CA Kedar Junnarka.pdf - MCQ Book CA Final Direct...

Unformatted text preview: MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar CA FINAL DIRECT TAXES (OLD AND NEW SYLLABUS) MCQ BOOK Social Media Connect Facebook Page – YouTube Channel – Telegram Channel – t.me/junnarkarkedar Telegram Group – t.me/junnarkarkedartax Telegram Group for MCQs only – t.me/junnarkarkedarfinalmcq (All MCQ related queries will be resolved on this group; Also weekly target for solving MCQs will be discussed on this group) 8149108826 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar Contents No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Chapter Name Profits and Gains of Business and Profession Income Computation and Disclosure Standards Income from Capital Gains Income from Other Sources Taxation of Entities TDS TCS Assessment Procedure Powers of Income Tax Authorities Penalties and Prosecution Appeals, Revision and Rectification Settlement Commission Advance Tax, Refund and Interest Clubbing of Income Set off and Carry Forward of Losses GAAR Residential Status and Accrual of Income International Taxation Transfer Pricing Advance Rulings, Advance Pricing Arrangement and Safe Harbour Rules New Syllabus Topics Page No. 1.1 – 1.32 2.1 – 2.5 3.1 – 3.21 4.1 – 4.13 5.1 – 5.25 6.1 – 6.19 7.1 – 7.10 8.1 – 8.11 9.1 – 9.11 10.1 – 10.15 11.1 – 11.7 12.1 – 12.8 13.1 – 13.5 14.1 – 14.7 15.1 – 15.4 16.1 – 16.11 17.1 – 17.9 18.1 – 18.16 19.1 – 19.13 20.1 – 20.9 You can download our App from Google Play store by searching “CA Kedar Junnarkar” 8149108826 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar Chapter 1 : Profits and Gains of Business and Profession 1. Section _____________ is the charging section of PGBP a) 27 b) 28 c) 29 d) 26 Answer- B 2. Income chargeable u/s 28 includes: a) Income from business, profession or vocation b) Any amount received by any person, by whatever name called, holding an agency in India for any part of the activities relating to the business of any other person, at or in connection with the termination of the agency or the modification of any of the terms and conditions relating thereto c) Any amount received by any person, for or in d) All the above connection with the vesting in the Government or any corporation owned or controlled by the Government under any law for the time being in force, of the management of any property or business Answer- D 3. Income chargeable u/s 28 includes: a) Income from specific services b) Any amount received by any person, by whatever name performed for its members by a trade, called, at or in connection with the termination or professional or business modification of the terms and conditions, of any contract relating to his business. c) Incentives received or receivable by d) All the above assessee carrying on export business Answer- D 4. Income chargeable u/s 28 includes: a) Value of any benefit or perquisite: b) Sum due to, or received by, a partner of a firm. c) Any sum received or receivable, in cash or d) All the above kind, under an agreement for not carrying out any activity Answer- D 5. Which of the following transactions are not to be regarded as speculative transactions: a) Hedging contract in respect of raw materials or b) Hedging contract in respect of stocks and merchandise shares c) Forward contract d) All the above Answer- D 8149108826 1.1 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 6. Which of the following transactions are not to be regarded as speculative transactions: a) Trading in derivatives b) Trading in commodity derivatives c) Forward contract d) All the above Answer- D 7. Section ____________ allows deduction in respect of the rent, rates, taxes, repairs and insurance of buildings used by the assessee for the purpose of his business or profession a) 30 b) 31 b) 32 d) 33 Answer- A 8. Apart from rent, section 30 allows deductions in respect of expenses incurred on account of repairs to building in case where _______________ a) the assessee is the owner of the building b) the assessee is a tenant who has undertaken to bear the cost of repairs to the premises c) Even if the assessee occupies the premises d) All the above otherwise than as a tenant or owner Answer- D 9. Section ___________ allows deduction in respect of the expenses on current repairs and insurance of machinery, plant and furniture in computing the income from business or profession a) 30 b) 31 b) 32 d) 33 Answer- B 10. The deduction allowable in respect of premia paid for insuring the machinery, plant or furniture is subject to the ___________conditions a) The insurance must be against the risk of b) The assets must be used by the assessee for damage or destruction of the machinery, plant or the purposes of his business or profession during furniture the accounting year