Test Paper – 1 CA Final [Document 8tle]

CA Final MAY/NOV-2024
Test Paper – 1
Topics: Tax rates, Capital Gain & IFOS
Part A: MulFple Choice QuesFons

Que. 1 2 Marks
Mr. Vishal and Mr. Guha sold their residential house property in Pune for ₹ 3 crore and ₹ 4 crore,
respectively, in January, 2024. The house property was purchased by them 25 months back. The
indexed cost of acquisition is ₹ 1 crore and ₹ 1.75 crore, respectively. Mr. Vishal purchased two
residential flats, one in Delhi and one in Agra for ₹ 70 lakhs and ₹ 80 lakhs, respectively, in April, 2024.
On the same date, Mr. Guha also purchased two residential flats, one in Mumbai and the other in
Pune, for ₹ 80 lakhs and ₹ 75 lakhs, respectively. Both of them invested ₹ 30 lakhs in bonds of NHAI
in March, 2024 and ₹ 30 lakhs in bonds of RECL in April, 2024. What is the income taxable under the
head “Capital Gains” for A.Y.2024-25 in the hands of Mr. Vishal and Mr. Guha?
(a) ₹ 70 lakhs and ₹ 95 lakhs, respectively (b) ₹ 60 lakhs and ₹ 85 lakhs, respectively
(c) Nil and ₹ 95 lakhs, respectively (d) Nil and ₹ 20 lakhs, respectively

Que. 2 8 Marks
Mr. Hari, a property dealer, sold a building in the course of his business to his friend Mr. Rajesh, who
is a dealer in automobile spare parts, for ₹ 100 lakh on 1.1.2024, when the stamp duty value was ₹
120 lakh. The agreement was, however, entered into on 1.9.2023 when the stamp duty value was ₹
110 lakh. Mr. Hari had received a down payment of ₹ 15 lakh by NEFT from Mr. Rajesh on the date
of agreement. Mr. Hari has purchased the building for ₹ 50 lakh on 12.7.2022.
Mr. Hari’s brother, Mr. Ravi, a retail trader, sold a residential house to Mr. Vallish, a wholesale trader
for ₹ 50 lakh on 1.2.2024, when the stamp duty value was ₹ 70 lakh. The agreement was, however,
entered into on 1.8.2023 when the stamp duty value was ₹ 55 lakh. Mr. Ravi had received a down
payment of ₹ 5 lakh by a crossed cheque from Mr. Vallish on the date of agreement. Mr. Ravi has
purchased the building for ₹ 32 lakh on 17.8.2022.
From the information given above, choose the most appropriate answer to the following questions
–
(i) What is the amount of income chargeable to tax in the hands of Mr. Hari in respect of the
transaction of sale of building to Mr. Rajesh and under which head is it taxable?
₹ 70 lakh is taxable as his business ₹ 60 lakh is taxable as his business
(a) (b)
income income
₹ 50 lakh is taxable as his business ₹ 50 lakh is taxable as short-term
(c) (d)
income capital gains
(ii) Is any amount taxable in the hands of Mr. Rajesh in respect of the above transaction? If so,
what is the amount and under which head is it taxable?
(a) No amount is taxable in the hands of Mr. Rajesh
(b) ₹ 20 lakh is taxable under the head “Income from Other Sources”
(c) ₹ 10 lakh is taxable under the head “Income from Other Sources”
(d) ₹ 10 lakh is taxable as his business income
(iii) What is the amount of income chargeable to tax in the hands of Mr. Ravi in respect of the
transaction of sale of residential house to Mr. Vallish and under which head is it taxable?
₹ 18 lakh is taxable as short-term ₹ 23 lakh is taxable as short-term
(a) (b)
capital gains capital gains
₹ 38 lakh is taxable as short-term ₹ 18 lakh is taxable as his business
(c) (d)
capital gains income
Test Paper – 1 CA Final [Document 8tle]

(iv) Is any amount taxable in the hands of Mr. Vallish in respect of the above transaction? If so,
what is the amount and under which head is it taxable?
(a) No amount is taxable in the hands of Mr. Vallish
(b) ₹ 20 lakh is taxable under the head “Income from Other Sources”
(c) ₹ 10 lakh is taxable under the head “Income from Other Sources”
(d) ₹ 10 lakh is taxable as his business income

