Test Series: April, 2022

MOCK TEST PAPER 2

INTERMEDIATE COURSE
PAPER – 4: TAXATION
SECTION – A: INCOME TAX LAW
SOLUTIONS
Division A – Multiple Choice Questions
MCQ No. Sub-part Most Appropriate Answer MCQ No. Most Appropriate Answer
1. (i) (b) 2. (c)
(ii) (c) 3. (d)
(iii) (b) 4. (a)
(iv) (a) 5. (c)
(v) (c)

Division B – Descriptive Questions

1. Computation of total income of Mr. Neeraj for the A.Y.2022-23
Particulars ` `
Income from house property
Arrears of rent 1,35,000
(taxable under section 25A even if Mr. Neeraj is not the owner of the
house property in the P.Y.2021-22)
Less: Deduction@30% 40,500 94,500
Profits and gains of business or profession
Income from wholesale business
Net profit as per books 6,60,000
Add: Amount debited to P & L A/c, not allowable as deduction
- Depreciation as per books 34,000
- Disallowance of municipal taxes paid for the second half-year under
section 43B, since the same was paid after the due date of filing of
return of income (` 7,000/2) 3,500
- Disallowance under section 40A(3) in respect of salary paid in cash
since the same exceeds ` 10,000 22,000
- 20% of car expenses for personal use 8,000
7,27,500
Less: Depreciation allowable (Note 1) 1,96,800
5,30,700
Income from firm
Share of profit from the firm is exempt under section 10(2A) -
Interest on capital from partnership firm (Note 2) 1,20,000
Salary as working partner fully taxable 1,00,000 2,20,000 7,50,700

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 Income from other sources
Interest on bank fixed deposit (Gross) [`49,500 x 100/90] 55,000
Interest on saving bank account 13,300
Interest on income-tax refund 1,400 69,700
Gross total income 9,14,900
Less: Deduction under Chapter VIA (Note 3) 2,65,000
Total Income 6,49,900
Computation of tax liability of Mr. Neeraj for the A.Y.2022-23
Particulars `
Upto ` 3,00,000 Nil
` 3,00,001 – ` 5,00,000 [i.e., ` 2,00,000@5%] 10,000
` 5,00,001 – ` 6,49,900 [i.e., ` 1,49,900@20%] 29,980
39,980
Add: Health and Education cess@4% 1,599
Tax Liability 41,579
Tax payable (Rounded off) 41,580
Notes:
(1) Depreciation allowable under the Income-tax Rules, 1962
Opening WDV/ Rate Depreciation
Actual cost
Block 1 Computers 2,40,000 40% 96,000
Computer printer 1,50,000 40% 60,000
Block 2 Motor Car 6,80,000 15% 51,000 40,800
[50% of 15% is
allowable, since it is
put to use for less
than 180 days]
Less: 20% disallowance for personal use 10,200
1,96,800
(2) Only to the extent the interest is allowed as deduction in the hands of the firm, the same is
includible as business income in the hands of the partner. Since interest is paid in accordance
with partnership deed, maximum interest allowable as deduction in the hands of the firm is
12% p.a. Therefore, interest @12% p.a. amounting to ` 1,20,000 would be treated as the
business income of Mr. Neeraj.
(3) Deduction under Chapter VI-A
Particulars ` `
Under section 80C
LIP for independent son 60,000
PPF paid in wife’s name 70,000
1,30,000

