RAHI’s PRACTICE SET 6

Number of questions: 100 Time Allowed: 120 minutes

Important Notice All questions carry equal mark. However, for every wrong answer marked .25 mark will be
deducted.
Minimum mark required to be qualified is 50

1. Loss from agricultural activity can be adjusted against income from

a. PGBP b. Other sources
c. All heads except salary & Casual income d. cannot be set off against any income
2. Business income of M/s Ram & Sons before allowing deduction on account of depreciation amounted to Rs.
1,20,000. Depreciation as per the provisions of section 32 amounted to Rs. 2,00,000. The unabsorbed depreciation
allowable to be carried forward
a. Rs. 80,000 b. Rs. 1,20,000
c. Rs. 2,00,000 d. Rs. 40,000
3. In the case of set off, please arrange the following in order of their priority
I. Adjustment is to be made for brought forward business loss.
II. Adjustments are to be made for unabsorbed depreciation, unabsorbed capital expenditure on scientific
research or on family planning
III. Adjustments are to be made for current scientific research expenditure, family planning expenditure and
current depreciation.

a. I>II>III b. III>I>II
c. II>III>I d. III>II>I
4. Section 78 contains provisions Restrictions relating to carry forward and set off of loss in case of change in
constitution of a partnership firm due to death or retirement of a partner (i.e. when a partner goes out of firm by
retirement or death) u/s 78 is/are applicable
a. in cases of both loss and adjustment of unabsorbed depreciation, unabsorbed capital expenditure on
scientific research or family planning expenditure
b. in cases of neither loss and adjustment of unabsorbed depreciation, unabsorbed capital expenditure on
scientific research or family planning expenditure
c. only in case of loss and is not applicable in cases of adjustment of unabsorbed depreciation, unabsorbed
capital expenditure on scientific research or family planning expenditure
d. only in cases of adjustment of unabsorbed depreciation, unabsorbed capital expenditure on scientific
research or family planning expenditure and is not applicable in case of loss
5. Losses under the head “Profits and gains of business or profession” can be carried forward only if the return
of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return, as
prescribed under section 139(1).
a. True b. False
6. Pick the correct one
a. The adjustments arising on account of transition to Ind AS from existing Indian GAAP are required to
be recorded under Other Equity in the balance sheet.
b. The amount of these adjustments are defined as transition amount and amount of such adjustments
that will not be re-classified should be included in computation of book profit equally over a period of 4
years starting from the year of first-time adoption of Ind AS, subject to certain exclusions.
c. Both A&B
d. None of the given
7. Period for which MAT carried forward has been enhanced from 10 years to 15 years by the
a. Finance Act 2018 b. Finance Act 2017
c. Finance Act 2016 d. Finance Act 2019

