Mock Test Paper - Series I: November, 2024

Date of Paper: 18th November, 2024

Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP - I

PAPER – 1 : ADVANCED ACCOUNTING
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks)
Part I is compulsory.
Case Scenario
1. Fly Ltd. made a sale of INR 7,00,000 to Wings International in May 2023 and
recognised Trade Receivables which was initially recorded at the prevailing
exchange rate on the date of sales, transaction recorded at US$ 1= ` 79.4. The
Company also took a loan from U.S Company for ` 10,00000 in December 2023
which was initially recorded at the prevailing exchange rate on the date of
transaction, transaction recorded at US$ 1= ` 81.1.
On 31st March 2024, exchange rate was US$ 1 = ` 83.3
a. What will be the closing balance of Trade Receivables on 31st March 2024:
(i) ` 700,000
(ii) ` 7,14,978 approx
(iii) ` 7,34,383 approx
(iv) ` 7,50,000 approx
b. How much is the reporting difference (gain or loss) in case of Trade
Receivable:
(i) Gain of ` 34,383 approx
(ii) Loss of ` 34,383 approx
(iii) Gain of ` 19,395 approx
(iv) Loss of ` 19,395 approx
c. What will be the closing balance of Loan as on 31st March 2024:
(i) ` 10,00,000
(ii) ` 10,27,127 approx
(iii) ` 9,79,002 approx
(iv) ` 10,79,002 approx
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 d. How much is the reporting difference (gain or loss) in case of Loan:
(i) Gain of ` 48,087 approx
(ii) Loss of ` 48,087 approx
(iii) Gain of ` 27,127 approx
(iv) Loss of ` 27,127 approx
Multiple Choice Questions [4 MCQs of 2 Marks each: Total 8 Marks]
2. X Ltd. purchased 3,000 shares of Amazing Ltd. in December 2023 @ ` 100
each and paid brokerage @ 1%. In May 2024, Amazing Ltd. issued bonus shares
at one for every three shares held by shareholders.
X Ltd. sold 1000 shares in September 2024 at ` 110 each. After issue of bonus,
shares were quoted at ` 95. In December 2024, the shares were quoted at `
70.
a. What would be the carrying cost of investments in Amazing Ltd. after sale
of shares as per AS 13:
(i) ` 3,03,000
(ii) ` 2,27,250
(iii) ` 3,00,000
(iv) ` 3,30,000
d. What is the cost of bonus shares:
(i) ` 1,00,000
(ii) ` 1,10,000
(iii) Nil
(iv) ` 1,01,000
c. What is the profit on sale of Bonus Shares:
(i) ` 100,000
(ii) ` 75,750
(iii) ` 34,250
(iv) ` 1,01,000
d. What would be the carrying cost of investments in Amazing Ltd. in
quarter ending in December 2024 as per AS 13:
(i) ` 2,10,000
(ii) ` 2,27,250
(iii) ` 2,20,000
(iv) ` 3,00,000
Multiple Choice Questions [4 MCQs of 2 Marks each: Total 8 Marks]

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3. Sun Limited has acquired 40% share in Moon Ltd. for ` 500,000 on 01.07.2023.
Moon Ltd. is holding 40% stake in Star Limited. Now, sun limited can exercise
significant influence on Moon Limited. Moon limited declared dividend of `
80,000 for the Financial Year 2022-23 on 15.09.2023. For the year 2023-24,
Moon Ltd. earned profit of ` 4,00,000 and declared dividend for ` 90,000 on
15.09.2024.
a. With respect to relationship between Companies, it can be said that:
(i) Star Ltd. is associate of Sun Ltd.
(ii) Moon Ltd. and Star Ltd. both are associates of Sun Ltd.
(iii) Moon Ltd. is an associate of Sun Ltd.
(iv) Sun Ltd. is Parent of both Moon Ltd. and Star Ltd.
b. What will be the carrying amount of investment in Separate Financial
Statements of Sun Limited as on 31.03.2024?
(i) ` 5,00,000
(ii) ` 5,80,000
(iii) ` 4,68,000
(iv) ` 5,32,000
c. What will be the carrying amount of investment in Consolidated Financial
Statements of Sun Limited as on 31.03.2024?
(i) ` 9,00,000
(ii) ` 5,88,000
(iii) ` 4,52,000
(iv) ` 6,20,000
d. As per AS 23, the existence of significant influence by an investor is
usually evidenced in one or more of the following ways:
(a) participation in policy making processes
(b) interchange of managerial personnel
(c) right to receive dividend
(d) provision of essential technical information
(i) All the statements are correct
(ii) Statements (a), (b) and (c) are correct
(iii) Statements (b), (c) and (d) are correct
(iv) Statements (a), (b) and (d) are correct