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 Since the maximum deduction under section 80C is ` 1,50,000, the
entire sum of ` 1,30,000 would be allowed as deduction 1,30,000
Under section 80D
Health insurance premium taken for himself is fully allowable as 35,000
deduction, since he is a senior citizen
Under section 80G
Contribution towards PM National Relief Fund eligible for 100% 50,000
deduction without any qualifying limit
Under section 80TTB
Interest on deposits in case of senior citizen, restricted to 50,000
Total deduction 2,65,000
2 (a) Computation of tax liability of Ms. Kajal under section 115BAC for the A.Y.2022-23
` `
(A) Tax payable including surcharge on total income of
` 2,00,50,000
Upto `2,50,000 Nil
` 2,50,001 – ` 5,00,000 @5% 12,500
` 5,00,001 – ` 7,50,000 @10% 25,000
` 7,50,001 – ` 10,00,000 @15% 37,500
` 10,00,001 – ` 12,50,000 @20% 50,000
` 12,50,000 – ` 15,00,000 @25% 62,500
Above ` 15,00,000 @30% 55,65,000
57,52,500
Add: Surcharge @ 25% (since total income exceeds ` 2
crore but does not exceed ` 5 crore) 14,38,125 71,90,625
(B) Tax payable on total income of ` 2 crore [(` 12,500 plus
` 25,000 plus ` 37,500 plus ` 50,000 plus ` 62,500 plus 65,98,125
` 55,50,000) plus surcharge @15%]
(C) Excess tax payable (A)-(B) 5,92,500
(D) Marginal Relief (` 5,92,5000 – ` 50,000, being the 5,42,500
amount of income in excess of ` 2,00,00,000)
(E) Tax payable before cess (A – D) 66,48,125
Add: Health and education cess @4% 2,65,925
Tax payable 69,14,050
Alternative Presentation
Computation of tax liability of Ms. Kajal for the A.Y.2022-23
` `
(A) Tax payable including surcharge on total income of
` 2,00,50,000
Upto ` 2,50,000 Nil
` 2,50,001 – ` 5,00,000 @5% 12,500

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 ` 5,00,001 – ` 7,50,000 @10% 25,000
` 7,50,001 – ` 10,00,000 @15% 37,500
` 10,00,001 – ` 12,50,000 @20% 50,000
` 12,50,000 – ` 15,00,000 @25% 62,500
Above ` 15,00,000 @30% 55,65,000
57,52,500
Add: Surcharge @25% (since total income exceeds ` 2
crore but does not exceed ` 5 crore) 14,38,125 71,90,625
(B) Tax payable on total income of ` 2 crore [(` 12,500 65,98,125
plus ` 25,000 plus ` 37,500 plus ` 50,000 plus ` 62,500
plus ` 55,50,000) plus surcharge @15%]
(C) Total income less ` 2 crore 50,000
(D) Tax payable on total income of ` 2 crore plus excess of 66,48,125
total income over ` 2 crore (B + C)
(E) Tax payable: Lower of A and D 66,48,125
Add: Health and education cess @4% 2,65,925
Tax payable 69,14,050
(F) Marginal Relief (A -D) 5,42,500
(b) Mr. Krishna is a non-resident for the A.Y.2022-23, since he was not present in India at any time
during the previous year 2021-22 [Section 6(1)].
As per section 5(2), a non-resident is chargeable to tax in India only in respect of following
incomes:
(i) Income received or deemed to be received in India; and
(ii) Income accruing or arising or income deemed to accrue or arise in India.
Computation of Total Income of Mr. Krishna for A.Y. 2022-23
Particulars `
Salaries
Salary from Government of India 9,25,000
(Income chargeable under the head ‘Salaries’ payable by the Government to a
citizen of India for services rendered outside India is deemed to accrue or arise
in India under section 9(1)(iii). Hence, such income is taxable in the hands of
Mr. Krishna, a citizen of India, even though he is a non-resident and rendering
services outside India)
Foreign Allowance from Government of India
[Any allowances or perquisites paid or allowed as such outside India by the
Government to a citizen of India for rendering service outside India is exempt
under section 10(7)]. Nil
Gross Salary 9,25,000
Less: Standard Deduction under section 16(ia) of ` 50,000, being lower of
gross salary or ` 50,000 50,000
8,75,000

