(ii) Wherever necessary, suitable assumptions may be made by the candidates, and
disclosed by way of notes.

(iii) All questions should be answered on the basis of position of the GST law as amended
by provisions of the CGST Act, 2017 and the IGST Act, 2017 as amended by the Finance Act,
2023, including significant notifications and circulars issued, up to 31st October, 2023.

Division A - Multiple Choice Questions (MCQs)

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.

Case study 2

Ms. Chanchala, is a doctor, registered person under GST as a monthly return filer, having in-
patient facility in her hospital. She availed interior decoration services from her spouse
without any consideration being paid. She also availed IT related services from her sister-in-
law without any consideration. Both services were for the purpose of her profession.

Ms. Chanchala provided treatment of various diseases in her hospital and apart from that
she also provided the following services in her hospital-

(a) Plastic surgery to enhance the beauty of the face

(b) Ambulance service for transportation of patients

(c) Renting of space to run medical store in hospital premises

She is also a consultant in other hospitals and received Rs. 40,00,000 as consultancy fee
from the other hospitals.

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Further, she also provides canteen facility and received Rs. 55,000 from in-patients, Rs.
35,000 from patients who are not admitted and Rs. 25,000 from visitors for the same
facility.

She filed GSTR-3B for the month of June with some errors. She filed the Annual return for
the said financial year on 15th December of the next financial year, whereas due date for
the said Annual return is 31st December of the next financial year.

Proper Officer of the department had cancelled the registration certificate of Ms. Chanchala
suo-motu on 31st July. Order of cancellation was served on 5th August. However, she
applied for revocation of the same and got her registration restored back.

All the amounts given above are exclusive of taxes, wherever applicable. All the supplies
referred above are intra-State unless specified otherwise

From the information given above, choose the most appropriate answer for the following
questions-

1.1 Which of the following is a correct statement as per the provisions of CGST Act, 2017?

(i) Service availed from her Spouse is a deemed supply

(ii) Service availed from her Sister-in-Law is a deemed supply

(iii) Service availed from her Spouse is not a deemed supply

(iv) Service availed from her Sister-in-Law is not a deemed supply

a) (i) and (iv)

b) (iii) and (iv)

c) (ii) and (iii)

d) (i) and (ii)

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1.2 Compute the taxable value of supply of canteen service provided by Ms. Chanchala?

a) Rs. 25,000

b) Rs. 35,000

c) Rs. 60,000

d) Rs. 80,000

1.3 By which date Ms. Chanchala should have applied for revocation of cancellation of
registration certificate, in case no extension is granted?

a) 5th August

b) 20th August

c) 4th September

d) 3rd November

1.4 Maximum time permissible for rectification of error committed in monthly return of
June is ________

a) 30th November of the next year

b) 20th October of the next year

c) 15th December of the next year

d) 31st December of the next year

1.5 Determine which of the following services provided by Ms. Chanchala and her hospital is
exempt from GST?

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(i) Plastic surgery to enhance the beauty of the face

(ii) Ambulance service for transportation of patients

(iii) Renting of space to run medical store in hospital premises

(iv) Consultancy service by Ms. Chanchala in other hospitals

a) (i),(ii)

b) (iii),(iv)

c) (ii),(v)

d) (i),(v)

1.6 What is the GST implication for the canteen services provided by Ms. Chanchala in her
hospital?

a) Canteen services provided to in-patients are exempt, while services to others (out-
patients and visitors) are taxable.
b) All canteen services are taxable under GST.
c) Canteen services provided to in-patients, out-patients, and visitors are exempt from GST.
d) Canteen services to in-patients are taxable, while services to out-patients and visitors are
exempt.

(6 2=12 Marks)

2. M/s. Sakura Enterprises required to generate an e-way bill for the inter-State supply of
goods valued at ₹47,500 (taxable) and ₹2,000 (exempt)?

a) No, because the value of the exempt goods is included in the consignment value.

b) Yes, because the consignment value, including IGST, exceeds ₹50,000.

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c) No, because exempt goods are part of the supply, and the taxable value alone is below
₹50,000.

d) Yes, because all inter-State supplies require e-way bills regardless of the value. give
correct answer and reason

(2 Marks)

3. Kidzee Ltd., a wholesaler of toys registered in Chandigarh, is renowned in the local market
for the varieties of toys and their reasonable prices. Kidzee Ltd. makes supply of 100 pieces
of baby’s learning laptops and chat learning phones to Nancy General Store on 25th
September, 20XX by issuing a tax invoice amounting to ₹ 1,00,000. However, the said toys
were returned by Nancy General Store on 30th September, 20XX.

Which document Kidzee Ltd. is required to issue in such a case?

a) Debit Note

b) Refund voucher

c) Credit note

d) Payment voucher

(1 Mark)

Division B - Descriptive Questions

Question No. 5 is compulsory.