Que. 3 2 Marks
Mr. Rajan purchased 300 shares in Vaigai Ltd. on 12.1.2017 at a cost of ₹ 2,500 per share. The Fair
Market Value (FMV) of the share as on 31.1.2018 is ₹ 1,800. Mr. Rajan sold all the shares of Vaigai
Ltd. on 15.7.2023 for ₹ 3,200. Mr. Rajan’s brother Mr. Ravi purchased 600 shares in Tapti Ltd. on
25.1.2017 at a cost of ₹ 1,900 per share. The FMV of the share as on 31.1.2018 is ₹ 2,400. Mr. Ravi
sold all the shares of Tapti Ltd. on 31.1.2024 for ₹ 1,700 per share. What is the chargeable capital
gains on sale of shares of Vaigai Ltd. and Tapti Ltd. in the hands of Mr. Rajan and Mr. Ravi,
respectively, for A.Y.2024-25, assuming that STT was paid at the time of acquisition and sale?
(a) Long-term capital gains of Mr. Rajan ₹ 2,10,000; Long-term capital loss of Mr. Ravi ₹ 4,20,000
(b) Long-term capital gains of Mr. Rajan ₹ 4,20,000; Long-term capital loss of Mr. Ravi ₹ 4,20,000
(c) Long-term capital gains of Mr. Rajan ₹ 4,20,000; Long-term capital loss of Mr. Ravi ₹ 1,20,000
(d) Long-term capital gains of Mr. Rajan ₹ 2,10,000; Long-term capital loss of Mr. Ravi ₹ 1,20,000

Que. 4 2 Marks
Mr. Ram, a resident individual aged 40 years, has total income of ₹ 4,15,00,000 for A.Y.2024-25 which
comprises of salary (computed) of ₹ 1,80,00,000, long-term capital gains of ₹ 60,00,000 u/s 112, long-
term capital gains of ₹ 45,00,000 u/s 112A, short-term capital gains of ₹ 1,00,00,000 u/s 111A,
dividend of ₹ 10,00,000 and interest income of ₹ 20,00,000. What would be his tax liability for
A.Y.2024-25, assuming that he does not opt for section 115BAC?
(a) ₹ 1,17,01,690 (b) ₹ 1,17,13,650
(c) ₹ 1,10,65,990 (d) ₹ 1,10,77,950

Que. 5 6 Marks
Delta Limited has three Units – Alpha, Beta and Gamma. It transferred its Unit Gamma to Epsilon
Limited by way of slump sale on 1st April, 2023. The Balance Sheet of Delta Limited as on that date
is given below:
Liabilities ₹ in lakhs Assets ₹ in lakhs
Paid up capital 2,550 Fixed Assets:
Reserves and Surplus 930 Unit Alpha 225
Liabilities: Unit Beta 225
Unit Alpha 60 Unit Gamma 825
Unit Beta 165 Other Assets:
Unit Gamma 135 Unit Alpha 780
Unit Beta 1,200
Unit Gamma 585
Total 3,840 Total 3,840
Additional information:
(i) Lump sum consideration on transfer of Unit Gamma is ₹ 1,320 lakhs.
(ii) Fixed assets of Unit Gamma include land which was purchased at ₹ 90 lakhs in March, 2022
and revalued at ₹ 135 lakhs as on March 31, 2023. The stamp duty value of land on that date
was ₹ 130 lakhs.
 Test Paper – 1 CA Final [Document 8tle]