Multiple Choice Questions [4 MCQs of 2 Marks each: Total 8 Marks]

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4. Cost of current investment acquired was ` 1000 but the fair value was ` 800.
The Investment was recorded at ` 800. Now the fair value of Investment is Rs
1200. At what value should it be recorded and how much gain will be credited
to profit and loss account.
(i) No change is required and it will continue at ` 800
(ii) Current investment will be recorded at ` 1000 and gain of ` 200 will be
credited to profit and loss account.
(iii) Current investment will be recorded at ` 1200 and gain of ` 400 will be
credited to profit and loss account.
(iv) Current investment will be recorded at ` 1200 but no gain will be
credited to profit and loss account. (2 Marks)
5. As per AS 20 an enterprise should present/disclose the following:
(a) the amounts used as the numerators in calculating basic and diluted
earnings per share, and a reconciliation of those amounts to the net profit
or loss for the period.
(b) the weighted average number of equity shares used as the denominator
in calculating basic and diluted earnings per share, and a reconciliation
of these denominators to each other.
(c) basic and diluted earnings per share, even if the amounts disclosed are
negative (a loss per share).
(d) the nominal value of shares along with the earnings per share figures.
(i) All the statements are correct
(ii Statements (a), (b) and (c) are correct
(iii) Statements (b), (c and (d) are correct
(iv) Statements (a), (b and (c) are correct (2 Marks)
6. Accounting Standard 10, Property, Plant and Equipment is applicable to:
(i) Biological Assets (other than Bearer Plants) related to agricultural activity
(ii) Wasting Assets including Mineral rights, Expenditure on the exploration
for and extraction of minerals, oil, natural gas and similar non
regenerative resources
(iii) Inventories
(iv) Bearer Plant (except produce on Bearer Plants) (2 Marks)

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 PART II – Descriptive Questions (70 Marks)
Question No.1 is compulsory
Answer any four questions from the remaining five questions.
Wherever necessary, suitable assumptions may be made and indicated in
answer by the candidates. Working Notes should form part of the answer.

1. (a) A Ltd. provides after sales warranty for two years to its customers. Based
on past experience, the company has the following policy for making
provision for warranties on the invoice amount, on the remaining balance
warranty period.
Less than 1 year: 2% provision
More than 1 year: 3% provision
The company has raised invoices as under :
Invoice Date Amount (`)
11th Feb, 2022 60,000
25th Dec, 2022 40,000
04th Oct, 2023 1,35,000
Calculate the provision to be made for warranty under AS-29 as at
31st March, 2023 and 31st March, 2024. Also compute amount to be
debited to P & L account for the year ended 31st March, 2024.
(b) As per provisions of AS-26, how would you deal to the following
situations:
(1) ` 23,00,000 paid by a manufacturing company to the legal advisor
for defending the patent of a product is treated as a capital
expenditure.
(2) During the year 2023-24, a company spent ` 7,00,000 for publicity
and research expenses on one of its new consumer products which
was marketed in the same accounting year but proved to be a
failure.
(3) A company spent ` 25,00,000 in the past three years to develop a
product, these expenses were charged to profit and loss account
since they did not meet AS-26 criteria for capitalization. In the
current year approval of the concerned authority has been received.
The company wishes to capitalize ` 25,00,000 by disclosing it as a
prior period item.
(4) A company with a turnover of ` 200 crores and an annual
advertising budget of ` 50,00,000 had taken up for the marketing
of a new product by a company. It was estimated that the company
would have a turnover of ` 20 crore from the new product. The
company had debited to its Profit & Loss Account the total

