www.escholars.

in

CA Intermediate
Taxation
Mock Test Paper – 1
Time Allowed: 3 Hours Maximum Marks: 100

Section-A Income Tax

Part A MCQ
Q. No. Questions Marks
1 Mr. Shashikant, aged 35 years, is an Indian citizen and a member of the crew of a Singapore
bound Indian ship engaged in carriage of passengers in international traffic departing from
Chennai port on 29th May, 2020.

Particulars Date
Date entered into the Continuous Discharge Certificate in respect of 29th May, 2020
joining the ship by Mr. Shashikant
Date entered into the Continuous Discharge Certificate in respect of 19th December, 2020
signing off the ship by Mr. Shashikant
He stayed in India in the last 4 previous years preceding the P.Y. 2020- 21 for 400 days and for a
period of 750 days in the last 7 previous years preceding to P.Y. 2020-21. He received salary of
₹7,20,000 in his NRE account maintained with State Bank of India, Chennai Branch.
He also furnished details of other income earned during the previous year 2020-21:

S.no Particulars Amount (₹)

1. Dividend declared and received in the month of April, 2020 from X 90,000
limited, an Indian company
2. Agriculture income from land in Pakistan received in India 2,50,000
3. Rental income from house property in Chennai 3,60,000
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
i) What is Mr. Shashikant’s residential status for the P.Y 2020-21? 1
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Non-resident
d) Deemed resident but not ordinarily resident
ii) What would be the total income of Mr. Shashikant for A.Y. 2021-22 assume that he does not 1
opt to pay tax under section 115BAC?
a) ₹ 6,70,000
b) ₹12,72,000
c) ₹ 6,02,000
d) ₹ 5,92,000

888 888 0402 support@escholars.in

14
1
 www.escholars.in
iii) Assume for the purpose of answering this question that Mr. Shashikant has transferred 1
his house property in Chennai to his minor son on 1st April, 2020 and his wife is a housewife
and does not have any income. In such case, his total income would be -
a) ₹ 6,00,500
b) ₹ 5,90,500
c) ₹ 6,02,000
d) ₹ 6,70,000
iv) Mr. Shashikant would like to minimize his tax liability and consulted you to compute the 1
amount of same for the P.Y. 2020-21. Accordingly, his tax liability would be –
a) ₹ 13,610
b) ₹23,610
c) ₹ 22,570
d) ₹ 12,570
2 Mr Raj (a non-resident and aged 65 years) is a retired person, earning rental income of ₹ 40,000 2
per month from a property located in Delhi. He is residing in Canada. Apart from rental income, he
does not have any other source of income. Is he liable to pay advance tax in India?
a) Yes, he is liable to pay advance tax in India as he is a nonresident and his tax liability in
India exceeds ₹ 10,000.
b) No, he is not liable to pay advance tax in India as his tax liability in India is less than ₹
10,000.
c) No, he is not liable to pay advance tax in India as he has no income chargeable under the
head "Profits and gains of business or profession".
d) Both (b) and (c)
3 ABC & Co., a partnership firm, owns a house property which is utilized by the partners for their 2
residence. On 31.10.2020, the firm sells the property at a long-term capital gain of ₹6,50,000. Can
the firm or partners claim an exemption under section 54?
a) Yes, the firm can claim exemption u/s 54 as the firm has earned long term capital gains
from the transfer of a residential house.
b) Yes, the partners can claim exemption u/s 54 as the property was used by them for
residential purpose and the said property has been indirectly transferred by the partners
only in the capacity of a firm.
c) Neither the firm nor the partners can claim deduction u/s 54 as the said deduction is
allowed only in case of a commercial property.
d) The firm cannot claim deduction u/s 54 as a deduction under the said section is allowed
only to an individual or HUF. Further, the partners cannot claim deduction u/s 54 as the
transferor in the instant case is the firm.
4 During the A.Y. 2020-21, Mr Ram has a loss of ₹8 lakhs under the head "Income from house 2
property" which could not be set off from any other head of income as per the provisions of section
71. The due date for filing return of income u/s 139(1) in case of Mr Ram has already expired, and
Mr Ram forgot to file his return of income within the said due date. However, Mr Ram filed his
belated return of income for A.Y. 2020-21. Now, while filing the return of income for A.Y. 2021-22,
Mr Ram wishes to set off the said loss during P.Y. 2020-21. Determine whether Mr Ram can claim
the said set off?
a) No, Mr Ram cannot claim set-off of loss of ₹8 lakhs during A.Y. 2021-22 as he failed to file
his return of income u/s 139(1) for A.Y. 2020-21.
b) Yes, Mr Ram can claim set-off of loss of ₹2 lakhs, out of ₹8 lakhs, from its income from
house property during A.Y. 2021-22, if any, and the balance has to be carried forward to
A.Y.2022-23.
c) Yes, Mr Ram can claim set-off of loss of ₹2 lakhs, out of ₹8 lakhs, from its income from any
head during A.Y. 2021-22 and the balance, if any, has to be carried forward to A.Y.2022-23.
d) Yes, Mr Ram can claim set-off of loss of ₹8 lakhs during A.Y. 2021-22 from its income from
house property, if any, and the balance has to be carried forward to A.Y.2022-23.