(iii) Other fixed assets represent plant and machinery and furniture, which are reflected at ₹ 690
lakhs (i.e., ₹ 825 lakhs less value of land) which represents written down value of those assets
as per books. The written down value of these assets u/s 43(6) of the Income-tax Act, 1961 is
₹ 615 lakhs.
(iv) Other assets do not include jewellery, artistic work, shares and securities.
(v) Liabilities represent ascertained liabilities and does not include provision for taxation or
proposed dividend.
(vi) Unit Gamma was set up by Delta Limited in March, 2022.
(vii) Assume that the turnover of Delta Ltd. for F.Y. 2021-22 is ₹ 1295 lakhs and Delta Ltd. has not
opted for section 115BAA.
From the information given above, choose the most appropriate answer to the following questions
-
(i) For computing capital gains on slump sale of Unit Gamma, what would be the deemed cost
of acquisition and improvement for the purposes of section 48 and 49 and the resultant
capital gains?
₹ 1275 lakhs and ₹ 45 lakhs, ₹ 1230 lakhs and ₹ 40 lakhs,
(a) (b)
respectively respectively
₹ 1155 lakhs and ₹ 115 lakhs, ₹ 1155 lakhs and ₹ 165 lakhs,
(c) (d)
respectively respectively
(ii) What is the tax liability on capital gain arising on slump sale of Unit Gamma?
(a) ₹ 55,08,360 (b) ₹ 45,90,300
(c) ₹ 57,65,760 (d) ₹ 48,04,800
(iii) If Unit Gamma was set up on March, 2010 instead of March, 2022, and the sale consideration
is ₹ 3000 lakhs instead of ₹ 1320 lakhs, what would be the capital gains arising to Delta Ltd.
on slump sale and the resultant tax liability?
The CII of F.Y.2009-10 is 148 and F.Y.2023-24 is 348. Assume that there is no change in any
other information given in the case scenario.
₹ 650.98 lakhs and ₹ 135.40 lakhs, ₹ 650.98 lakhs and ₹ 181.10 lakhs,
(a) (b)
respectively respectively
₹ 1845 lakhs and ₹ 429.81 lakhs, ₹ 1845 lakhs and ₹ 410.62 lakhs,
(c) (d)
respectively respectively

Part B: DescripFve QuesFons

1. Mrs. Yuvika bought a vacant land for ` 80 lakhs in May 2004. Registration and other expenses
were 10% of the cost of land. She constructed a residential building on the said land for `
100 lakhs during the Cinancial year 2006-07.
She entered into an agreement for sale of the above said residential house with Mr. Johar
(not a relative) in April 2015. The sale consideration was Cixed at ` 700 lakhs and on 23-4-
2015, Mrs. Yuvika received ` 20 lakhs as advance in cash by executing an agreement.
However, due to failure on part of Mr. Johar, the said negotiation could not materialise and
hence, the said amount of advance was forfeited by Mrs. Yuvika.
Mrs. Yuvika, again entered into an agreement on 01.08.2023 for sale of this house at ` 810
lakhs. She received ` 80 lakhs as advance by RTGS. The stamp duty value on the date of
agreement was ` 890 lakhs. The sale deed was executed and registered on 14-1-2024 for the
agreed consideration. However, the State stamp valuation authority had revised the values,
hence, the value of property for stamp duty purposes was ` 900 lakhs. Mrs. Yuvika paid 1%
as brokerage on sale consideration received.
Subsequent to sale, Mrs. Yuvika made following investments:
 Test Paper – 1 CA Final [Document 8tle]

(i) Acquired two residential houses at Delhi for ` 130 lakhs and ` 50 lakhs on 31.1.2024
and 15.5.2024
(ii) Acquired a residential house at UK for ` 180 lakhs on 23.3.2024.
(iii) Subscribed to NHAI capital gains bond (approved under section 54EC) for ` 50 lakhs on
29-3-2024 and for ` 40 lakhs on 12-5-2024.
(iv) Compute the income chargeable under the head 'Capital Gains' of Mrs. Yuvika for
A.Y.2024-25. The choice of exemption must be in the manner most beneCicial to the
assessee.
Cost InClation Index: F.Y. 2004-05 – 113; F.Y. 2006-07 – 122; F.Y. 2023-24 - 348.
[10 Marks]

2. Mr. Roy owned a residential house in Noida. It was acquired on 09.09.2012 for ` 30,00,000.
He sold it for ` 1,57,00,000 on 07.01.2021.
Mr. Roy utilized the sale proceeds of the above property to acquire a residential house in
Panchkula for ` 2,05,00,000 on 20.07.2021. The said house property was sold on 31.10.2023
and he purchased another residential house at delhi for 2,57,00,000 on 02.03.24. The
property at Panchkula was sold for ` 3,25,00,000. Calculate capital gains chargeable to tax
for the assessment year 2021-22 and 2024-25. All working should form part of your answer.
[7 Marks]