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 expenditure of ` 50,00,000 incurred on extensive special initial
advertisement campaign for the new product.
(c) Indicate in each case whether revenue can be recognized and when it will
be recognized as per AS-9.
(1) Trade discount and volume rebate received.
(2) Where goods are sold to distributors or others for resale.
(3) Where seller concurrently agrees to repurchase the same goods at
a later date.
(4) Insurance agency commission for rendering services.
(5) On 11-03-2024 cloths worth ` 50,000 were sold to X mart, but due
to refurbishing of their showroom being underway, on their request,
clothes were delivered on 12-04-2024. (4 + 5 + 5 = 14 Marks)
2. The following is the Trial Balance of MN Limited as on 31.3.2024:
(Figures in ` ‘000)
Debit Credit
Land at cost 220 Equity Capital (Shares of ` 10 300
each)
Plant & Machinery at cost 770 10% Debentures 200
Trade Receivables 96 General Reserve 130
Inventories (31.3.24) 86 Profit & Loss A/c 72
Bank 20 Securities Premium 40
Adjusted Purchases 320 Sales 700
Factory Expenses 60 Trade Payables 52
Administration Expenses 30 Provision for Depreciation 172
Selling Expenses 30 Suspense Account 4
Debenture Interest 20
Interim Dividend Paid 18
1670 1670
Additional Information:
(i) The authorised share capital of the company is 40,000 shares of ` 10
each.
(ii) The company on the advice of independent valuer wish to revalue the
land at ` 3,60,000.
(iii) Declared final dividend @ 10% on 2nd April, 2024.
(iv) Suspense account of ` 4,000 represents cash received for the sale of some
of the machinery on 1.4.2024. The cost of the machinery was
` 10,000 and the accumulated depreciation thereon being ` 8,000.

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 (v) Depreciation is to be provided on plant and machinery at 10% on cost.
You are required to prepare MN Limited’s Balance Sheet as on 31.3.2024 and
Statement of Profit and Loss with notes to accounts for the year ended
31.3.2024 as per Schedule III. Ignore previous years’ figures & taxation.
(14 marks)
3. (a) Following information is supplied by K Ltd.:
Number of shares outstanding prior to right issue - 2,50,000 shares.
Right issue - two new share for each 5 outstanding shares (i.e. 1,00,000
new shares)
Right issue price - ` 98
Last date of exercising rights - 30-06-2023.
Fair value of one equity share immediately prior to exercise of right on
30-06-2023 is ` 102.
Net Profit to equity shareholders:
2022-2023 - ` 50,00,000
2023-2024 -` 75,00,000
You are required to calculate the basic earnings per share as per AS-20
Earnings per Share. (4 Marks)

(b) Following is the summarized Balance Sheet of Fortunate Ltd. as on

31st March, 2024.
Particulars Amount (`)
Liabilities
Authorized and Issued Share Capital
(a) 15,000 8% Preference shares of ` 50 each 7,50,000
(b) 18,750 Equity shares of ` 50 each 9,37,500
Profit and Loss Account (5,63,750)
Loan 7,16,250
Trade Payables 2,58,750
Other Liabilities 43,750
Total 21,42,500
Assets
Building at cost less depreciation 5,00,000
Plant at cost less depreciation 3,35,000
Trademarks and goodwill at cost 3,97,500
Inventory 5,00,000
Trade Receivables 4,10,000