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

8. Under Section 115JB any item credited/debited to OCI that will not re-classified to profit or loss should be
ignored for the purpose of computing book profit if that item is:
a. Revaluation surplus for fixed assets and intangible assets under Ind AS 16 and Ind AS 38
b. Gains or losses from investments in equity instruments measured at fair value through other
comprehensive income (FVTOCI) as per Ind AS 109.
c. Both A&B
d. None of the given
9. Where the amount of Foreign Tax Credit (FTC) allowed against the MAT exceeds the amount of such FTC
admissible against the tax payable by the assessee under normal provisions of the Income-Tax Act, then, while
computing the amount of FTC under this sub-section, such excess amount shall not be ignored.
a. True b. False
10. The taxable income of Deepak Power Pvt. Ltd. computed as per the provisions of Income-tax Act is Rs. 28.4
lakh. Book profit of the company computed as per the provisions of section 115JB is Rs. 18.4 lakh. What will be the
tax liability of SM Energy Pvt. Ltd, ignoring surcharge and cess?
a. Rs. 3.40 lakh b. Rs. 5.52 lakh
c. Rs. 5.25 lakh d. Rs. 8.52 lakh
11. With respect to taxation
a. India and Pakistan have entered into Double Taxation Avoidance Agreement (DTAA)
b. India and Pakistan have not entered into Double Taxation Avoidance Agreement (DTAA) neither any
unilateral relief has been provided for the income taxed in Pakistan
c. India and Pakistan have not entered into Double Taxation Avoidance Agreement (DTAA) but India
provides unilateral relief for the income taxed in Pakistan
d. India and Pakistan have entered into Double Taxation Avoidance Agreement (DTAA) as well as India also
provides additional benefit under unilateral relief for the income taxed in Pakistan
12. Where one enterprise is controlled by an HUF, the other enterprise is controlled by a member of such HUF
or by relative of a member of such HUF or jointly, the enterprises are said to be
a. Associated Enterprises b. Representative Enterprises
c. Closed Enterprises d. Symbolic Enterprises
13. Advance Pricing Agreement (APA) is
a. binding upon IT department only
b. Binding upon both the tax-payer and IT department
c. Binding upon both the tax-payer, IT department and IT Appellate Tribunal.
d. Binding upon both the tax-payer, IT department, IT Appellate Tribunal and all Courts of Law.
14. Any income of a sportsman including an athlete, who is foreign citizen & non-resident, from following is
chargeable u/s 115BBA
a. Participation in India in any game or sports other than a game whose winnings taxable u/s 115BB
b. Advertisement
c. Contribution of articles relating to any game or sport in India in newspapers, magazines or journals
d. All of the above
15. Rate of TDS (Section 194E) on Payment to Non Resident Sportsmen/Sport Association u/s 115BBA is
a. 10% b. 20%
c. 30% d. Normal Slab rate
16. Pick the incorrect one
a. Unilateral relief is provided by the country where income is sourced in spite of absence of mutual
agreement between two countries
b. In exemption method, a particular income is taxed in only one of two countries involved in agreement.
c. In tax credit method, the country of residence allows the tax payer the credit of tax paid in the country of
source.
d. None of the given

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

17. While determining the arm’s length price under the provisions of transfer pricing regulations, if the income
works out to a figure lower than the income shown in the books of accounts,
a. the provision of transfer pricing regulation will apply as usual.
b. the provision of transfer pricing regulation will not apply.
c. the provision of transfer pricing regulation will apply if both assessee and assessing officer agree
d. None of the given
18. A person, who has already undertaken any international transaction, is not eligible to apply for Advance
Pricing Agreement
a. True b. False
19. Every person who has entered into an international transactions or a specified domestic transaction shall
keep and maintain the requisite information and documents for a period of
a. 5 years from the end of FY in which such transaction was undertaken
b. 5 years from the end of relevant AY
c. 8 years from the end of relevant AY
d. 8 years from the end of FY in which such transaction was undertaken
20. The Audit Report in transfer pricing case issued by the CA in form
a. 3CCA b. 3CDB
c. 3CAD d. 3CEB
21. The circulars issued by the CBDT are
a. binding on the Income Tax Authorities except the appellate authorities.
b. binding on the assessee
c. binding on the Income Tax Authorities and assessee
d. binding on the Income Tax Authorities and assessee except the appellate authorities
22. The word assessee has been defined in Section
a. 2(6) b. 2(7)
c. 2(9) d. 2(8)
23. Pick the correct one
a. The reimbursement of capital outlay is a capital receipt even if the total amount received exceeds the cost
of the outlay itself.
b. Compensation received for the loss of a capital asset is a receipt of a capital nature whereas the
compensation received for damage to or loss of a trading asset is a revenue receipt.
c. Both A&B
d. None of the given
24. Although the general principle of law is to tax only revenue receipts as income, there are certain exceptions
to this rule under which capital receipts are also taxable as income. Pick the incorrect one
a. Any compensation received for termination of employment or modification of the terms of employment
would fall within the meaning of a profit in lieu of salary and consequently taxable as salary income.
b. Any compensation received for termination of managing agency or other contractual relationship in
relation to the management of whole or substantially the whole of the affairs of a company or the
modification of the terms and conditions relating thereto would be taxable as income from business.
c. Any compensation or other payment due to or received by any person for the termination or the
modification of the terms of any other agency held by him in India in relation to the business of any other
person would also be taxable as income from business regardless of the nature of the agency business
d. None of the given
25. Mr. Atul is a foreign citizen. His father was born in Patna in 1959 and mother was born in United State in
1962. His grandfather was born in Patna in 1942. Mr. Atul comes to India on 15 th October, 2019 for 300 days. He has
never come to India before. Determine his residential status for AY 2020-21.
a. Non-Resident b. Resident
c. Resident-not-ordinarily-Resident d. Resident-ordinarily-Resident
26. Pick regarding provision under Section 80QQB (Deduction from Royalty Income) EXCEPT
a. Applicable for individual Resident in India, who is author of a Book