888 888 0402 support@escholars.in

14
2
 www.escholars.in
5 During the P.Y.2020-21, Mr Shyam has short-term capital gains of ₹ 95 lakhs taxable under section 1
111A, long-term capital gains of ₹ 110 lakhs taxable under section 112A and business income of ₹
90 lakhs. Which of the following statements is correct?
a) Surcharge@25% is leviable on income-tax computed on total income of ₹ 2.95 crore since
total income exceeds ₹ 2 crores.
b) Surcharge@15% is leviable on income-tax computed on total income of ₹ 2.95 crores.
c) Surcharge@15% is leviable in respect of income-tax computed on capital gains of ₹ 2.05
crore; in respect of business income, the surcharge is leviable@25% on income- tax, since
total income exceeds ₹ 2 crores.
d) Surcharge@15% is leviable in respect of income-tax computed on capital gains of ₹ 2.05
crore; surcharge@10% is leviable on income-tax computed on business income since the
same exceeds ₹ 50 lakhs but is less than ₹ 1 crores.
6 Mr Singh, a U.S. citizen, came to India for an assignment from 11.01.2017 to 09.10.2017 and went 1
back to his home country on completion of the same. He thereafter visited India on 05.07.2019
again for an assignment, which ended on 26.05.2020. What is the latest date by which Mr Singh
should depart from India after completing the assignment so as to qualify as nonresident for P.Y.
2020-21? (Assume that he shall not be visiting India again during the year)
a) 29-05-2020
b) 30-05-2020
c) 31-05-2020
d) 28-09-2020
7 Unexhausted basic exemption limit, if any, of a nonresident for A.Y. 2021-22 can be adjusted 1
against –
a) Only LTCG taxable @20%
b) Only STCG taxable @15%
c) Both (a) and (b)
d) Neither (a) nor (b)
8 Poonam took possession of the property on 31st August 2020 booked by her three years back at 1
₹25 lakhs, The Stamp Duty Value (SDV) of the property as on 31st August 2020 was ₹31 lakh and
on date of booking it was ₹29 lakh. She had paid ₹2 lakh by A/c payee cheque as a down payment
on the date of booking. Which of the following will be considered as income, if any, and in which
previous year?
a) ₹4 lakhs in P.Y. 2020-21
b) ₹4 lakhs in P.Y. 2017-18
c) ₹6 lakhs in P.Y. 2020-21
d) No income shall be taxable since down payment was paid by A/c cheque while booking the
property
9 Mr Raj owns 7 goods vehicle and declares profit on presumptive basis under section 44AE for 1
A.Y.2021-22. He is –
a) Liable to pay advance tax in four instalments in June, September, December and March
b) Liable to pay advance tax in three instalments in September, December and March
c) Liable to pay advance tax in one instalment in March
d) Not liable to pay advance tax since he is declaring profit on a presumptive basis.
10 Which of the following benefits are not allowable to Ms Sakshi, a nonresident, while computing her 1
total income and tax liability for A.Y. 2021-22 under the Income-tax Act, 1961?
a) Deduction of 30% of gross annual value while computing her income from house property
in Bangalore
b) Tax rebate of ₹9,500 from tax payable on her total income of ₹4,40,000
c) Deduction for donation made by her to Prime Minister's National Relief Fund
d) Deduction for interest earned by her .n NRO savings account.