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 Income from House Property
Rent from a house situated at UK, received in UK Nil
(Income from property situated outside India would not be taxable in India in the
hands of a non-resident, since it neither accrues or arises in India nor is it
deemed to accrue or arise in India nor is it received in India)
Income from Other Sources
Interest on Post office savings bank account – exempt upto ` 3,500 1,000
Gross Total Income 8,76,000
Less: Deduction under section 80TTA 1,000
Total Income 8,75,000
(c) Mr. Rakesh has furnished his return of income for A.Y.2022-23 on 22.10.2022, i.e., after the due
date specified under section 139(1) i.e., 31st July 2022. Hence, the return is a belated return
under section 139(4).
As per section 80 read with section 139(3), specified losses, which have not been determined in
pursuance of a return of loss filed within the time specified in section 139(1), cannot be carried
forward to the subsequent year for set-off against income of that year. The specified losses
include, inter alia, business loss but does not include loss from house property and unabsorbed
depreciation.
Accordingly, business loss of ` 10,80,000 of Mr. Rakesh for A.Y. 2022-23, not determined in
pursuance of a return of loss, filed within the time specified in section 139(1), cannot be carried
forward to A.Y.2023-24.
However, the loss of ` 2,50,000 from house property and unabsorbed depreciation of ` 2,00,000
pertaining to A.Y.2022-23, can be carried forward to A.Y.2023-24 for set-off, even though Mr.
Rakesh has filed the return of loss for A.Y.2022-23 belatedly.
(d) (i) ABC Bank is not required to deduct tax at source under section 194A, since the aggregate
interest on fixed deposit with the two branches of the bank ` 49,000 does not exceed the
threshold limit of ` 50,000, applicable in case of senior citizen. Since ABC Bank has
adopted core banking solution (CBS), the aggregate interest paid by both branches has to
be considered.
(ii) TDS provisions under section 194C are not attracted in this case, since Mr. Avinash is a
pensioner. However, Mr. Avinash has to deduct tax at source@5% u/s 194M, since the
payment to contractor, Mr. Raju, exceeds ` 50 lakhs.
3. (a) Computation of taxable income of Mr. Sailesh for A.Y. 2022-23
Particulars Amount Amount
Income from house property
Unit - 1 [50% of floor area - Let out]
Gross Annual Value, higher of
- Expected rent ` 1,39,000 [Higher of Municipal Value of
` 1,44,000 p.a. and Fair Rent of ` 1,49,000 p.a., but
restricted to Standard Rent of ` 1,39,000 p.a.]
- Actual rent ` 1,80,000 i.e., [` 20,000 x 10] less unrealized
rent of January, 2022 ` 20,000
Gross Annual Value 1,80,000
Less: Municipal taxes [50% of `30,000] 15,000

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 Net Annual Value 1,65,000
Less: Deductions from Net Annual Value
(a) 30% of Net Annual Value 49,500
(b) Interest on loan [50% of ` 90,000] 45,000 70,500
Unit – 3 [25% of floor area – Self occupied]
Net Annual Value -
Less: Interest on loan [ Not allowed as Mr. Sailesh is opting for - -
section 115BAC.]
Income from house property 70,500
Profits and gains from business or profession
Business Income [without deducting expenditure of Unit - 2 25% 2,40,000
floor area used for business purposes]
Less: Expenditure in respect of Unit -2
- Municipal taxes [25% of ` 30,000] 7,500
- Repairs [25% of ` 7,000] 1,750
- Interest on loan [25% of ` 90,000] 22,500
- Ground rent [ 25% of ` 6,000] 1,500
- Fire Insurance premium [25% of ` 60,000] 15,000 48,250 1,91,750
Taxable Income 2,62,250
Note: Alternatively, if as per income-tax returns, unrealised rent is deducted from GAV, then GAV
would be ` 2,00,000, being higher of unexpected rent of ` 1,39,000 and actual rent of
` 2,00,000. Thereafter, unrealized rent of ` 20,000 and municipal taxes of ` 15,000 would be
deducted from GAV of ` 2,00,000 to arrive at the NAV of ` 1,65,000
(b)
I Tax consequences in the hands of Mr. Ramesh
As per section 43CA, where the consideration received or accruing is less than the
stamp duty value of an asset (other than capital asset), being land or building or both
and such stamp duty value exceeds 110% of the consideration received or accruing,
then the stamp duty value shall be deemed to be the full value of the consideration.
However, where the date of agreement is different from the date of registration, stamp
duty value on the date of agreement can be considered provided whole or part of the
considered is received by way of account payee cheque/ bank draft/ ECS or through
any other prescribed modes on or before the date of agreement.
Further, in case of transfer of an asset, being a residential unit, if the stamp duty value
of the residential unit does not exceed 120% of the consideration received or accruing,
then, such consideration shall be deemed to be the full value of consideration for the
purpose of computing profits and gains from transfer of such asset, subject to the
satisfaction of following conditions –
(i) The transfer of residential unit takes place during the period between 12.11.2020
and 30.6.2021
(ii) Such transfer is by way of first time allotment of the residential unit to any person
(iii) The consideration received or accruing as a result of such transfer ≤ ` 2 crores
Accordingly, in this case, since ` 25 lakhs is received by cash on the date of
agreement, stamp duty value on the date of registration is to be considered. Since such
stamp duty value (` 1.75 crores) does not exceed 120% of the consideration received