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 b. Book is work of Literary, artistic or Scientific Nature and Text Books for schools, Magazines, newspaper,
Journals, Guides, Pamphlets are excluded
c. Deduction allowable is of 100% of such income or Rs. 5 lakh, whichever is less.
d. None of the given
27. Share in profit of firm received by a partner of that firm
a. is not taxable in the hands of the partner including limited liability partnership firm
b. is not taxable in the hands of the partner excluding limited liability partnership firm
c. is taxable in the hands of the partner including limited liability partnership firm
b. is taxable in the hands of the partner excluding limited liability partnership firm
28. Which of the following is not an example of capital receipt
a. Money received on issue of shares b. Money received on sale of land
c. Money received on sale of goods d. All of the above
29. Aggregate of incomes computed under the 5 heads of income after applying clubbing provisions and making
adjustments of set off and carry forward of losses is known as
a. Gross Income b. Net Income
c. Total Income d. Gross Total Income
30. The year in which income is earned is known as
a. Financial Year b. Assessment Year
c. Previous Year d. Income Year
31. Income accruing from agriculture in a foreign country is taxable in the case of an assessee being
a. Resident b. Not-ordinarily resident
c. Non-resident d. None of the above
32. Mr. Ram Prakash, an Indian Citizen, has been living in Patna since 1970, left for United Kingdom on 1st July 1,
2014. He comes back on 15th September 7, 2019. Residential status of Mr. Ram Prakash for the assessment year
2020-21 is
a. Non-Resident b. Resident
c. Resident-Ordinarily Resident d. Resident-Not Ordinarily Resident
33. Firms, association of persons, local authorities and other artificial juridical persons can be either resident
(ordinarily resident) or non-resident in India but they cannot be not ordinarily resident in India.
a. True b. False
34. Which of the following may be assessed at the discretion of Assessing officer during the PY itself
a. Shipping business of non-resident (Section 172)
b. Discontinued business (Section 176)
c. Assessment of association of persons or body of individuals or artificial juridical person formed for
a particular event or purpose (Section 174A)
c. All of the above
35. Any person discontinuing a business or profession shall give to the Assessing Officer notice of such
discontinuance
a. within 30 days of discontinuance b. 30 days prior of discontinuance
c. 15 days prior of discontinuance d. within 15 days of discontinuance
36. The ICDS X deals with provisions, contingent liabilities and contingent assets, except those
i. resulting from financial instruments
ii. resulting from executor contracts
iii. arising in insurance business from contracts with policyholders
iv. covered by another ICDS.