888 888 0402 support@escholars.in

14
3
 www.escholars.in
11 Mr Bharat acquires 1000 equity shares on 01.01.2018 at ₹200 per share. The Fair Market Value of 2
the said shares on 31.01.2019 is ₹500 per share. Mr Bharat sells the said shares on 30.04.2020 at
₹400 per share. Calculate the amount of capital gain in the hands of Mr Bharat, assuming that
securities transaction tax has been paid by Mr Bharat on acquisition and transfer of the said equity
shares.
a) Nil
b) (-) ₹ 1,00,000
c) ₹ 2,00,000
d) ₹ 3,00,000
Part B Descriptive Questions
Question No. 1 is compulsory to attempt 2 from the remaining 3
Q.1 Miss. C, an American National, got married to Mr R of India in the USA on 2-03-2020 and came to 14
India for the first time on 16-03-2020. She remained in India up till 19-09-2020 and left for the
USA on 20-9-2020. She returned to India again on 27-03-2021. While in India, she had purchased a
showroom in Mumbai on 22-04-2020, which was leased out to a company on rent of ₹ 25,000 p.m.
from 1-05-2020. She had taken a loan from a bank for the purchase of this showroom on which
bank had charged interest of ₹ 97,500 up to 31-03-2021. She had received the following gifts from
her relatives and friends during 1-04-2020 to 31-03-2021.

Particulars Amount (₹)

From the parents of the husband 51,000
From the married sister of the husband 11,000
From two very close friends of her husband, ₹ 1,51,000 and ₹21,000 1,72,000

Determine her residential status and compute the total income chargeable to tax along with the
amount of tax payable on such income for the Assessment Year 2021-22.
2a) Mr Ram owns a commercial building whose construction got completed in June 2019. He took a 4
loan of ₹ 15 lakhs from his friend on 01-08-2018 and had been paying interest calculated at 15%
per annum. He is eligible for pre-construction interest as deduction as per the provision of Income
Tax Act.
Mr Ram has let out the commercial building at a monthly rent of ₹ 60,000 during the financial year
2020-21. He paid municipal tax of ₹ 25,000 each for the financial year 2019-20 and 2020-21 on 1-
05-2020 and 5-4-2021 retrospectively. Compute the income from house property.
2b) Mr Arjun bought a vacant land for ₹ 90 lakhs in May 2005. Registration and other expenses were 10
10% of the cost of land. He constructed a residential building on the said for ₹ 110 lakhs during the
financial year 2007-08.
He entered into an agreement for the sale of the above said residential house with Mr Bhim (not a
relative) in April 2017. The sale consideration was fixed at ₹ 800 lakhs and on 23rd April 2017; Mr
Bhim received ₹ 20 lakhs as an advance in cash by executing an agreement.
The sale deed was executed and registered on 14th January 2021 for the agreed consideration.
However, the state stamp duty valuation authority had revised the values, hence the value of the
property for stamp duty purpose was ₹ 880 lakhs. Mr Arjun paid 1% as brokerage on sale
consideration received. Subsequent to the sale, Mr Arjun made the following investments:
 Acquired a residential house at Haryana for ₹ 110 lakhs.
 Acquired a residential house at London for ₹ 190 lakhs.
 Subscribed to India Railways Finance Corporation Ltd. Capital gain bond (approved under
section 54EC) for ₹ 45 lakhs on 29th March 2021 and for ₹ 50 lakhs on 12th May 2021.