c) The premium should have been actually paid d) All the above Answer- D 11. Where the machinery, plant and furniture are used partly for business and partly for other purposes, only a proportionate part of the expenses attributable to that part of the machinery, plant and furniture used for purposes of business will be allowed as a deduction a) True b) False Answer- A 12. The condition to be satisfied for allowance of depreciation are; a) The assets in respect of which depreciation is b) The assets should be actually used by the claimed must belong to specified categories assessee for purposes of his business or profession during the previous year c) The assessee must own the assets, wholly or d) All the above partly Answer- D 8149108826 1.2 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 13. Where any asset is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than __________________ depreciation shall be allowed at 50 per cent of the allowable depreciation a) 260 b) 180 c) 90 d) 120 Answer- B 14. Rate at which additional depreciation is charged is __________ a) 30 b) 15 c) 20 d) 5 Answer- C 15. Additional depreciation is not allowable in case of _________________ a) any machinery or plant which, before its b) any machinery or plant installed in office installation by the assessee, was used within or premises, residential accommodation, or in any outside India by any other person guest house c) office appliances or road transport vehicles d) All the above Answer- D 16. All asset are divided into ______ major categories a) 2 c) 4 Answer- C b) 6 d) 3 17. Any new machinery or plant installed to manufacture or produce any article or thing by using any technology or other know-how developed in or is an article or thing invented in a laboratory owned or financed by the Government or a laboratory owned by a public sector company or a University or an institution recognized by the Secretary, Department of Scientific and Industrial Research, Government of India shall be treated as a part of the block of assets qualifying for depreciation @ _____% a) 20 b) 40 c) 30 d) 60 Answer- B 18. In order to avail increased rate of depreciation under Rule 5(2) the conditions to be fulfilled includes: a) The right to use such technology or other b) The return filed by the assessee for any previous know-how or to manufacture or produce such year in which the said machinery is acquired, article or thing has been acquired from the should be accompanied by a certificate from the owner of such laboratory or any person Secretary, Department of Scientific and Industrial deriving title from such owner Research, Government of India to the effect that such article or thing is manufactured or produced by using such technology or other know-how developed in such laboratory or such article or thing has been invented in that laboratory c) The machinery or plant is not used for the d) All the above purpose of business of manufacture or production of any article or thing specified in the Eleventh schedule 8149108826 1.3 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar Answer- D 19. As per the sixth proviso to section 32(1)(ii), depreciation allowable in the hands of ______________ shall not exceed the amount of depreciation calculated at the prescribed rates as if the succession, business reorganization, amalgamation or demerger had not taken place a) predecessor and the successor in case of b) predecessor company and successor LLP in succession of firm/ sole proprietary concern by a case of conversion of a private company or an company fulfilling the conditions mentioned in unlisted public company into an LLP fulfilling the section 47(xiii)/(xiv) conditions mentioned in section 47(xiiib) c) predecessor and the successor in case of d) All the above succession of business otherwise than on death Answer- D 20. For the purpose of allowing depreciation an assessee claiming deduction in respect of the assets acquired on hire purchase would be required to furnish a certificate from the seller or any other suitable documentary evidence in respect of the initial value or the cash price of the asset a) True b) False Answer- A 21. The expression __________ means the actual cost of the asset to the assessee as reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority a) Actual Cost b) Book Value c) Market Value d) None of the above Answer- A 22. Where an assessee incurs any expenditure for acquisition of any asset or part thereof in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account, exceeds Rs___________, such expenditure shall not form part of actual cost of such asset a) 5,000 b) 10,000 c) 15,000 d) 20,000 Answer- B 23. Where inventory is converted or treated as a capital asset and is used for the purpose of business or profession, the _____________________of such inventory as on the date of its conversion into capital asset determined in the prescribed manner, shall be the actual cost of such capital asset to the assessee a) Actual Cost b) Book Value c) Fair market Value d) None of the above Answer- C 24. Where an asset is acquired by way of gift or inheritance, its actual cost shall be the written down value to the previous owner a) True b) False Answer- A 8149108826 1.4 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 25. Where any asset which had once belonged to the assessee and had been used by him for the purposes of his business or profession and thereafter ceased to be his property by reason of transfer or otherwise, is re-acquired by him, the actual cost to the assessee shall be a) the written down value at the time of original b) the actual price for which the asset is retransfer acquired by him c) Either A or B which is lower d) Either A or B which is higher Answer- D 26. Where a building which was previously the property of the assessee is brought into use for the purposes of the business or profession, its actual cost to the assessee shall be the actual cost of the building to the assessee, as reduced by an amount equal to the depreciation calculated at the rates in force on that date that would have been allowable had the building been used for the purposes of the business or profession since the date of its acquisition by the assessee a) True b) False Answer- A 27. In a scheme of amalgamation, if any capital asset is transferred by the amalgamating company to the amalgamated Indian company, the actual cost of the transferred capital assets to the amalgamated company will be taken at the same amount as it would have been taken in the case of the amalgamating company had it continued to hold it for the purposes of its own business a) True b) False Answer- A 28. In the case of a demerger, where any capital asset is transferred by the demerged company to the resulting Indian company, the actual cost of the transferred asset to the resulting company shall be taken to be the same as it would have been if the demerged company had continued to hold the asset a) True b) False Answer- A 29. Where any capital asset is acquired under a scheme for corporatization of a recognised stock exchange in India approved by the SEBI, the actual cost shall be deemed to be the amount which would have been regarded as actual cost had there been no such corporatization a) True b) Partly True c) False Answer- A 30. Section 43(1) provides that the actual cost of any capital asset, on which deduction has been allowed or is allowable to the assessee under section 35AD, shall be _______________ a) Book Value b) Fair Market Value c) Nil d) Either A or B which is lower Answer- C 8149108826 1.5 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 31. Explanation 6 to section 43(6) provides that a) the actual cost of an asset has to be adjusted b) the total amount of depreciation on such asset by the amount attributable to the revaluation of provided in the books of account of the assessee such asset, if any, in the books of account in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be deemed to be the depreciation actually allowed under the Income-tax Act, 1961 for the purposes of section 43(6) c) the depreciation actually allowed as above has d) All the above to be adjusted by the amount of depreciation attributable to such revaluation Answer- D 32. The written down value of any block of assets, may be reduced to nil as per section ___ a) 47 b) 48 c) 49 d) 50 Answer- B 33. Section _________provides for carry forward of unabsorbed depreciation. Where, in any previous year the profits or gains chargeable are not sufficient to give full effect to the depreciation allowance, the unabsorbed depreciation shall be added to the depreciation allowance for the following previous year and shall be deemed to be part of that allowance a) 32(1) b) 32(2) c) 32(3) d) 32(4) Answer-B 34. Section __________) provides for the manner of calculation of the amount which shall be chargeable to income-tax as income of the business of the previous year in which the moneys payable for the building, machinery, plant or furniture on which depreciation has been claimed under section 32(1)(i),. a) 42(1) b) 42(2) c) 42(3) d) 42(4) Answer- A 35. The balancing charge will be the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, exceeds the _______________ a) Market Value b) Actual cost c) written down value. d) Net realizable value Answer- C 36. In order to encourage the setting up of industrial undertakings in the backward areas of the States of Andhra Pradesh, Bihar, Telangana and West Bengal, section 32AD provides for a deduction of an amount equal to __________% of the actual cost