Attempt any two questions out of remaining three questions

Total Marks:35 Marks

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5 (a)

Mr. Shivkumar , a supplier registered in Delhi, is engaged in the business of sale and
purchase of plastic raincoats. He furnishes the following information pertaining to
inward/outward supply made by him for the month of July, 20XX:

Particulars Amount (Rs. in

lakh)

Value of inter-State outward supply to registered persons 30,00,000

Value of intra-State outward supply to registered persons 50,00,000

Value of intra-State outward supply to unregistered persons 15,00,000

Value of intra-State inward supply from registered persons 10,00,000

Value of inter-State inward supply from registered persons 5,00,000

Value of intra-State inward supply from unregistered persons 2,00,000

Following additional information is also provided by Mr. Shivkumar:-

Particulars Amount (Rs. in

lakh)

IGST credit on capital goods purchased in the month of July 1,50,000

CGST/ SGST credit on other inward supplies [including c redit of Rs. 50,000
5,000 (CGST and SGST each) on account of membership of a club]

Availed consultancy services from Mr. Sujit, lawyer located in Delhi 1,00,000
[Intra-State services]

The amount of ITC brought forward in the month of July, 20XX is as under:-

CGST: Rs. 2 lakh

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SGST: Rs. 2 lakh IGST: Rs. 5 lakh

Calculate the net GST liability (CGST and SGST or IGST, as the case may be) to be paid in cash
for the month of July, 20XX by assuming the rates of GST as under:

CGST 9%

SGST 9%

IGST 18%

Note:

(i) All the amounts given above are exclusive of taxes.

(ii) All the conditions necessary for availing the ITC have been fulfilled.

(10 Marks)

(b)

Examine the following independent cases and determine the place of supply :

(1) Mr. Joy, an unregistered person of Kolkata, West Bengal sends a courier through Kolkata,
West Bengal based Mohan Courier Agency to his sister in Mumbai, Maharashtra.

(2) Mr. Nitin, an unregistered person resides at Rewa, Madhya Pradesh books a two way air
journey ticket from Prayagraj, Uttar Pradesh to Jaipur, Rajasthan on 6th September and
back. He leaves Prayagraj on 11th September in a morning flight and land in Jaipur the same
day. He leaves Jaipur on 15th September in a late night flight and lands in Prayagraj the next
day.

(3) Rimjhim Pvt. Ltd., located at Lucknow, Uttar Pradesh, purchases a manufacturing
machine from Manav Steel Industries Ltd., located at Jaipur, Rajasthan, for being installed in
its factory located at Haridwar, Uttarakhand.

(4 Maks)

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Q-6 (a)

Explain the meaning of supply as per provisions of Section 7(1) of Central Goods and Service
Tax Act, 2017.

(4 Marks)

(b)

List any three situations that warrant issue of credit note. Briefly explain the time line to
declare such credit note in the GST return.

(6 Marks)

Q-7 (a)

Briefly enumerate the contraventions which make a registered person liable to cancellation
of registration, as prescribed under rule 21 of the CGST Rules, 2017.

(5 Marks)

(b)

Discuss the provisions relating to time of supply of goods that are taxable under reverse charge?

(5 Marks)

Q-8 (a)

Orip Electricals Ltd., a registered supplier of air-conditioners, is required to send from

Mumbai (Maharashtra), a consignment of parts of air-conditioner to be replaced under
warranty at various client locations in Gujarat. The value of consignment declared in
delivery challan accompanying the goods is Rs. 60,000. Orip Electricals Ltd. claims that since

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movement of goods to Gujarat is caused due to reasons other than supply, e-way bill is not
mandatorily required to be generated in this case.

You are required to examine the technical veracity of the claim made by Orip Electricals Ltd.

(5 Marks)

(b)

Raghav Ltd., have filed their GSTR-3B for the month of July, 2023 within the due date
prescribed under Section 39 i.e. 20.08.2023. Post filing of the return, the registered person
has noticed during September 2023 that tax dues for the month of July, 2023 have been
short paid for ₹ 40,000. Raghav Ltd., has paid the above shortfall of ₹ 40,000, through GSTR-
3B of September 2023, filed on 20.10.2023 [payment through Cash ledger - ₹ 30,000 and
Credit ledger ₹ 10,000]. Examine the Interest payable under the CGST Act, 2017. What
would be your Answer if, GSTR-3B for the month of July 2023 has been filed belatedly on
20.10.2023 and the self-assessed tax of ₹ 40,000/- has been paid on 20.10.2023 [payment
through electronic cash ledger - ₹ 30,000 and electronic credit ledger ₹ 10,000]

Notes:

 There exists adequate balance in Electronic Cash & Credit ledger as on 31.07.2023 for the
above short fall
 No other supply has been made nor tax payable for the month of July, 2023 other than ₹
40,000/- missed out to be paid on forward charge basis
 Ignore the effect of leap year, if applicable in this case.

(5 Marks)

Or

(b)

From the following information of independent cases, your expert advice, with appropriate
reasoning, is sought on the applicability of TDS/TCS provisions of the CGST Act, 2017. You
shall also quantify the amount of TDS/TCS, as the case be, if the same is applicable.

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(i) Top Fashions, a designer cloth dealer and registered in the State of West Bengal, effected
supply through 'QUICK DEAL', an electronic commerce operator. Net value of taxable intra-
State supplies effected for the month of October 2019 was Rs.1,50,000.

(ii) M/s Super Builders, a registered supplier in Tamil Nadu, was awarded a works contract
by Government of Tamil Nadu amounting to Rs.4,30,000. Of this, value of exempt supply
was Rs.1,00,000.

(iii) Tasty Caterers, a· registered supplier of Kerala, provided catering services in Kochi,
Kerala to Government of Andhra Pradesh for its annual training camp held for its staff. Value
of said services was Rs.4,50,000.

(5 Marks)

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