Compute the income chargeable under the head 'Capital Gains'. The choice of exemption must be in
the manner most beneficial to the assessee. CII for previous year: 2005-06 – 117; 2007-08 – 129;
2020-21 – 301

888 888 0402 support@escholars.in

14
4
 www.escholars.in
3a) Following incomes are derived by Mr Sudama during the year ended 31-3-2019: Pension received 6
from the U.S. Government ₹6,40,000
Agricultural income from lands in Malaysia ₹3,70,000
Rent received from let out property in Colombo, Sri Lanka ₹4,40,000
Discuss the taxability of the above items where the assessee is (i) Resident, (ii) Non- resident.
Q.3 Mrs Ritu, a resident of India, owns a house property in Haryana. The Municipal value of the 7
b) property is ₹ 7,50,000, Fair Rent of the property is ₹ 6,30,000, and Standard Rent is ₹ 7,20,000 per
annum.
The property was let out for ₹ 75,000 per month for the period April 2020 to December 2020.
Thereafter, the tenant vacated the property, and Mrs Ritu used the house for self-occupation. Rent
for the months of November and December 2020 could not be realized from the tenant. The
tenancy was bonafide, but the defaulting tenant was in occupation of another property of the
assessee, paying rent regularly.
She paid municipal taxes @ 12% during the year and paid interest of ₹ 35,000 during the year for
the amount borrowed towards repairs of the house property.
You are required to compute her income from "House Property" for the A.Y. 2021-22.
Q.3 c) Rahul & Co., a partnership firm, is having a car dealership show-room. They have purchased cars 2
for ₹ 2 crores from Arya Ltd., car manufacturers, the cost of each car being more than ₹ 12 lakhs.
They sell the cars to individual buyers at a price yielding 10% margin on cost. State whether there
will be any obligation to collect tax in the above two situations.
Q.4 a) Mrs and Mr Amit have two minor children A and B. The following are the receipts in the hands of A 5
and B during the year ended 31-3-2021:
i. A received a gift of ₹ 85,000 from her friend's father on the occasion of her birthday.
ii. A won prize money of ₹ 2,51,000 in National Quiz competition.
This was invested in debentures of a company, from which interest of ₹ 20,000 (gross)
accrued during the year.
iii. B won the prize in a lottery. The net amount received after deduction of tax at source was ₹
1,40,000.
Mr Amit's income before considering clubbing provisions is higher than that of his wife. Discuss
how these items will be considered for taxation under the provisions of the Income-tax Act, 1961.
Detailed computation of income is not required.
Q.4 Mr Ram, aged 32 years, furnishes the following details of his total income for the A.Y. 2021-22: 5
b) Income from Salaries 27,44,000
Income from House Property (Computed) 16,60,000
Interest Income from FDR's 7,44,000
He has not claimed any deduction under Chapter VI-A. You are required to compute tax liability of
Mr Ram as per the provisions of Income-tax Act, 1961.
Q.4 c) Mr Mohit Gupta has derived the following income/loss, as computed below, for the previous year 4
2020-21:
Loss from let out house property 2,50,000
Loss from non-speculation business 3,40,000
Income from speculation business 10,45,000
Loss from specified business covered u/s 35AD 5,10,000
Winnings from lotteries (Gross) 3,00,000
Winnings from bettings 1,80,000
Loss from card games 3,40,000
You are required to compute the total income of the assessee for the assessment year 2021-22,
showing clearly the manner of set-off and the items eligible for carrying forward. The return of
income has been filed on 30-7-2022.

