CS – EXECUTIVE
MOCK TEST PAPER – 4
TAX LAWS & PRACTICE
(This question paper for practice and self Study only based on ICSI New Pattern)
Time Allowed : 3 Hours
Max Marks : 100
PART – A
1. Where an individual transfers the house property to his wife without adequate consideration, then
income from such house property shall be subject to the provisions of:
a) Section 64(1)(iv)
(B) Section 27
(C) Section 64(1)(ii)
(D) none of these
2. Clubbing provisions under section 64(1)(vi) are applicable where the asset is transferred by an
individual without an adequate consideration to:
a) daughter’s husband
(B) son’s wife
(C) major son
(D) major daughter
3. Income of a minor married daughter shall:
a) be clubbed in the income of her husband
b) be clubbed in the income of the parent whose income other than such income is
greater
c) not be clubbed and taxable in her hands
4. In the case of non-company assessee, the total preliminary expenses incurred are allowed
deduction to the extent of:
(A) 2 % of the cost of the project
(B) 5 % of the cost of the project
(C) 10 % of the cost of the project
(D) Any of the above
5. Expenditure incurred for obtaining licence to operate telecommunication services shall be allowed
in:
a) 10 equal instalments
b) 14 equal instalments
c) in equal instalments over the period for which the licence remains in force
6. Weighted deduction of 200 % for in-house research u/s 35(2AB) in some cases shall be allowed
for the purchase of:
a) any assets
(B) any assets other than land
(C) any assets other than land and buildings
(D) Any of the above
7. If donation is made for scientific or social or statistical research, such research:
a) must relate to the business of the assessee
b) may or may not relate to the business of the assessee
c) none of these
8. Brought forward unabsorbed capital expenditure on scientific research can be carried forward:
a) for any number of years
(B) for 8 years
(C) for 10 years
(D) for 4 years
9. If the income of a business before claiming capital expenditure on scientific research is
Rs.50,000 and the capital expenditure incurred on scientific research related to the business of
the assessee is Rs.80,000, then Rs.30,000 shall be:
a) business loss
b) unabsorbed capital expenditure on scientific research
c) none of these two
10. An asset which was acquired for Rs.5,00,000 was earlier used for scientific research. After the
research was completed the machinery was brought into the business of the assessee. The
actual cost of the asset for the purpose of inclusion in the block of asset shall be:
(A) Rs.5,00,000
(B) Rs. NIL
(C) Market value of the asset on the date it was brought into business
11. R had been using an asset for his business and its W.D.V. as on 1.4.2015 was Rs.3,50,000. He
sold this asset to G for Rs.5,00,000 and G leased back this asset to R. The market value of this
asset on the date of sale was Rs.4,00,000; in this case, the actual cost of this asset to G for
charging depreciation shall be:
(A) Rs.5,00,000
(B) Rs.3,50,000
(C) Rs.4,00,000
(D) Rs. 2,00,000
12. Where an electricity company charging depreciation on straight line method on each asset
separately, sells any asset for a price less than the opening W.D.V. the balance amount shall be
treated as:
a) short-term capital loss
(B) terminal depreciation
(C) written down value
(D) long term capital loss
13. Where the entire block of the asset is sold for a price more than the opening W.D.V. and asset,
if any, acquired during the year, the excess amount shall be subject to:
(A) Balancing charge
(B) Short-term capital gain
(C) LT or STCG depending upon the period for which block is held
14. All companies other than those covered u/s 11 are required to file return of income in:
a) Form No.ITR 6
(B) Form No.ITR 5
(C) Form No.ITR 4
(D) Form No.ITR 7
15. Belated return u/s 139(4) can be filed at any time:
(A) before the expiry of the relevant AY
(B) before the expiry of one year from the end of the relevant AY
(C) before the expiry of one year from the end of the relevant AY or before the assessment is
complete, whichever happens to be earlier
16. For the PY 2015-16, the assessee incurred loss under the head, income from house property
amounting to Rs.1,20,000. His other income for the same previous year is Rs.50,000. The due
date of filing the return of income is 31.7.2017 but he submitted the return of income on
9.9.2017. In this case, the assessee:
a) shall be allowed to carry forward the loss of Rs.70,000
b) shall not be allowed to carry forward the loss of Rs.70,000
c) None of the above
17. For the PY 2015-16, the business income of the assessee, before providing current year
depreciation of Rs.300,000 was Rs.2,40,000. His due date for furnishing the return of income was
30.9.2017 but he submitted the return on 15.12.2017. In this case, the assessee shall:
a) be allowed to carry forward unabsorbed depreciation of Rs.60,000
b) not allowed to carry forward unabsorbed depreciation of Rs.60,000
c) at the discretion of Assessee
d) None of the above
18. ‘R’ is employed with G Ltd., at a salary of Rs. 25,000 p.m. As ‘G’ Ltd., was in financial crisis, it
paid the salary of January 2016 to March 2016 to R only in July 2016. The gross salary of ‘R’
for the assessment year 2016-17 shall be:
a) Rs.3,00,000
(B) Rs.2,25,000
(C) None of these two
(D) 3,75,000
19. For claiming deduction of entertainment allowance Government employee includes:
a) Central and State Government employee
b) State Government employee
c) Central and State Government employees and employees of local authority
d) Central and State Government employees, employees of local authority and employees of
statutory corporation
20. Interest credited to recognized provident fund shall be:
a) fully exempt
(B) fully taxable
(C) exempt up to 9.5 %
(D) exempt up to 8.5 %
21. Employee’s/assessee’s own contribution to statutory provident fund or recognized provident fund
or public provident fund shall be subject to:
a) deduction under section 80C
(B) deduction under section 80CCC
(C) deduction under section 16 from gross salary
(D) rebate under section 88
22. Tea and snacks are provided to employees in the office during office hours. The value of the
perquisite shall be:
a) NIL
(B) NIL, if it up to Rs.50 per meal
(C) Actual amount spent by the employer
(D) None of the above
23. Period of holding of right shares or any other security shall be reckoned from:
a) the date of the right share/any other securities are offered
b) the date of right shares/such securities are applied by the assessee
c) the date of allotment of right shares/such securities
24. For claiming exemption under section 54, the assessee should construct the residential property
within:
a) one year before or two years after the date of transfer
b) one year before or three years after the date of transfer
c) within three years after the date of transfer
d) within two years after the date of transfer
25. Exemption u/s 54F is available in respect of transfer of:
a) any capital asset
b) residential house property
c) any capital asset other than residential house property
26. R is a member of house building Co-operative Society who is the owner of flats constructed by
it. One of the flats is allotted to R. The income from such house property shall be taxable in the
hands of:
a) Co-operative Society
(B) R as deemed owner
(C) Any of the above
(D) At the option of assessee
27. Municipal tax is a deduction from:
a) Gross Annual Value
(B) Net Annual Value
(C) Income from house property
(D) None of the above
28. A new business was set up on 15.10.2015 and it commenced its business from 1.12.2015. The
first previous year in this case shall be:
a) 15.10.2015 to 31.03.2016 (B) 1.12.2016 to 31.3.2016
(C) 2015-2016
(D) 2016-2017
29. A person leaves India permanently on 15.11.2015. The assessment year for income earned till
15.11.2015 in this case shall be:
a) 2015-16
(B) 2016-17
(C) 2014-15
(D) None of the above
30. The maximum amount which Income-tax is not chargeable in case of a co-operative society isa) Rs.2,50,000
(B) Rs.3,00,000
(C) NIL
(D) None of the above
31. ‘R’, a person of Indian origin visited India on 3.10.2014 and plans to stay here for 185 days.
During 4 years prior to previous year 2015-16, he was in India for 750 days. Earlier to that he
was never in India. For the AY 2016-17, ‘R’ shall be:
resident and ordinarily resident in India
resident but not ordinarily resident in India
non-resident
32. ‘R’, a citizen of India left India for U.S. on 16.8.2010 for booking orders on behalf of an Indian
Company for exporting goods to U.S. He came back to India on 5.5.2012. He had been resident
in India for the past 10 years. For assessment year 2012-13, R shall be:
a) resident and ordinarily resident in India
b) resident but not ordinarily resident in India
c) non-resident in India
33. Paresh, software engineer at ABC Ltd. left India on 10th August, 2014 for the treatment of his
wife. For income-tax purpose, his residential status for the assessment year 2015-16 will be
a) Resident
(B) Non-resident
(C) Not ordinarily resident
(D) None of the above
34. The following additional conditions are to be satisfied by a person to be resident and
ordinarily resident in India:
a) He is a resident in at least any two out
of the
ten
previous
years immediately
preceding the relevant previous year
b) He has been in India for 730 days or more during the seven previous years immediately
preceding the relevant previous year
c) Both (A) and (B) of above
d) None of the above
35. X, an Indian citizen, who is living in Delhi since 1980, left for Japan on 1 July, 2012 for
employment. He came back to India on 1 January, 2014 on a visit and stayed for 4 months.