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 Total 21,42,500
(Note: Preference shares dividend is in arrear for last five years).
The Company is running with the shortage of working capital and not
earnings profits. A scheme of reconstruction has been approved by both
the classes of shareholders. The summarized scheme of reconstruction is
as follows:
(i) The equity shareholders have agreed that their ` 50 shares should
be reduced to ` 5 by cancellation of ` 45.00 per share. They have
also agreed to subscribe for three new equity shares of ` 5.00 each
for each equity share held.
(ii) The preference shareholders have agreed to forego the arrears of
dividends and to accept for each ` 50 preference share, 4 new 6%
preference shares of ` 10 each, plus 3 new equity shares of ` 5.00
each, all credited as fully paid.
(iii) Lenders to the company for ` 1,87,500 have agreed to convert their
loan into shares and for this purpose they will be allotted 15,000
new preference shares of ` 10 each and 7,500 new equity shares of
` 5.00 each.
(iv) The directors have agreed to subscribe in cash for 25,000 new
equity shares of ` 5.00 each in addition to any shares to be
subscribed by them under (i) above.
(v) Of the cash received by the issue of new shares, ` 2,50,000 is to be
used to reduce the loan due by the company.
(vi) The equity share capital cancelled is to be applied:
(a) To write off the debit balance in the Profit and Loss A/c, and
(b) To write off ` 43,750 from the value of plant.
Any balance remaining is to be used to write down the value of
trademarks and goodwill. The nominal capital, as reduced, is to be
increased to ` 8,12,500 for preference share capital and ` 9,37,500 for
equity share capital.
You are required to pass journal entries to show the effect of above
scheme and prepare the Balance Sheet of the Company after
reconstruction. (10 Marks)