888 888 0402 support@escholars.in

14
5
 www.escholars.in
Section B Indirect Tax
Part-A MCQ

1 Mr. Pasupathi, registered taxpayer under GST, is engaged in trading of various types of consumer
goods. His turnover in the preceding financial year was below the threshold limit liable for
registration.
He has issued various bill of exchange, unsecured debentures, and promissory notes in course of
his business activity. Further, he is also engaged in betting activities.
During the month of April in the current year, he availed the following services-
a) GTA services from XYZ Transports (GST was charged @ 5%) –₹ 35,000
b) Renting of Godown premises from Local Municipality– ₹40,000
c) Legal service availed from a Firm of Advocates – ₹50,000
He sold a car used for his personal purposes for ₹1,00,000. He disposed off his old computers for
₹ 60,000 on which no ITC was claimed. He also gave away his stock of old consumer goods
amounting to ₹75,000 (on which he had claimed ITC) to an Orphanage Home.
He received goods on 1st May that are liable to tax under reverse charge. Invoice was issued on
5th May and payment for the same was made on 6th June.
He paid repair expenses for truck used for transportation of goods of his business. GST
component involved thereon was ₹13,000. He arranged for catering on Labour Day function and
paid bill in which GST component was ₹15,000. He received first lot of certain goods having GST
component of ₹ 25,000.
All the amounts given above are exclusive of taxes, wherever applicable. All the supply referred
above is intra-State unless specified otherwise. Conditions necessary for claiming ITC have been
fulfilled subject to the information given above.
Based on the information given above, choose the most appropriate answer for the following
questions:
i) Which of the following is not considered as a supply as per the provisions of CGST Act, 2017? 1
i) Bill of Exchange
ii) Unsecured debentures
iii) Betting
iv) Promissory Note
a) i, ii
b) i, ii and iii
c) ii, iii and iv
d) i, ii and iv
ii) Determine the value of services taxable under reverse charge mechanism? 1
a) ₹ 35,000
b) ₹ 75,000
c) ₹ 85,000
d) ₹ 1,25,000
iii) In respect of sale of personal car and disposal of computer and stock of goods, value of supply 1
will be ___________
a) ₹ 60,000
b) ₹ 75,000
c) ₹ 1,35,000
d) ₹ 2,35,000

888 888 0402 support@escholars.in

14
6
 www.escholars.in
iv) Time of Supply of goods received by Mr. Pasupathi is _____________ 1
a) 1st May
b) 5th May
c) 5th June
d) 6th june
v) Compute the amount of input tax credit (except ITC on services taxable under reverse charge 1
mechanism) that can be claimed by Mr. Pasupathi?
a) ₹ 28,000
b) ₹38,000
c) ₹ 40,000
d) ₹ 13,000
2 A supplier takes deduction of depreciation on the GST component of the cost of capital goods as 1
per the Income-tax Act, 1961. The supplier can-
a) Avail only 50% of the said tax component as ITC
b) Not avail ITC on the said tax component
c) Avail 100% ITC of the said tax component
d) Avail only 25% of the said tax component as ITC
3 An exempt supply includes- 1
a) Supply of goods or services or both which attracts Nil rate of tax
b) Non-taxable supply
c) Supply of goods or services or both which are wholly exempt from tax under section 11 of
the CGST Act or under section 6 of IGST Act
d) All of the above
4 Balance in electronic credit ledger can be utilized against which liability? 1
a) Output tax payable
b) Interest
c) Penalty
d) All of the above
5 Where the goods being sent or taken on approval for sale or return are removed before the supply 1
takes place, the invoice shall be issued:
a) Before/at the time of supply.
b) 6 months from the date of removal.
c) Earlier of (a) or (b).
d) Later of (a) or (b).
6 'P' Ltd. has its registered office, under the Companies Act, 2013, in the State of Maharashtra from 1
where it ordinarily carries on its business of taxable goods. It also has a warehouse in the State of
Telangana for storing said goods. What will be the place of business of 'P' Ltd. under the GST law?
a) Telangana
b) Maharashtra
c) Both (a) and (b)
d) None of the above
7 In the case of Goods Transport Agency (GTA) services, tax is to be paid under forward charge if: 1
a) GST is payable @ 12%
b) GST is payable @ 5% and a factory registered under the Factories Act, 1948 is the
recipient of GTA service.
c) GST is payable @ 5%, and an unregistered individual end customer is the recipient of GTA
service.
d) None of the above