His residential status for the assessment year 2014-15 would be:
a) Resident and ordinarily resident
(B) Not ordinarily resident
(C) Non resident
(D) Resident.
36. Abhay earns the following income during the previous year ended 31 March, 2014: Interest on
U.K. Development Bonds (1/4 being received in India): 2,00,000; profits on sale of a building
in India but received in Holland : 2,00,000. The income liable to tax for the assessment year
2014-15 if Abhay is resident and not ordinarily resident in India, is:
(A) 2,50,000
(B) 4,00,000
(C) 2,00,000
(D) 50,000.
37. If Karta is resident and ordinarily resident in India but control and management of HUF is
situated partly outside India in the previous year, the HUF is —
a) Resident and ordinarily resident
(B) Not ordinarily resident
(C) Non resident
(D) Resident.
38. Atul, a foreign citizen. His father was born in Delhi in 1951 and mother was born in England in
1950. His grandfather was born in Delhi in 1922. Atul visited India to see Taj Mahal and visit
other historical places. He came to India on 1 November, 2013 for 200 days. He has never
come to India before. His residential status for assessment year 2014-15 will be:
a) Non resident in India
(B) Not ordinarily resident in India
(C) Resident in India
(D) None of the above.
39. HUF of Vivek Consisting of himself, his wife and 2 sons is assessed to income tax. The
residential status of HUF would be non-resident, when(A) The management and control or its affairs wholly in India
(B) The management and control or its affairs wholly in outside India
(C) The place of effective management in India
(D) The place of effective management in outside India
40. Vivek who was born and brought up in India left for employment in Dubai on 20th Aug, 2014. His
Residential status in respect of the assessment year 2016-2017 would be(A) Resident & Ordinarily resident
(B) Non-resident
(C) Not ordinarily resident
(D) None of the above
41. HUF which is Resident India shall be said to ROR in India if:
(A) any adult of HUF satisfies both additional conditions
(B) Karta of HUF satisfies any one basic condition
(C) Karta of HUF satisfies both additional conditions
(D) Karta of HUF satisfies any one additional condition
42. Govt. of India paid salary of 5 lakh and allowances/perquisites valued 2.20 lakh to a person who
is Indian citizen for the for the service rendered by him outside India for 5 months during the
previous year. His Total income chargeable to tax would be(A) 7,20,000
(B) 5,00,000
(C) 6,10,000
(D) Nil
43. Mr. C, a Japanese citizen left India after a stay of 10 years on 01.06.2013. During financial year
2014-15, he came to India for 46 days. Later, he returned to India for 1 year on 10.10.2015.
Determine his residential status for the A.Y. 2016-17.
(A) Resident & ROR in India
(B) RNOR
(C) Non-resident in India
(D) None of the above
44. The Income-tax Act, 1961 empowers the Central Government to enter into double taxation
avoidance agreements with other countries under section:
(A) 87
(B) 88
(C) 90
(D) None of the above
45. As per transfer pricing provisions, an advance pricing agreement (APA) is valid for —
(A) Such period as specified in the APA, but not exceeding 3 consecutive years
(B) Such period as specified in the APA, but not exceeding 5 consecutive years
(C) 2 Years
(D) None of the above.
46. Specified domestic transaction defined under;
(A) Section 92A
(B) Section 92B
(C) Section 92BA
(D) Section 92CA
47. Reference to Transfer pricing officer is given under
a) Section 92CA
(B) Section 92C
(C) Section 92A
(D) Section 92B
48. For maintaining information and document of international transaction, aggregate value of
international transaction should be:
(A) More than 1 crores
(B) 1 crore or more
(C) Less than 1 crore
(D) None the above.