4. The financial details of X Ltd. and Y Ltd. as on 31st March, 2024 was as under:
X Ltd. (`) Y Ltd. (`)
Equity Shares of ` 10 each 30,00,000 9,00,000
9% Preference Shares of ` 100 each 3,00,000 -
10% Preference Shares of ` 100 each - 3,00,000
General Reserve 2,10,000 2,10,000
Retirement Gratuity Fund (long term) 1,50,000 60,000
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 Trade Payables 3,90,000 2,40,000
Goodwill 1,50,000 75,000
Land & Buildings 9,00,000 3,00,000
Plant & Machinery 15,00,000 4,50,000
Inventories 7,50,000 5,25,000
Trade Receivables 6,00,000 3,00,000
Cash and Bank 1,50,000 60,000
X Ltd. absorbs Y Ltd. on the following terms:
(i) 10% Preference Shareholders are to be paid at 10% premium by issue of
9% Preference Shares of X Ltd.
(ii) Goodwill of Y Ltd. on absorption is to be computed based on two times
of average profits of preceding three financial years (2022-23 : ` 90,000;
2021-22 : ` 78,000 and 2020-21: ` 72,000). The profits of 2020 -21
included credit of an insurance claim of ` 25,000 (fire occurred in 2019-
20 and loss by fire ` 30,000 was booked in Profit and Loss Account of
that year). In the year 2021 -22, there was an embezzlement of cash by
an employee amounting to ` 10,000.
(iii) Land & Buildings are valued at ` 5,00,000 and the Plant & Machinery at
` 4,00,000.
(iv) Inventories are to be taken over at 10% less value and Provision for
Doubtful Debts is to be created @ 2.5%.
(v) There was an unrecorded current asset in the books of Y Ltd. whose fair
value amounted to ` 15,000 and such asset was also taken over by X Ltd.
(vi) The trade payables of Y Ltd. included ` 20,000 payable to X Ltd.
(vii) Equity Shareholders of Y Ltd. will be issued Equity Shares @ 5% premium.
You are required to
(i) Prepare Realisation A/c in the books of Y Ltd.
(ii) Prepare the Balance Sheet of X Ltd. after absorption as at
31st March,2024. (14 Marks)
5. Consider the following summarized Balance Sheets of subsidiary MNT Ltd.
Liabilities 2022-23 2023-24
Amount in ` Amount in `
Share Capital
Issued and subscribed 7500 Equity Shares of 7,50,000 7,50,000
` 100 each
Reserve and Surplus
Revenue Reserve 2,14,000 5,05,000
Securities Premium 72,000 2,07,000
Current Liabilities and Provisions
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 Trade Payables 2,90,000 2,46,000
Bank Overdraft - 1,70,000
Provision for Taxation 2,62,000 4,30,000
15,88,000 23,08,000
Assets
Fixed Assets (Cost) 9,20,000 9,20,000
Less: Accumulated Depreciation (1,70,000) (2,82,500)
7,50,000 6,37,500
Investment at Cost - 5,30,000
Current Assets
Inventory 4,12,300 6,90,000
Trade Receivable 2,95,000 3,43,000
Prepaid expenses 78,000 65,000
Cash at Bank 52,700 42,500
15,88,000 23,08,000
Other Information:
(1) MNT Ltd. is a subsidiary of LTC Ltd.
(2) LTC Ltd. values inventory on FIFO basis, while MNT Ltd. used LIFO basis.
To bring MNT Ltd.'s inventories values in line with those of LTC Ltd., its
value of inventory is required to be reduced by ` 5,000 at the end of
2022-2023 and increased by ` 12,000 at the end of 2023-2024.
(Inventory of 2022-23 has been sold out during the year 2023-24)
(3) MNT Ltd. deducts 2% from Trade Receivables as a general provision
against doubtful debts.
(4) Prepaid expenses in MNT Ltd. include Sales Promotion expenditure
carried forward of ` 25,000 in 2022-23 and ` 12,500 in 2023-24 being
part of initial Sales Promotion expenditure of ` 37,500 in 2022-23, which
is being written off over three years. Similar nature of Sales Promotion
expenditure of LTC Ltd. has been fully written off in
2022-23.
Restate the balance sheet of MNT Ltd. as on 31st March, 2024 after considering
the above information for the purpose of consolidation. Such restatement is
necessary to make the accounting policies adopted by LTC Ltd. and MNT Ltd.
uniform. (14 Marks)
6. (a) Briefly explain the elements of financial statements.
Or
In the financial statements of the financial year 2023-2024, Alpha Ltd. has
mentioned in the notes to accounts that during financial year, 24,000
equity shares of ` 10 each were issued as fully paid bonus shares.
However, the source from which these bonus shares were issued has not
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 been disclosed. Is such non-disclosure a violation of the Schedule III to
the Companies Act? Comment. (4 Marks)
(b) A Ltd. sold JCB having WDV of ` 20 lakhs to B Ltd. for ` 24 lakhs and
the same JCB was leased back by B Ltd. to A Ltd. The lease is operating
lease. In context of Accounting Standard 19 "Leases" explain the
accounting treatment of profit or loss in the books of A Ltd. if
(i) Sale price of ` 24 lakhs is equal to fair value.
(ii) Fair value is ` 20 lakhs and sale price is ` 24 lakhs.
(iii) Fair value is ` 22 lakhs and sale price is ` 25 lakhs.
(v) Fair value is ` 25 lakhs and sale price is ` 18 lakhs.
(v) Fair value is ` 18 lakhs and sale price is ` 19 lakhs. (4 Marks)

(c) Give Journal Entries in the books of Branch A to rectify or adjust the
following:
(i) Head Office expenses ` 3,500 allocated to the Branch, but not
recorded in the Branch Books.
(ii) Depreciation of branch assets, whose accounts are kept by the Head
Office not provided earlier for ` 1,500.
(iii) Branch paid ` 2,000 as salary to a H.O. Inspector, but the amount
paid has been debited by the Branch to Salaries account.
(iv) H.O. collected ` 10,000 directly from a customer on behalf of the
Branch, but no intimation to this effect has been received by the
Branch.
(v) A remittance of ` 15,000 sent by the Branch has not yet been
received by the Head Office.
(vi) Branch A incurred advertisement expenses of ` 3,000 on behalf of
Branch B.
(6 Marks)

