Topic wise Test Papers of CA Inter - Direct Tax – MAY/SEP-25 Exams

Topic: PGBP

Total Marks: 50 Marks

Time Allowed: 70 minute

Questions:

Part-A Multiple Choice Questions

[Total 10 Marks – 2 Marks for each MCQ]
1. Mr. X acquires an asset in the year 2016-17 for the use for scientific research for ` 2,75,000. He claimed
deduction under section 35(1)(iv) in the previous year 2016-17. The asset was brought into use for the
business of Mr. X in the P.Y.2024-25, after the research was completed. The actual cost of the asset to
be included in the block of assets is -
(a) Nil
(b) Market value of the asset on the date of transfer to business
(c) ` 2,75,000 less notional depreciation under section 32 upto the date of transfer.
(d) Actual cost of the asset i.e., ` 2,75,000
2. The W.D.V. of a block (Plant and Machinery, rate of depreciation 15%) as on 1.4.2024 is ` 3,20,000. A
second hand machinery costing ` 50,000 was acquired on 1.9.2024 through account payee cheque but
put to use on 1.11.2024. During January 2025, part of this block was sold for ` 2,00,000. The depreciation
for A.Y.2025-26 would be -
(a) ` 21,750
(b) ` 25,500
(c) ` 21,125
(d) ` 12,750
3. An electricity company charging depreciation on straight line method on each asset separately, sells one
of its machinery in April, 2024 at ` 1,20,000. The WDV of the machinery at the beginning of the year
i.e., on 1st April, 2024 is ` 1,35,000. No new machinery was purchased during the year. The short fall
of ` 15,000 is treated as -
(a) Short-term capital loss
(b) Normal depreciation
(c) Terminal depreciation
(d) Any of the above, at the option of the assessee
4. Mr. X, a retailer, acquired furniture on 10th May 2024 for ` 10,000 in cash and on 15th May 2024, for ` 15,000 and
` 20,000 by a bearer cheque and account payee cheque, respectively. Depreciation allowable for A.Y. 2025-26
would be –
(a) ` 2,000
(b) ` 3,000

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2 Test Papers of CA Inter - Direct Tax - MAY/SEP-25 Exams — Questions
(c) ` 3,500
(d) ` 4,500
5. The turnover of Mr. Aarav, engaged in wholesale trading business, for the P.Y.2024-25 is ` 2 crore and
the gross receipts of Mr. Vishal, engaged in legal profession is ` 50 lakhs. Mr. Aarav has been regularly
following mercantile system of accounting and Mr. Vishal regularly follows cash basis of accounting.
Out of the turnover of Mr. Aarav, he receives ` 1.20 crores through ECS through bank account during
the P.Y. 2024-25. He receives another ` 60 lakhs through ECS through bank account on or before
31.7.2025. Mr. Vishal receives ` 30 lakhs by account payee bank draft and ` 20 lakhs by crossed cheque
during the P.Y.2024-25. What would be the income chargeable to tax under the head "Profits and Gains
of Business and Profession", if they want to minimize their tax liability? Both of them maintain books
of account as per section 44AA. Income computed as per the regular provisions of Income-tax Act, 1961
is ` 11,50,000 and ` 24,75,000 in the hands of Aarav and Vishal, respectively. However, they have not
got the books of account audited and do not intend to do so in future.
(a) ` 16,00,000 and ` 25,00,000, respectively
(b) ` 13,60,000 and ` 25,00,000, respectively
(c) ` 11,50,000 and ` 24,75,000, respectively
(d) ` 12,40,000 and ` 25,00,000, respectively

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 Test Papers of CA Inter - Direct Tax - MAY/SEP-25 Exams — Questions 3
Part-B Descriptive Questions
[Total 40 Marks]
1. Mr. Venus., engaged in manufacture of pesticides, furnishes the following particulars relating to
its manufacturing unit at Chennai, for the year ending 31-3-2025:
(` in lacs)
WDV of Plant and Machinery on 31.3.2024 30
Depreciation including additional depreciation for P.Y. 2023-24 4.75
New machinery purchased on 1-9-2024 10
New machinery purchased on 1-12-2024 8
Computer purchased on 3-1-2025 4
Additional information:
• All assets were purchased by A/c payee cheque.
• All assets were put to use immediately.
• New machinery purchased on 1-12-2024 and computer have been installed in the office.
• During the year ended 31-3-2024, a new machinery had been purchased on 31-10-2023, for
` 10 lacs. Additional depreciation, besides normal depreciation, had been claimed thereon.
• Depreciation rate for machinery may be taken as 15%.
Compute the depreciation available to the assessee as per the provisions of the Income-tax Act, 1961
and the WDV of different blocks of assets as on 31-3-2025. Assume that he does not opt for section
115BAC. [7 Marks]

2. Mr. Yogesh is in the business of operating goods vehicles. As on 1st April, 2024, he had the
following vehicles:
Vehicle Gross Vehicle Weight (in Date of Put to use during F.Y. 2023-24?
Kgs.) Purchase
A 9000 2-6-2023 Yes
B 15000 15-5-2023 Yes
C 12000 4-8-2023 No (as under repairs)
During P.Y. 2024-25, he purchased the following vehicles:
Vehicle Gross Vehicle Weight (in Kgs.) Date of Purchase Date on which put to use
D 11500 20-4-2024 10-5-2024
E 14000 15-5-2024 18-5-2024
Compute his income under section 44AE of the Income-tax Act, 1961 for A.Y. 2025-26. [7 Marks]