a. i, ii and iii b. ii, iii and iv

c. i, ii and iv d. All of the above
37. In terms of ICDS IX (Borrowing Cost) Funds specifically borrowed for acquisition, construction or production
of a qualifying asset, amount of borrowing costs to be capitalized on that asset shall be
a. the actual borrowing cost incurred during the period on the funds so borrowed.
b. borrowing cost incurred during the period less any income on the temporary investment of borrowed
amount.
c. borrowing cost incurred during the period plus any income on the temporary investment of borrowed
amount.
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 d. a. the actual borrowing cost incurred during the period on the funds so borrowed plus reserve created for
it.
38. Qualifying assets includes except
a. land, building, machinery, plant or furniture, being tangible assets
b. know-how, patents, copyrights, trade-marks, licenses, franchises or any other business or commercial
rights of similar nature, being intangible assets
c. inventories that require a period of twenty four months or more
d. None of the given
39. The ICDS that deals with sale of goods, rendering of services, the use by others of the person’s resources
yielding interest, royalties or dividends is
a. ICDS V b. ICDS IV
c. ICDS VII d. ICDS VI
40. Pick the correct one in terms of provisions given there in ICDS-VII
a. In respect of monetary items exchange differences arising on settlement or conversion at the last day of
the previous year shall be recognized as income or expense in that previous year
b. In respect of non-monetary items exchange difference at the last day of previous year shall not be
recognized as an income or expense.
c. Both A&B
d. None of the given
41. The expression ‘Profession’ has been defined in Section 2(36) of the Act to include any
a. Idea b. Vocation
c. Business d. All of the above
42. Plant includes
a. scientific apparatus and surgical equipment b. Warehouses for storage purposes
c. Cinema Theatres &. Hotel Building d. All of the above
43. If any asset, on which depreciation is claimed on basis of SLM, is sold and the amount by which money
payable together with scrap value, fall short of WDV of such asset, depreciation shall be allowed equal to such
deficiency in the year of sale. Such depreciation is called
a. Compensating Depreciation b. Recouping Depreciation
c. Matching Depreciation d. Terminal Depreciation
44. Under section 44AB, specified date means
a. 31st July of the AY b. 30th September of the AY
c. 30th November of the AY d. 31st December of the AY
45. Export incentives include
i. Profits on sale of a licence granted under the Imports (Control) Order, 1955, made under the Imports and
Exports (Control) Act, 1947;
ii. Cash assistance (by whatever name called) received or receivable by any person against exports under any
scheme of the Government of India;
iii. Any duty of customs or excise re-paid or re-payable as drawback to any person against exports under the
Customs and Central Excise Duties Drawback Rules, 1995,
iv. Any profit on transfer of the Duty Entitlement Pass Book Scheme, or any profit on the transfer of the Duty
Free Replenishment Certificate.

a. i, ii and iii b. ii, iii and iv

c. i, ii and iv d. All of the above
46. Dividend derived from the shares held as SIT is taxable under head
a. Capital Gain b. PGBP
c. Income from Other Sources d. Any of the given
47. M/s Ram Rahim has air pollutant equipment whose WDV as on 1.4.2018 was Rs. 490000. Equipment worth
Rs. 410000 was added to the block in November 2018. Further, equipment having original cost Rs. 150000 was sold
for Rs. 210000 in January 2019 .WDV of the block of assets for depreciation in PY 2018-19 is
a. Rs. 750000 b. Rs. 690000
c. Rs. 900000 d. Rs. 840000
48. If a new machinery is purchased on 15.4.2017 & put to use for the purpose of the business on 2.1.2019, depreciation
for PY 2017-18 would be allowable for the at the rate of
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 a. NIL b. 7.5%
c. 30% d. 15%
49. Lock in period for newly acquired assets u/s 32AC/32AD is
a. 3 years from the date of installation
b. 5 years from the date of installation
c. 3 years from the date of purchase
d. 5 years from the date of purchase
50. Pick the incorrect one regarding Amortisation of Preliminary Expenses u/s 35D
a. Indian companies and other non-corporate taxpayers resident in India would be entitled to amortisation
of certain preliminary expenses incurred by them at any time after 31.3.1970.
b. aggregate of amount Incurred five (5) years prior to commencement of business.
c. The amount qualifying for amortisation would be allowable as a deduction in five (5) equal instalments
beginning with the previous year in which the business of the assessee actually commences or the previous
year in which the extension of the present undertaking is completed or the new unit commences production
or operation, as the case may be.
d. None of the given
51. Income tax paid is
a. fully allowed as deduction
b. partially allowed as deduction
c. not allowed as deduction
d. Allowance of disallowance of deduction is at discretion of Assessing Officer
52. The minimum income that shall be presumed to be under section 44 ADA
a. aggregate of 6% and 8% for amount received digitally and cash respectively
b. 25% of gross receipt.
c. 40% of gross receipt.
d. 50% of gross receipt.
53. Advance tax is payable by the Assessee opting for presumptive income
a. before 15th March of PY
b. Before due date of fling the return of income
c. Before completion of preliminary assessment
d. Before the start of a PY
54. One of the employees of the organisation was terminated in the interest of business and was paid one time
compensation of ₹ 75,000. For the organisation such expenditure shall be considered as
a. Capital expenditure allowable for deduction
b. Capital expenditure not allowable for deduction
c. Revenue expenditure allowable for deduction
d. Revenue expenditure not allowable for deduction
55. A Business shall have to get its accounts of the PY audited if
a. Fees/Gross receipts exceeds₹ 50 lakh in PY
b. Fees/Gross receipts exceeds₹ 1 crore in PY
c. Fees/Gross receipts exceeds₹ 2 crore in PY
d. Fees/Gross receipts exceeds₹ 25 lakh in PY
56. Income from undisclosed sources are chargeable under the head
a. Salary b. Capital Gain
c. Income from Other Sources d. Any of the above.
57. Which of the following income are not chargeable under the head Income from other sources
a. Winning from lottery to an agent or trader out of its unsold stock of lottery tickets
b. Income of jockey of horse races.
c. Winning from a motor car rally
d. All of the above
58. Casual income is liable to TDS. However, the following incomes are not liable to TDS except
a. Winning from lottery up-to amount Rs. 2000
b. Winning from racing other than horse race
c. Winning from horse race up-to Rs. 5000