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 Mock Test Paper - Series II: November, 2024
Date of Paper: 18th November, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 1 : ADVANCED ACCOUNTING
ANSWERS
1. (a) (iii)
(b) (i)
(c) (ii)
(d) (iii)
2. (a) (ii)
(b) (iii)
(c) (iii)
(d) (i)
3. (a) (iii)
(b) (iii)
(c) (ii)
(d) (iv)
4. (ii)
5. (i)
6. (iv)
PART II – Descriptive Questions (70 Marks)
1. (a) Provision to be made for warranty under AS 29 ‘Provisions, Contingent
Liabilities and Contingent Assets’
As at 31st March, 2023 = ` 60,000 x .02 + ` 40,000 x .03
= ` 1,200 + ` 1,200 = ` 2,400
As at 31st March, 2024 = ` 40,000 x .02 + ` 1,35,000 x .03
= ` 800 + ` 4,050 = ` 4,850
Amount debited to Profit and Loss Account for year ended
31st March, 2024
`
Balance of provision required as on 31.03.2024 4,850
Less: Opening Balance as on 1.4.2023 (2,400)
Amount debited to profit and loss account 2,450
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 Note: No provision will be made on 31st March, 2024 in respect of sales
amounting ` 60,000 made on 11th February, 2022 as the warranty period
of 2 years has already expired.
(b) As per AS 26 “Intangible Assets”, subsequent expenditure on an
intangible asset after its purchase or its completion should be recognized
as an expense when it is incurred unless (a) it is probable that the
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standard of performance; and (b)
expenditure can be measured and attributed to the asset reliably. If these
conditions are met, the subsequent expenditure should be added to the
cost of the intangible asset.
(i) In the given case, the legal expenses to defend the patent of a
product amounting ` 23,00,000 should not be capitalized and be
charged to Profit and Loss Statement.
(ii) The company is required to expense the entire amount of
` 7,00,000 in the Profit and Loss account for the year ended
31st March, 2024 because no benefit will arise in the future.
(iii) As per AS 26, expenditure on an intangible item that was initially
recognized as an expense by a reporting enterprise in previous
annual financial statements should not be recognized as part of the
cost of an intangible asset at a later date. Thus, the company
cannot capitalize the amount of ` 25,00,000 and it should be
recognized as expense
(iv) Expenditure of ` 50,00,000 on advertising and promotional
activities should always be charged to Profit and Loss Statement.
Hence, the company has done the correct treatment by debiting the
sum of 50 lakhs to Profit and Loss Account.
(c) (1) Trade discounts and volume rebates received are not
encompassed within the definition of revenue, since they represent
a reduction of cost. Trade discounts and volume rebates given
should be deducted in determining revenue.
(2) When goods are sold to distributor or others, revenue from such
sales can generally be recognized if significant risks of ownership
have passed; however, in some situations the buyer may in
substance be an agent and in such cases the sale should be treated
as a consignment sale.
(3) For transactions, where seller concurrently agrees to repurchase
the same goods at a later date that are in substance a financing
agreement, the resulting cash inflow is not revenue as defined and
should not be recognized as revenue.
(4) Insurance agency commissions should be recognized on the
effective commencement or renewal dates of the related policies.