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 (` 1.50 crores), business income would be computed in the hands of Mr. Ramesh, for
A.Y.2022-23, taking sale consideration of ` 1,50,00,000 as the full value of
consideration arising on transfer.
II Tax consequences in the hands of Mr. Vikas
In case, immovable property is received for inadequate consideration, the difference
between the stamp duty value and actual consideration would be taxable under section
56(2)(x) in the hands of the recipient, if such difference exceeds the higher of
` 50,000 or 10% of actual sales consideration.
However, in case the property is a residential unit and conditions of section 43CA are
satisfied, the difference would be taxable if such difference exceeds the higher of
` 50,000 or 20% of actual sales consideration.
In this case, no income would be taxable in the hands of Mr. Vikas under the head
“Income from Other Sources” in A.Y.2022-23 since the difference of `25,00,000 does
not exceed `30,00,000, being the higher of `50,000 and 20% of consideration.
4. (a) Computation of Total Income of Mr. Sonu for A.Y. 2022-23
Particulars Amount Amount
(`) (`)
Income from house property
House 1 [Self-occupied]
Net annual value -
Less: Interest on loan [upto `2,00,000] 2,00,000 (2,00,000)
House 2 [Let out]
Gross annual value 1 [`50,000 x 12] 6,00,000
Less: Municipal taxes -
Net annual value 6,00,000
Less: Deductions from Net Annual Value
(a) 30% of Net Annual Value 1,80,000
(b) Interest on loan 3,00,000 1,20,000
House in Delhi [Since Mr. Sonu receives direct or indirect
benefit from income arising to his brother’s daughter,
Ms. Varsha, from the transfer of house to her without
consideration, such income is to be included in the total income
of Mr. Sonu as per proviso to section 62(1), even though the
transfer may not be revocable during lifetime of Ms. Varsha]
Gross Annual Value2 6,50,000
Less: Municipal taxes -
Net Annual Value 6,50,000
Less: Deductions from Net Annual Value
(a) 30% of Net Annual Value 1,95,000
(b) Interest on loan - 4,55,000
3,75,000
Profits and gains from business or profession
Share of profit from firm [Exempt u/s 10(2A)] -
Exempt income cannot be clubbed

1 Rent receivable has been taken as the gross annual value in the absence of other information
2 Rent receivable has been taken as the gross annual value in the absence of other information
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 Capital Gains
Long term capital gain from sale of property 15,000
Less: Short-term capital loss can be set-off against both short- 15,000 -
term capital gains and long-term capital gains 3. Short term
capital loss of ` 16,000 set off against long-term capital gains to
the extent of `15,0004. Balance short term capital loss of ` 1,000
to be carry forward to A.Y.2023-24
Income from other sources
Dividend on preference shares [Taxable in the hands of 10,00,000
Mr. Sonu as per section 60, since he transferred the income, i.e.,
dividend, without transferring the asset, i.e., preference shares]
Interest from saving bank account 2,00,000
Cash gift [Taxable as per section 56(2)(x), since sum of money 75,000
exceeding ` 50,000 is received from his niece, who is not a
relative]
Income from betting [No loss is allowed to be set off against 34,000
such income]
Income from card games [No loss is allowed to be set off against 46,000 13,55,000
such income]
Gross Total Income 17,30,000
Less: Deduction under Chapter VI-A
Deduction under section 80C [Principal repayment of loan 1,50,000
` 5 lakh, restricted to `1,50,000]
Deduction under section 80TTA [Interest from savings
bank account] 10,000 1,60,000
Total Income 15,70,000
Losses to be carried forward to A.Y. 2023-24
Particulars Amount (`)
Short term capital loss [` 16,000 – ` 15,000] 1,000
Loss on maintenance of race horses [Loss incurred on maintenance of race 14,600
horses cannot be set-off against income from any source other than the
activity of owning and maintaining race horses. Hence, such loss has to be
carried forward to A.Y.2023-24]
(b) If a person, who has been allotted PAN as on 1.7.2017 and is required to intimate his Aadhar
number under section 139AA(2), has failed to intimate the same on or before 31.3.2022, the PAN
of such person would become inoperative immediately after 31.3.2022 for the purpose of
furnishing, intimating or quoting under the Income-tax Act, 1961.
Where a person, whose PAN has become inoperative, is required to furnish, intimate or quote his
PAN under the Act, it shall be deemed that he has not furnished, intimated or quoted the PAN, as
the case may be, in accordance with the provisions of the Act and he would be liable for all the
consequences under the Act for not furnishing, intimating or quoting the PAN.
Where a person, who is required to intimate his Aadhar Number under section 139AA(2), fails to
do so on or before the notified date i.e., 31.3.2022, he shall be liable to pay such fee, as may be
prescribed, at the time of making intimation under section 139AA(2) after 31.3.2022.
However, such fee shall not exceed ` 1,000.