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 d. None of the given
59. No deduction is allowed in respect of any expenditure or allowance in computing the income by way of
winnings from lotteries crossword puzzles races (including horse races) card games and other games of any sort or
from gambling or betting of any form or nature whatsoever. The prohibition however will not apply in respect of
income of an assessee who is owner of horses maintained for running in horse races
a. True b. False.
60. Interest on compensation or enhanced compensation is
a. is fully allowed as deduction b. not an admissible deduction
c. sum equal to 50% is allowable as deduction d. sum equal to 90% is allowable as deduction
61. The Cost of Improvement in relation to a capital asset being goodwill of a business shall be taken to be
a. the incurred cost b. NIL
c. the incurred cost after indexation d. the cost incurred by the previous owner
62. Income from transfer of self-generated goodwill of a profession is chargeable to tax under the head ‘capital
gains’ @ 20% with indexation or @ 10% without indexation
a. True b. False
63. Any transfer of a capital assets is not regarded as transfer under following cases
a. under a gift b. under a will
c. to an irrevocable trust d. All of the above
64. The requisites of a charge to income-tax, of capital gains under Section 45(1) are EXCEPT
a. There must be a capital asset.
b. The capital asset must have been transferred and such transfer must have been effected in the PY.
c. There must be a gain arising on such transfer of a capital asset and such capital gain should not be exempt
under Sections 54
d. None of the given
65. In case of enhanced compensation, the cost of acquisition will be
a. NIL
b. Amount of enhanced compensation
c. Half of the amount of enhanced compensation
d. Proportionate of original compensation.
66. Assessee is allowed to opt for FMV on 1.4.2001 in case of
a. All Capital assets
b. All Depreciable capital assets
c. All Capital assets other than Intangible assets & Depreciable assets
d. only self-generated assets
67. Conversion of capital asset into SIT will result into capital gain of PY in which ____.
a. conversion took place b. converted asset is sold/transferred
c. either A or B as opted by the assessee d. either A or B as determined by the assessing officer
68. To be eligible for exemption from capital gain under Section 54, new residential building should be acquired
a. 1 year prior or within 2 year or construction with 3 years
b. 3 year prior or within 3 years
c. 2 year prior or within 3 year or construction with 3 years
d. 1 year prior or within 3 year or construction with 5 years
69. Investment in units of specified fund, as may be notified by Government to finance start-ups to avail
exemption from capital gain under Section
a. 54D b. 54GA
c. 54EC d. 54EE
70. For claiming benefit under Section 54 Capital assets must have been put to use for at-least
a. 2 years immediately prior to PY of acquisition
b. 2 years immediately prior to date of acquisition
c. 3 years immediately prior to PY of acquisition
d. 3 years immediately prior to date of acquisition
71. The residential status of an assessee is determined for the relevant
a. Previous Year b. Assessment Year
c. Financial Year d. Calendar Year
72. Which of the following is not an example of agricultural income
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 a. Salary of a farm manager
b. Profit accruing from the purchase of a standing crop and resale thereof after harvest;
c. Income from animal kingdom.
d. All of the above
73. Remuneration earned by a member of HUF for the services rendered by him/her is
a. taxable as income of the member b. exempt as income of the member
c. partially taxable and partially exempt d. both taxable and exempt depending upon each case.
74. Amount of compensation received for premature termination of contract of agency is
a. Capital receipt & taxable b. Capital receipt & not taxable
c. Revenue receipt & taxable d. Revenue receipt & not taxable
75. Profits of Rs. 5 lakh for PY 2017-18 of a business in Canada, which was not taxed earlier, remitted to India
during PY 2018-2019 would be taxable for
a. ROR and RNOR only b. RNOR and NR only
c. Taxable for all (ROR, RNOR and NR) d. Not taxable in India for all (ROR, NOR & NR)
76. Deemed income in respect of foreign company engaged in business of civil construction shall be
a. 5% Income due in India b. 7.5% Income due in India
c. 10% Income due in India d. 15% Income due in India
77. The total income of a trust before claiming exemption u/s 11 is Rs. 5.5 lakh It is eligible for exemption U/S 11
to the extent Rs. 3.2 lakh Such trust shall
a. no need to file a return of income
b. have to file a return of income
c. have to file a return of income for Rs. 5.5 lakh and shall have to claim a refund of Rs. 3.2 lakh
d. no need to file a return of income but an intimation to this shall be submitted.
78. A charitable trust received Rs. 2 lakh as corpus fund donation and Rs. 5 lakh as non-corpus fund donation
during the PY 2019-20. Rs. 50000 and Rs. 1.80 lakh have been applied out of corpus and non-corpus receipt
respectively. The amount deduction that shall be available to trust is
a. Rs. 7 lakh b. Rs. 5.95 lakh
c. Rs. 6.25 lakh d. Rs. 4.55 lakh
79. Under section 115BBC income-tax shall be payable @ 30% on the aggregate of anonymous donations