888 888 0402 support@escholars.in

14
7
 www.escholars.in
8 How is the aggregate turnover calculated for computing threshold limit of registration? 1
i) The aggregate value of all taxable supplies (excluding the value of inward supplies on
which tax is payable by a person on reverse charge basis), exempt supplies, the export of
goods/services and interstate supplies of a person having the same PAN computed on all
India basis.
ii) The aggregate value of all taxable supplies (excluding the value of inward supplies on
which tax is payable by a person on reverse charge basis), exempt supplies, the export of
goods/services and interstate supplies of a person computed for each state separately.
iii) The aggregate value of all taxable intrastate supplies, the export of goods/services and
exempt supplies of a person having the same PAN computed for each state separately.
iv) The aggregate value of all taxable supplies(excluding the value of inward supplies on
which tax is payable by a person on reverse charge basis), exempt supplies, the export of
goods/services and interstate supplies of a person having the same PAN computed on all
India basis and excluding taxes if any charged under CGST Act, SGST Act and IGST Act.
a) (i)
b) (ii)
c) (iii)
d) (iv)
Part B Descriptive Questions
1 Question 1 is compulsory attempt any 2 from the remaining 3 10
ABC Ltd. registered under GST furnish the following details with respect to the activities
undertaken by them in the month of March, 2020:
i) Receipt from supply of farm labour ₹85,000
ii) Charge for seed testing ₹65,000
iii) Charges for soil testing of farm land ₹ 35,000
iv) Charges for warehousing of potato chips ₹85,000
v) Commission received on sale of wheat ₹ 75,000
vi) Charges for training of farmers on use of new pesticides and fertilizers developed through
scientific research ₹ 10,000
vii) Renting of vacant land to a stud farm ₹ 1,85,000
viii) Leasing of vacant land to a cattle farm ₹ 83,500
ix) Charging of warehousing of rice ₹1,50,000
x) Charging of warehousing of cotton fabrics ₹ 2,00,000
xi) Retail packing and labeling of fruits and vegetables ₹5,00,000
xii) Charges for warehousing of minor forest produce ₹ 8,00,000
xiii)Charges for warehousing of spices ₹ 2,20,000
Compute the value of taxable supply of ABC Ltd. for the month of March, 2021 if all the above
amounts are exclusive of GST.

888 888 0402 support@escholars.in

14
8
 www.escholars.in
2 Heal care Nursing Home has received the following amounts in the month of November in lieu of 8
various services rendered by it in the same month. You are required to determine its GST liability
for November from the details furnished below:

Particulars Amount (₹)

Palliative care for terminally ill patient's home (Palliative care is given to 30,00,000
improve the quality of life patients who have a serious or life-threatening
disease, but the goal of such care is not to cure the disease)
Service provided by cord blood bank unit of the nursing home by way of 24,00,000
preservation of stem cells
Hair transplant services 100,00,000
Ambulance service to transport the critically ill patient from various locations 12,00,000
to nursing home
Naturopathy treatments. Such treatment is a recognized system of medicine 80,00,000
in terms of section 2(h) of the Clinical Establishment Act, 2010
Plastic surgery to restore anatomy of a child affected due to an accident 30,00,000
Pranic healing treatments. Such treatment is not recognized system of 120,00,000
medicine in terms of section 2(h) of the Clinical Establishment Act, 2010
Mortuary service 10,00,000

Note: All the amounts given above are exclusive of GST. Rate of GST – 18%
3a) Mr Kuldeep a retailer who keeps no inventories, presents the following estimated information for 4
the year –
Purchase of goods: ₹ 50 lakhs (GST @ 5%)
Sales (at fixed selling price inclusive of all taxes): ₹ 60 lakhs (GST on sales @ 5%)
Discuss whether he should opt for composition scheme if composite tax is 1% of turnover.
Expenses of keeping of detailed statutory records required under GST laws will be ₹ 1,20,000 p.a.,
which shall get reduced to₹ 50,000 if composition scheme is opted for. Other expenses are ₹
3,00,000 p.a.
3b) S & Co. is engaged in supplying management consultancy service in Rajasthan. In the preceding 4
financial year, it has a turnover if ₹45 lakhs from the management consultancy service. Further, it
has also earned a bank interest of ₹ 10 lakhs from the fixed deposit. S & Co. wishes is opt for
presumptive levy under notification under 2/2019-CT(R) in the current year. You are required to
advise S & Co. on the same.
4a) Define the following term under the CGST Act, 2017. 2
1. Nonresident taxable person
2. Outward supply
4b) What are the precautions that a taxpayer is required to take for a hassle free compliance under 6
GST?

888 888 0402 support@escholars.in

14
9