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 (5) On 11.03.2024, if X mart takes title and accepts billing for the goods
then it is implied that the sale is complete and all risk and reward
on ownership has been transferred to the buyers.
Revenue should be recognized for year ended 31st March, 2024
notwithstanding that physical delivery has not been completed so long
as there is every expectation that delivery will be made and items were
ready for delivery to the buyer at the time.
2. MN Limited
Balance Sheet as at 31st March, 2024
Particulars Note No. (` in 000)
Equity and Liabilities
1. Shareholders' funds
A Share capital 1 300
B Reserves and Surplus 2 530
2. Non-Current liabilities
A Long term borrowings 3 200
3. Current liabilities
A Trade Payables 52
Total 1082
Assets
1. Non-current assets
A PPE (Property, Plant & Equipment) 4 880
2 Current assets
A Inventories 86
B Trade receivables 96
C Cash and bank balances 20
Total 1082

MN Limited
Statement of Profit and Loss for the year ended 31st March, 2024
Particulars Notes (` in 000)
I. Revenue from operations 700
II. Other Income 5 2
III Total Income 702
IV Expenses:
Purchases 320
Finance costs 6 20

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 Depreciation (10% of 760 ∗) 76
Other expenses 7 120
Total Expenses 536
V. Profit (Loss) for the period (III – IV) 166
Notes to accounts
(` in 000)
1. Share Capital
Equity share capital
Authorised
40,000 shares of ` 10 each 400
Issued & subscribed & called up
30,000 shares of ` 10 each 300
2. Reserves and Surplus
Securities Premium Account 40
Revaluation reserve (360 – 220) 140
General reserve 130
Profit & loss Balance
Opening balance 72
Profit for the period 166 238
Less: Appropriations
Interim Dividend (18) 220
530
3. Long term borrowing
10% Debentures 200
4. PPE
Land
Opening balance 220
Add: Revaluation adjustment 140
Closing balance 360
Plant and Machinery
Opening balance 770
Less: Disposed off (10)
760
Less: Depreciation (172-8+76) (240)
Closing balance 520

∗
770 (Plant and machinery at cost) – 10 (Cost of plant and machinery sold)
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 Total 880
5. Other Income
Profit on sale of machinery:
Sale value of machinery 4
Less: Book value of machinery (10-8) (2) 2
6. Finance costs
Debenture interest 20
7. Other expenses:
Factory expenses 60
Selling expenses 30
Administrative expenses 30 120

Note: The final dividend will not be recognized as a liability at the balance
sheet date (even if it is declared after reporting date but before approval of
the financial statements) as per Accounting Standards. Hence, it has not been
recognized in the financial statements for the year ended 31 March, 2024.
Such dividends will be disclosed in notes only.
Fair value of shares immediately prior to exercise of rights + Total amount received from exercise
3. (a)
Number of shares outstanding prior to exercise + Number of shares issued in the exercise

102 x 2,50,000 Shares + ` 98 x 1,00,000 shares

3,50,000 shares
Theoretical ex-rights fair value per share = ` 100.86
Computation of adjustment factor:
Fair value per share prior to exercise of rights
= 102/100.86 = 1.01
Theoretical ex - rights value per share

Computation of earnings per share:

EPS for the year 2022-23 as originally reported: ` 50,00,000/2,50,000
shares = ` 20
EPS for the year 2022-23 restated for rights issue: = ` 50,00,000/
(2,50,000 shares x 1.01)
= ` 19.80
EPS for the year 2023-24 including effects of rights issue:
EPS = 75,00,000/3,25,625* = ` 23.03
* [(2,50,000 x 1.01 x 3/12) + (3,50,000 x 9/12)] =63,125 + 2,62,500
= 3,25,625 shares
Note: Financial year (ended 31st March) is considered as accounting
year while giving the above answer.