received in excess of the higher of the following
a. 5% of the total donations received by assessee or Rs. 1 lakh
b. 10% of the total donations received by assessee or Rs. 2 lakh
c. 20% of the total donations received by assessee or Rs. 3 lakh
d. 25% of the total donations received by assessee or Rs. 5 lakh
80. If advancement of any other object of general public utility involves any activity in the nature of trade,
commerce or business or any activity of rendering any service in relation to any trade, commerce for any fee shall
not considered as charitable purpose however this restriction shall be applicable only if total receipts from these
activities exceeds
a. 10% of the total receipts of the said trust during the PY
b. 20% of the total receipts of the said trust during the PY
c. 25% of the total receipts of the said trust during the PY
d. 50% of the total receipts of the said trust during the PY
81. Rates for charging Income Tax in certain cases, deduction from Head Salaries and computing Advance Tax
are enumerated in
a. Part I of First Schedule of Finance Act of a year
b. Part II of First Schedule of Finance Act of a year
c. Part III of First Schedule of Finance Act of a year
d. Part IV of First Schedule of Finance Act of a year
82. Where a non-resident company hires a ship from another non-resident and loads the ship with own goods in
India, neither the owner of the ship nor the lessee receives any amount on account of the carriage of the goods and
no tax is, therefore, leviable under Section 172(2)
a. True b. False
83. Person, who is not required to file any return of income but required to furnish return of Fringe Benefit Tax
(FBT), shall file the same in
a. ITR 6 b. ITR 5
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 c. ITR 7 d. ITR 8
84. Mr. Rahi who was born & brought up in India left for employment in Germany on 17th October, 2018. His
residential status for AY 2019- 2020 would be
a. ROR b. RNOR
c. NR d. Both Resident and Non-Resident for different period
85. In case of foreign companies having branches in India,
a. deduction in respect of head office expenditure is not allowed in computing their income
b. deduction in respect of head office expenditure is allowed in computing their income.
c. deduction in respect of half of the head office expenditure is allowed in computing their income.
d. deduction in respect of three-fourth of the head office expenditure is allowed in computing their income
86. Capital gain arises on
a. Immovable asset b. movable assets
c. Intangible assets d. All of the above
87. Mr. Mohan Sharma received Rs. 4 lakh on 15 March 2019 as an advance from Mr. Dilip Sinha for sale of
building for Rs. 50 lakh. Later on agreement was cancelled resulting forfeiture of advance money by Mr. Sharma.
Amount so forfeited will
a. be charged to income under the head income from Other Sources
b. be charged to income under the head Capital gain
a. reduce the cost of acquisition of building
b. enhance the cost of acquisition of building
88. Where the capital asset is converted into stock in trade, the indexation of cost of acquisition & cost of
improvement shall be done till
a. the PY in which conversion of capital assets into stock-in-trade took place
b. the PY in which such asset was sold
c. either A or B whichever is more beneficial to the assessee
d. either A or B whichever is more beneficial to the government
89. Pick the correct one
a. Cost of bonus shares shall be deemed to be Nil.
b. Cost of bonus share acquired up-to 31.03.1981 shall be Fair Market Value (FMV) on 1.4.1981
c. Both A&B
d. None of the given
90. Insurance Compensation on Damage/Destruction of Capital Asset due to Flood, Typhoon, Cyclone,
earthquake or other Natural Disaster, Riot or Civil Disturbance or Accidental Fire or Explosion or Enemy action or
action taken from combating enemy (whether or no war declared) shall be treated
a. Short-term Capital Gain in the PY of receipt.
b. Long-term Capital Gain in the PY of receipt.
c. Short- term or long term capital gain as the case may be depending upon period of holding.
d. Income from other Sources in the PY of receipt.
91. Which of the following expenditure on scientific research is not allowed as deduction?
a. Revenue expenses incurred during the previous year
b. Revenue expenses on payment of salary to employees engaged in scientific research and purchase of
material used in scientific research incurred during three years immediately preceding the commencement
of business
c. Capital expenditure incurred on scientific research during the year related to the business
d. Expenditure incurred on acquisition of land during the year for scientific research
92. Which out of the following is not a condition to be fulfilled for claiming expenditure under section 37(1)?
a. Such expenditure should not be covered under the specific sections i.e. sections 30 to 36
b. Expenditure should be of capital nature
c. Expenditure should not be of a personal nature
d. Expenditure should have been incurred wholly or exclusively for the purpose of the business or
profession.
93. Business loss of an amalgamating company shall be
a. carried forward and set off in the hands of amalgamated company unconditionally
b. carried forward and set off in the hands of amalgamated company subject to certain conditions