3
as per section 74(1)
4
as per section 74(1)
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 SECTION B - INDIRECT TAXES (40 MARKS)
SUGGESTED ANSWERS
Division A - Multiple Choice Questions
Question Answer
No.
1.1 (b) Professional service availed from his son free of cost is considered as a deemed
supply
1.2 (a) ` 20 lakh
1.3 (d) Nil as it is exempt
1.4 (b) Mr. Lala is liable to register in the month of January for effecting inter-State outward
supply of goods.
1.5 (a) 4th January
2 (c) No, as services in the course of employment does not constitute supply and
therefore, aggregate turnover is less than ` 20 lakh.

Division B - Descriptive Questions

1. Computation of value of taxable supply and net GST liability to be
paid in cash by AIM for April, 2021
Particulars Amount (`)
Tuition fee received from students pursuing recognized management courses Nil
[Note-1]
Tuition fee received from students pursuing under-graduate courses recognized by 8,50,000
Foreign University [Note-2]
Fee received from students of Competitive Exam Training Academy [Note-3] 5,40,000
Mess fees received from students [Note-4] Nil
Total value of taxable supply 13,90,000
Particulars CGST (`) SGST (`)
GST liability under forward charge @ 9% [Note-5] 1,25,100 1,25,100
Services on which tax is payable under reverse charge:
Rent paid to Local Municipal Corporation [Note-6] 4,500 4,500
Legal services received from Top Care & Co., a partnership firm of 1,800 1,800
advocates [Note-7]
GST liability under reverse charge payable in cash [A] [Note-8] 6,300 6,300
Output tax payable against which ITC can be set off 1,25,100 1,25,100
Less: ITC of renting immovable property and legal services 6,300 6,300
Output tax payable after set off of ITC [B] 1,18,800 1,18,800
Net GST liability payable in cash [A] + [B] 1,25,100 1,25,100
Notes:-
1. Services provided by an educational institution to its students are exempt. Further, educational
institution means inter alia an institution providing services by way of education as a part of a
curriculum for obtaining a qualification recognised by an Indian law. Therefore, tuition fee

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 received by Punjab University, being an educational institution, is exempt, since it provides
qualification recognised by Indian law.
2. Tuition fee received by Stan University is taxable since Stan University is not an edu cational
institution as qualification provided by it is not recognised by Indian law.
3. Fee received from students of competitive exam training academy is taxable as Department of
AIM is not an educational institution since competitive exam training does not lead to grant of a
recognized qualification.
4. Catering services provided by educational institutions to its students are exempt.
5. Since all the services provided are intra-State, CGST and SGST @ 9% is charged
6. GST is payable under reverse charge in case of renting of immovable property services supplied
by a local authority to a registered person.
7. GST is payable under reverse charge in case of legal services supplied by a firm of advocates to
a business entity.
8. The amount available in the electronic credit ledger may be used for making payment towards
output tax. However, tax payable under reverse charge is not an output tax. Therefore, tax
payable under reverse charge cannot be set off against the input tax credit and thus, will have to
be paid in cash.
2. (a) Computation of value of taxable supply of M/s. Paisa Saver Bank Limited for the month of
September:
Particulars Amount in
lakh (`)
Housing loan extended to customers Nil
[Since money does not constitute goods, extending housing loan is not a
supply.]
Processing fee collected on sanction of loan 20
[Interest does not include processing fee on sanction of the loan. Hence, the
same is taxable.]
Commission collected on bank guarantee 30
[Any commission collected over and above interest on loan, advance or
deposit are not exempt.]
Interest income on credit card issued by the bank 40
[Services by way of extending loans in so far as the consideration is
represented by way of interest are exempt from tax. However, interest involved
in credit card services is specifically excluded from this exemption entry.]
Interest received on housing loan Nil
[Services by way of extending loans in so far as the consideration is
represented by way of interest are exempt from tax.]
Minimum balance charges collected from current account and saving account 03
holder
[Any charges collected over and above interest on loan, advance or deposit
are not exempt.]
Value of taxable supply 93