49. If the income under head Other Sources includes family pension, what is the deduction allowed
from such family pension.
(A) 1/3rd of family pension income
(C) least of a) and b)
(B) ` 15,000
(D) average of a) and b)
50. What is the amount of deduction available on interest received from enhanced compensation?
(A) 60% of income by way of interest on enhanced compensation
(B) 50% of income by way of interest on enhanced compensation
(C) 70% of income by way of interest on enhanced compensation
(D) Nil
51. Dividend from Indian company is exempt under section ………………
(A) 10(34)
(B) 10(35)
(C) 10(33)
(D) None
52. The interest on Post Office Savings Bank account would be exempt from tax only upto for an
individual account
a) ` 3,500
b) ` 5,500
c) ` 7,000
d) without limit
53. Which of the following property is not taxable when transferred without consideration under
section 56(2)(vii)?
(A) drawings
(B) paintings
(C) cars
(D) sculptures
54. What is the maximum amount upto which deduction under section 80C is allowed?
(A) ` 1,00,000
(B) 20% of Gross Total Income
(C) ` 1,50,000
(D) No limit is specified
55. Mr. Z has income under the head Business/Profession ` 19,90,000.
Investment in NSC
` 50,000
Investment in PPF in name of Mrs. Z
` 5,000
Payment of premium for LIC policy taken in name of dependent father
Compute Total Income for the A.Y. 2016-17.
a) 18,90,000
(B) 19,24,000
(C) 19,35,000
` 11,000
(D) 19,40,000
56. If medical insurance is for the life of senior citizen of an age of 60 years or more, deduction
allowed shall be limited to the extent of
(A) 15,000
(B) 10,000
(C) 30,000
(D) no limit
57. Deduction under section 80DD for a person with severe disability shall be
(A) ` 50,000
(B) ` 1,25,000
(C) ` 75,000
(D) No limit
58. If amount incurred by assessee for the treatment of specified disease of spouse is ` 37,000. A
claim of ` 10,000 have been received under mediclaim policy. What amount of deduction shall be
allowed to him?
a) ` 37,000
b) ` 40,000
c) ` 60,000
59. Share of profit of Mr. Vivek who is a partner in M/s Amar & Co. is:
d) ` 27,000
a) Exempt from tax
(B) Taxable as his business Income
(C) Taxable as salary
(D) Taxable as Income from other sources
60. G has 4 minor children: 2 daughters and 2 sons. Annual income of 2 daughters was `7,500 and
` 5,000 and of sons was ` 5,500 and ` 1,250 respectively. The daughter having income of `
5,000 is suffering from a disability specified under section 80U. Work out the amount of income
earned by minor children to be clubbed in the hands of G.
a) ` 13,250
(B) ` 10,000
(C) ` 13,500
(D) `9,750
61. Mrs. Ravi received salary of ` 4,00,000 from a firm where her husband has 16 % profit share.
Mrs. Ravi does not have any qualification or experience. Apart from above amount, the income
of Mrs. Ravi is `3,50,000
a) Mr. Ravi: ` 7,50,000, Mrs. Ravi: Nil
(B) Mr. Ravi: Nil, Mrs. Ravi: ` 7,50,000
(C) Mr. Ravi: ` 4,00,000, Mrs. Ravi: ` 3,50,000
(D) None of the above
62. Roshan earns ` 2,50,000 as interest from a firm where he has made a total investment of `
5,00,000 as on first day of previous year. Out of the total investment of ` 5,00,000, ` 3,00,000 is
the amount which was gifted to him by his wife, Teena. What is amount that shall be clubbed in
the income of Teena
(A) ` 2,50,000
(B) ` 1,50,000
(C) ` 1,00,000
(D) Nil
63. For the previous year 2014-15, Mr. X has filed original return of income on 01.11.2015 whose
due date of filing of return was 31st July 2015, he can file revised return of income latest upto
a) 31st March 2016
b) 31st March 2017
c) 30th September 2016
d) Return cannot be revised
64. Notice u/s 143(2) is issued for
a) Assessment under section 143(3)
b) Assessment under section 143(2)
c) Assessment under section 143(3) or 143(2)
d) None of the above
65. If the escaped income is less than ` 1,00,000 u/s 147, notice can be issued upto ……………..
a) 4 years from end of relevant assessment year
b) 16 years from end of relevant assessment year
c) 6 years from end of relevant assessment year
d) 4 years from end of relevant previous year
66. Advance tax is payable in ……………. Installments by non-corporate assessee?
a) Three
b) Four
c) Any of the above
67. …….. of tax is payable as advance tax upto 15
a) 30%
b) 45%
th
d) None of above
September in previous year by HUF?