of new plant and machinery. a) 10 b) 15 c) 20 d) 5 Answer- B 8149108826 1.6 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 37. The conditions to be satisfied for the purpose of section 32AD are :. a) The assessee sets up an undertaking or b) the assessee acquires and installs new plant enterprise for manufacture or production of any and machinery for the purposes of the said article or thing on or after 1st April, 2015 in any undertaking or enterprise during the period backward area notified by the Central between 1st April, 2015 and 31st March, 2020 in Government in the State of Andhra Pradesh or the said backward areas Bihar or Telangana or West Bengal c) Both A&B d) Either A or B Answer- C 38. In order to ensure that the manufacturing units which are set up by availing this incentive actually contribute to economic growth of these backward areas by carrying out the activity of manufacturing for a substantial period of time, a suitable safeguard restricting the transfer of new plant and machinery for a period of __________years has been provided. a) 3 b) 4 c) 5 d) 8 Answer- C 39. Under section 32(1)(iia), to encourage investment in new plant or machinery, additional depreciation of ________% of the actual cost of plant or machinery acquired and installed is allowed. Such additional depreciation under section 32(1)(iia) is allowed over and above the normal depreciation under section 32(1)(ii).. a) 10 b) 15 c) 20 d) 5 Answer- C 40. Additional depreciation @_________-% to be allowed to assessees setting up manufacturing units in notified backward areas of specified States and acquiring and installing of new plant & machinery [Proviso to section 32(1)(iia)] a) 10 b) 15 c) 20 d) 35 Answer- D 41. The benefit available under sections 32AD would not be allowed in respect of second hand plant and machinery n a) True b) False Answer- A 42. In the case of a demerger, the cost of acquisition of the shares in the resulting company shall be the amount which bears to the cost of acquisition of shares held by the assessee in the demerged company the same proportion as the _________of the assets transferred in a demerger bears to the net worth of the demerged company immediately before such demerger a) gross book value b) net book value c) market value d) purchase value Answer- B 8149108826 1.7 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 43. Section ___________provides for a deduction in the computation of the taxable profits in the case of an assessee carrying on business of growing and manufacturing tea or coffee or rubber in India a) 33AA b) 33AB c)33AC d)33AD Answer- B 44. Section 33AB the quantum of deduction allowed shall be __________% a) 25 b) 30 c) 40 d) 20 Answer- C 45. Where the assessee is a firm or any association of persons or any body of individuals the deduction under this section shall not be allowed in the computation of the income of any partner or member of such firm, AOP or BOI. a) True b) False Answer-A 46. Any amount standing to the credit of the assessee in the special account or deposit account can be withdrawn for the purpose of ___________ a) Closure of business b) Death of an assessee c) Partition of HUF d) All the above Answer- D 47. Any amount standing to the credit of the assessee in the special account or deposit account can be withdrawn for the purpose of ___________ a) Closure of business b) Dissolution of a firm c) Liquidation of a company d) All the above Answer- D 48. Where the sum standing to the credit of the assessee in the Special account or in the Deposit account is released by the National Bank or is withdrawn by the assessee from the Deposit account and is utilized for the purchase of_______ the whole of such amount so utilized will be treated as taxable profits of that year and taxed accordingly a) Any machinery or plant installed in any office premises or residential b) Any office appliances accommodation including a guest house c) Any machinery or plant, the whole of the actual cost of which is allowed d) All the above as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head ‘Profits and gains of business or profession’ of any one previous year Answer-D 49. Where any amount standing to the credit of the assessee in the special account or in the deposit account is utilized by the assessee for the purpose of any expenditure in connection with such business in accordance with the scheme or deposit scheme, such expenditure shall not be allowed in computing the business income a) True b)False Answer-A 8149108826 1.8 MCQ Book CA Final Direct Taxes (Regular Batch May/November 2019) by CA Kedar Junnarkar 50. Where an asset acquired in accordance with the scheme or deposit scheme is sold or otherwise transferred in any ...
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