3. Dr. Arjun runs a clinic in Delhi. As per new rule in the city, private cars can be plied in the city
only on alternate days. He has purchased a car on 25-09-2024, for the purpose of his medical
profession, as per following details:

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4 Test Papers of CA Inter - Direct Tax - MAY/SEP-25 Exams — Questions

Cost of car (excluding GST) 15,00,000

Add: Delhi GST at 14% 2,10,000
Add: Central GST at 14% 2,10,000
Total price of car 19,20,000
He put his car to use from 25.9.2024 itself. He estimates the usage of the car for personal purposes
will be 25%. He is advised by his friends that since the car has run only on alternate days, half the
depreciation, which is otherwise allowable, will be actually allowed. He has started using the car
immediately after purchase.
Determine the depreciation allowable on car for the A.Y. 2025-26, if this is the only asset in the
block. If this car would also be used in the subsequent Assessment Year 2026-27 on the same terms
and conditions above, what will be the depreciation allowable? Assume that there is no change in
the legal position under the Income-tax Act, 1961. [6 Marks]

4. Ms. Purvi, aged 55 years, is a Chartered Accountant in practice. She maintains her accounts on
cash basis. Her Income and Expenditure account for the year ended March 31, 2025 reads as
follows:
Expenditure (`) Income (`) (`)
Salary to staff 15,50,000 Fees earned:
Stipend to articled 1,37,000 Audit 27,88,000
Assistants
Taxation services 15,40,300
Incentive to articled 13,000 Consultancy 12,70,000 55,98,300
Assistants
Dividend on shares of X 10,524
Ltd., an Indian company
(Gross)
Office rent 12,24,000 Income from UTI 7,600
(Gross)
Printing and Stationery 12,22,000 Honorarium received 15,800
from various institutions
for valuation of answer
papers
Meeting, seminar and 31,600 Rent received from 85,600
conference residential flat let out
Purchase of car (for official 80,000
use)
Repair, maintenance and 4,000
petrol of car
Travelling expenses 5,25,000
Municipal tax paid in 3,000

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 Test Papers of CA Inter - Direct Tax - MAY/SEP-25 Exams — Questions 5

Expenditure (`) Income (`) (`)

respect of house property
Net Profit 9,28,224
57,17,824 57,17,824
Other Information:
(i) Allowable rate of depreciation on motor car is 15%.
(ii) Value of benefits received from clients during the course of profession is ` 10,500.
(iii) Incentives to articled assistants represent amount paid to two articled assistants for passing CA
Inter Examination at first attempt.
(iv) Repairs and maintenance of car include ` 2,000 for the period from 1-10-2024 to 30-09-2025.
(v) Salary includes ` 30,000 to a computer specialist in cash for assisting Ms. Purvi in one professional
assignment.
(vi) The travelling expenses include expenditure incurred on foreign tour of ` 32,000 which was within
the RBI norms.
Compute the gross total income of Ms. Purvi for the assessment year 2025-26. [Ignore 115BAC]
[10 Marks]

5. From the following information provided by Mr. Suresh, aged 43 years and a wholesale dealer, for
the A.Y. 2025-26, you are required to compute gross total income.
Trading and Profit and Loss Account of Mr. Suresh
Particulars Amount in ` Particulars Amount in `
To Opening Stock 24,21,000 By Sales 2,62,50,100
To Purchases 2,06,00,500 By Closing stock 52,00,100
To Direct expenses 4,12,040
To Freight inward 2,65,000
To Gross Profit c/d 77,51,660
3,14,50,200 3,14,50,200
To Salaries and wages 17,15,000 By Gross Profit b/d 77,51,660
To General expenses 3,65,000 By dividend from Indian companies 17,20,000
(gross)
To Rates and taxes 2,40,000 By Interest received on FDs (Net of 1,08,000
tax) [FD made on 1.8.2024]
To Interest paid on late filing 3,845 By Rent received from House Property 7,20,000
of GST

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6 Test Papers of CA Inter - Direct Tax - MAY/SEP-25 Exams — Questions

Particulars Amount in ` Particulars Amount in `

To Income-tax paid for FY 3,45,000 By Income-tax Refund 19,000
2021-22
To Interest paid to NBFC 1,15,000
To Depreciation 1,82,000
To Net Profit 73,52,815
1,03,18,660 1,03,18,660
The following additional information is provided by him:
(a) Closing stock of previous year 2024-25 was undervalued by ` 55,000.
(b) Rates and taxes include ` 1,000 paid towards late filing of his Income-tax return for Assessment
Year 2024-25 under section 234F of income - tax Act.
(c) Salaries include ` 30,000 paid on single day by way of cash to his accountant.
(d) Interest paid on loan of ` 10,00,000 taken from a Non-Banking Finance company. Out of the loan,
amount of ` 2 lakhs were used for personal purpose and the balance was used for business purpose.
No TDS was deducted while paying the interest on loan.
(e) General expenses include Advertisement expense of ` 25,000 paid by cheque towards an
advertisement in a souvenir published by local political party.
(f) Income-tax refund includes ` 2,500 towards interest.
(g) Depreciation charged is as per Income-tax Rules is ` 2,20,000
(h) TDS has been deducted on interest received on FD.
(i) Turnover for the year ending 31.03.2024 was ` 2.58 crores. [10 Marks]

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