c) 75%
d) 60%
68. The maximum exemption of gratuity shall be:
a) Rs.6,00,000
(B) Rs.3,50,000
(C) Rs.10,00,000
(D) Twenty months’ Salary
69. An employee is neither a Government employee nor covered under Payment of Gratuity Act,
1972. Salary for the purpose of calculating half month shall be taken as:
a) last drawn salary
b) average salary of 10 months preceding the month of retirement
c) average salary of each completed year
70. For computation of arm’s length price ……………. methods prescribed by the government.
a) Six
b) Five
c) Two
d) Seven
PART - B
71. The following are details of purchases, sales, etc. effected by Varadan & Co., a registered dealer
under VAT and CST Act, for the year ended 31.03.2015:
Particulars
Amount (`)
Purchase of raw materials within State (500 units, inclusive of VAT levy at 12.5%)
11,25,000
Inter-State purchases of raw materials, inclusive of CST at 2%.
4,08,000
Import of packing material, inclusive of customs duty of ` 10,000
2,10,000
(input credit to be spread over 2 financial years)
5,50,000
Capital goods purchased on 01.04.2013 of VAT levy at 10% (inclusive)
Sales of taxable goods within State inclusive of VAT levy at 4%
40,24,000
Answer the below mentioned questions?
(i) What will be cost of raw material which is purchased within the state?
a) 11,25,000
b) 10,00,000
c) 12,65,625
d) Any of the above
(ii) What will be cost of raw material which is an interstate purchase?
a) 4,16,160
b) 4,00,000
c) 4,08,000
d) None of the above
(iii) Dealer is eligible for how much credit?
a) 1,50,000
b) 1,75,000
(iv) How much VAT is payable by the dealer?
a) 1,54,000
b) 1,54,769
c) 1,25,000
d) 50,000
c) 1,60,960
d) Nil
(v) What is the amount of VAT actually payable by the assessee?
a) 4,769
b) 4,750
c) 4,500 d) Nil
72. Answer the questions below for the month of December 2014 using invoice method
Purchase price of goods acquired from local market (including VAT)
VAT rate on input
52 lakhs
4%
Transportation, insurance, warehousing and handling cost incurred by X
Goods sold at a profit margin on cost of production
VAT rate on sales
20,000
14%
12.50%
(i) What will be cost of raw material which is acquired from local market?
a) 52,00,000
b) 50,00,000
c) 54,08,000
d) Any of the above
(ii) What is the value of sales excluding VAT i.e. the amount on which VAT is to be levied?
a) 50,20,000
b) 57,22,800
c) 57,22,000
d) 57,00,800
(iii) How much VAT is payable by the dealer?
a) 7,15,000
b) 7,15,300
c) 7,15,350
d) Nil
c) 1,75,000
d) Nil
(iv) Dealer is eligible for how much credit?
a) 1,50,000
b) 2,00,000
(v) What is the amount of VAT actually payable by the assessee?
a) 5,15,000
b) 5,15,350
c) 5,65,350
d) Nil
73. E-payment of service tax is compulsory in the case of assessee who had paid service tax in the
preceding financial year equal to at least
a) ` 10 lakh
b) ` 40 lakh
c) ` 50 lakh
74. What was the rate of service tax when it was introduced for the first time?
a) 10 %
b) 12 %
c) 5 %
d) No limit
d) Nil
75. In computing the value of taxable service, income tax deducted at source is
a)
included in the charged amount
(C) deducted from the charged amount
(B) not included in the charged amount
(D) None of the above
76. The power to levy service tax is now provided by the Constitution vide entry No.
a) 92C of the Union list
b) 97 of the Union list
c) 54 of the State list
d) 93 of the Union list
77. Certificate of registration shall be issued within 7 days from
a) date of receipt of application
(B) date of making application
(C) later of a) and b)
(D) None of the above
78. Within how many days of change in any information shall be intimated by assessee to
jurisdictional Assistant/Deputy Commissioner?