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 c. not be carried forward
d. allowed to be carried forward only by amalgamating company
94. M/s Gupta Transport has 4 light goods carriage vehicles on 1.4.2018. He acquires 5 more light good carriage
vehicles on 27.8.2018. Presumptive income u/s 44AE for AY 2019-20 will be
a. Rs. 660000 b. Rs. 622500
c. Rs. 810000 d. Rs. 585000
95. Pick the correct one
a. A person carrying specified profession will have to maintain books of account prescribed if gross receipts
exceeds Rs. 150000
b. Gross receipts should exceeds Rs. 150000 in all preceding three (3) years
c. both A&B
d. None of the given
96. Pick the correct one regarding specified documents
a. Specified documents include journal, if accounts are maintained on mercantile basis, Cash book and
ledger
b. Carbon copies of bill issued exceeding `25 and original bills or receipts received for exp. incurred
exceeding `50
c. These books are required to be kept and maintained for 6 years from end of relevant AY
d. All of the above
97. The allowable limit for deduction for Payment in cash for plying, hiring or leasing goods carriages is
a. Rs. 35000 b. Rs. 20000
c. Rs. 25000 d. Rs. 10000
98. Electricity companies are allowed depreciation on
a. Each asset separately unless the assessee opts for block of asset system in the first PY of its
commencement.
b. Either on block of asset or each asset separately provided the option is exercised in the first previous year.
c. Block of asset
d. Each asset separately
99. Rate of depreciation chargeable on temporary wooden structure in the nature of building is
a. 100% b. 60%
c. 40% d. 20%
100. Under Income Tax Act capital Receipt are
a. Taxable b. Exempt
c. Exempt in certain cases only d. Taxable in certain cases only

Pattern
Sl. No. Topics No. of Ques. Sl. No.
Ques
1 Basic 30 21-35 & 71-85
2 Profit and Gain from Business & Profession 25 41-55 & 91-100
3 Capital Gains 15 61-70 & 86-90
4 Incomes from Other Sources 5 56-60
5 Set-off and Carry Forward of Losses 5 1-5
6 International Taxation 10 11-20
7 ICDS 5 36-40
8 Special Provisions to Certain Companies 5 6-10
TOTAL 100

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)