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 (b) Computation of total value of taxable supplies made by Blue Stone Ltd. during the month
of March
Particulars Amount (`)
List price of the goods 12,00,000
Subsidy amounting to ` 1,75,000 received from the Central Government NIL
[Since the subsidy is received from the Government, the same is not
includible in the value in terms of section 15(2)(e) of the CGST Act]
Subsidy received from NGO 50,000
[Since the subsidy is received from a non-Government body and directly
linked to the supply, the same is includible in the value in terms of section
15(2)(e) of the CGST Act]
Tax levied by the Municipal Authority 20,000
[Includible in the value as per section 15(2)(a) of the CGST Act]
Packing charges 15,000
[Being incidental expenses, the same are includible in the value as per
section 15(2)(c) of the CGST Act]
Late fees paid by recipient of supply for delayed payment 5,085
[Includible in the value as per section 15(2)(d) of the CGST Act - As the
amount of interest received is a lump sum amount, the same has to be
taken as inclusive of GST] [` 6,000 x 100/118] rounded off
Total value of taxable supplies 12,90,085
3. (a) (1) The debit/credit note shall be issued by the registered person who has supplied the goods
and/or services, i.e. Namo & Co.
(2) Yes, debit/credit note need to be issued in each of the circumstances as under:
(i) A credit note is required to be issued as the taxable value in invoice no. 1 exceeds the
actual taxable value.
(ii) A debit note is required to be issued as the tax charged in the invoice no. 4 is less than
the actual tax payable.
(iii) A debit note is required to be issued as the value of supply charged in the invoice no. 8
is less than the actual value.
(3) The details of the credit note cannot be declared later than the return for the month of
September following the end of the financial year in which such supply was made or the
date of furnishing of the relevant annual return, whichever is earlier.
(b) Interest is payable under Section 50 of the CGST Act, 2017 in case of delayed payment of tax
@ 18% per annum from the date following the due date of payment to the actual date of payment
of tax.
As per proviso to sub-section (1) of Section 50, interest is payable on the net tax liability paid in
cash, only if the return to be filed for a tax period under Section 39, has been filed after the due
date to furnish such return.
In the above scenario, Raghav Ltd., has defaulted in making the payment for ` 40,000 on self-
assessment basis in the return for the month of July, 2021. Accordingly, interest is payable on
the gross liability and proviso of sub-section 50(1) shall not be applicable.
Thus, the amount of interest payable by Raghav Ltd., is as under:-
Period of delay = 21 st August, 2021 to 20 th October, 2021 = 60 days
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 Hence, amount of interest = ` 40,000 x 18% x 60/365 = ` 1,184
Alternatively, if Raghav Ltd., have filed the return for the month of July, 2021 on 20.10.2021,
beyond the stipulated due date of 20.08.2021 and if the self-assessed tax for July, 2021 has
been paid on 20.10.2021, Interest under proviso to Section 50(1) shall be payable on the ta x paid
through Electronic Cash Ledger only.
Hence Interest is payable from 21 st August 2021 till 20 th October 2021 = 60 days
Amount of Interest = ` 30,000 x 18% x 60/365 = ` 888
4. (a) In case of supply of capital goods or plant and machinery on which ITC has been taken, the
registered person shall pay an amount equal to the ITC taken on the said capital goods or plant
and machinery reduced by 5% per quarter or part thereof from the date of invoice or the tax on
the transaction value of such capital goods, whichever is higher.
However, in case of refractory bricks, moulds and dies, jigs and fixtures when these are supplied
as scrap, the person can pay tax on the transaction value.
(b) Yes, as per section 29(5) of the CGST Act, 2017, every registered person whose registration is
cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash
ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained
in semi-finished or finished goods held in stock or capital goods or plant and machinery on the
day immediately preceding the date of such cancellation or the output tax payable on such
goods, whichever is higher.

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