a) 7 days
b) 30 days
c) 15 days
d) 10 days
79. What is due date of payment of service tax on service which is provided by a person other than
individual or proprietary firm or partnership firm where the payment is made through any mode
other than internet banking?
a) 6th day of the following quarter
(B) 6th day of the following month
(C) 5th day of the following month
(D) 5th day of the following quarter
80. Service tax is not applicable to the state of
a) Jharkhand
b) Himachal Pradesh
c) Tripura
d) Jammu and Kashmir
81. Services provided to a recognized sports body by an individual as a player, referee, umpire,
coach or team manager for participation in a sporting event organized by a recognized sports
body is exempt from service tax by virtue of
a) Negative list
(B) Notification No. 25/2012
(C) Notification No. 26/2012
(D) None of the above and is taxable
82. Which rule prescribes the form, manner and frequency of furnishing the return?
a) Rule 7 of the Service Tax Rules, 1994
b) Rule 9 of the Service Tax Rules, 1994
c) Rule 7 of the Service Tax Rules, 2012
d) None of the above
83. Definition of service is provided under section
a) Section 66B
b) Section 65B(45)
c) Section 65B(44)
d) none of the above
84. The aggregate value of taxable turnover of an individual during the financial year 2013-14 is `49
lakh. Individual during the current financial year can pay service tax on
a) on receipt basis on all the taxable services provided
b) on receipt basis on taxable services upto ` 50 lakh
c) on accrual basis on all the taxable services provided
d) none of the above
85. When is small service provider required to obtain registration?
a) when value of total services exceeds ` 10 lakh
b) when value of taxable services exceeds ` 10 lakh
c) when value of total services exceeds ` 9 lakh
d) when value of taxable services exceeds ` 9 lakh
86. The aggregate value of taxable turnover of an individual during the financial year 2013-14 is `51
lakh. Individual during the current financial year shall pay service tax on
a) on receipt basis on all the taxable services provided
b) on receipt basis on taxable services upto ` 50 lakh
c) on accrual basis on all the taxable services provided
d) none of the above
87. Which rule governs the provision of place of provision in relation to service given specifically for an
immovable property?
a) Rule 8 of Place of provision of services rules, 2014
b) Rule 6 of Place of provision of services rules, 2014
c) Rule 3 of Place of provision of services rules, 2012
d) Rule 5 of Place of provision of services rules, 2012
88. As per Rule 8 of Place of provision of service rules, 2012, when place of provision of service as per
rule 4, 5 and 6 is outside, which place is taken as place of provision of service?
a) location of service receiver
b) location of service provider
c) location of performance of service
d) location of the event
89. Which rule of place of provision of service rule, 2012 provides that location of service receiver is place
of provision of service where it was outside India as per rule 4, 5 and 6?
a) Rule 8 of Place of provision of services rules, 2012
b) Rule 6 of Place of provision of services rules, 2014
c) Rule 8 of Place of provision of services rules, 2014
d) Rule 7 of Place of provision of services rules, 2012
90. Service tax return can be revised within a period of
a) 30 days
b) 60 days
c) 90 days
d) 120 days
91. How much service tax (including EC + SHEC) will be payable by an air travel agent who made
booking for domestic travelling of `1,00,000 and booking for international travelling of ` 1,50,000.
a) 2,800
b) 2,400
c) 30,090
d) 1,575
92. How much service tax (including EC + SHEC) will be payable by a lottery agent who sold 5
lottery tickets having aggregate face value of ` 51,00,000 each (guaranteed prize layout is 90%)
and 3 lotteries tickets having face value of ` 1,01,00,000 each (guaranteed prize layout is 70%)
a) 6,54,600 st/2 [i.e. (6 x 5 x 12,800) + (11 x 3 x 8,200)
b) 6,68,400 [i.e. (6 x 5 x 8,200) + (11 x 3 x 12,800)
c) 5,56,200 [i.e. (6 x 5 x 7,210) + (10 x 3 x 11,330)
d) None of the above