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(b) In the books of Fortunate Ltd.
Journal Entries
Particulars Debit Credit
(`) (`)
1. Equity share capital A/c (` 50) Dr. 9,37,500
To Equity share capital A/c (` 5) 93,750
To Capital reduction A/c* 8,43,750
(Being equity capital reduced to
nominal value of ` 5 each)
2. Bank A/c Dr. 2,81,250
To Equity share capital 2,81,250
(Being 3 right shares against each
share was issued and subscribed)
3. 8% Preference share capital A/c Dr. 7,50,000
(` 50)
Capital reduction A/c Dr. 75,000
To 6% Preference share capital 6,00,000
(` 10)
To equity share capital 2,25,000
(Being 8% preference shares of ` 50
each converted to 6% preference
shares of ` 10 each and also given
to them 3 equity shares for every
share held)
4. Loan A/c Dr. 1,87,500
To 6% Preference share capital 1,50,000
A/c
(15,000 x ` 10)
To Equity share capital A/c 37,500
(7,500 x ` 5)
(Being loan to the extent of
` 1,50,000 converted into share
capital)
5. Bank A/c (25,000 x ` 5) Dr. 1,25,000
To Equity share application A/c 1,25,000
(Being shares subscribed by the
directors)
6. Equity share application A/c Dr. 1,25,000
To Equity share capital A/c 1,25,000
(Being application money
transferred to capital A/c)
6
 7. Loan A/c Dr. 2,50,000
To Bank A/c 2,50,000
(Being loan repaid)
8. Capital reduction A/c Dr. 7,68,750
To Profit and loss A/c 5,63,750
To Plant A/c 43,750
To Trademarks and Goodwill A/c 1,61,250
(Bal. fig.)
(Being losses and assets written off
to the extent required)
Balance sheet of Fortunate Ltd. (and reduced)
as on 31.3.2024
Particulars Notes `
Equity and Liabilities
1 Shareholders' funds
a Share capital 1 15,12,500
2 Non-current liabilities
a Long-term borrowings 2,78,750
(7,16,250 – 1,87,500 – 2,50,000)
3 Current liabilities
a Trade Payables 2,58,750
b Other current liabilities 43,750
Total 20,93,750
Assets
1 Non-current assets
a Property, Plant and Equipment 2 7,91,250
b Intangible assets 3 2,36,250
2 Current assets
a Inventories 5,00,000
b Trade receivables 4,10,000
c Cash and cash equivalents 4 1,56,250
Total 20,93,750
Notes to accounts:
`
1 Share Capital
Authorized capital:
81,250 Preference shares of ` 10 each 8,12,500

7
 1,87,500 Equity shares of ` 5 each 9,37,500 17,50,000
Issued, subscribed and paid up:
1,52,500 equity shares of ` 5 each 7,62,500
(out of the above 52,500 shares
issued for consideration other than
cash)
75,000, 6% Preference shares of ` 10 7,50,000 15,12,500
each
2 Property, Plant and Equipment
Building at cost less depreciation 5,00,000
Plant at cost less depreciation 2,91,250 7,91,250
3. Intangible assets
Trademarks and goodwill 2,36,250
4 Cash and cash equivalents
Bank (2,81,250+1,25,000-2,50,000) 1,56,250
4 In the Books of Y Ltd. Realisation Account
` `
To Sundry Assets: By Retirement Gratuity 60,000
Fund
Goodwill 75,000 By Trade payables 2,40,000
Land & Building 3,00,000 By X Ltd. (Purchase 15,90,000
Plant & Machinery 4,50,000 Consideration)
Inventory 5,25,000
Trade receivables 3,00,000
Bank 60,000 17,10,000
To Preference 30,000
Shareholders
(Premium on
Redemption)
To Equity Shareholders
(Profit on
Realisation) 1,50,000 _______
18,90,000 18,90,000

Balance Sheet of X Ltd. (after absorption)

as at 31st March, 2024
Particulars Notes `
Equity and Liabilities
1 Shareholders' funds
A Share capital 1 48,30,000
B Reserves and Surplus 2 2,70,000
8
2 Non-current liabilities
A Long-term provisions 3 2,10,000
3 Current liabilities
A Trade Payables 4 6,10,000
B Short term provision 5 7,500
Total 59,27,500
Assets
1 Non-current assets
A Fixed assets
Tangible assets 6 33,00,000
Intangible assets 7 3,00,000
2 Current assets
A Inventories 8 12,22,500
B Trade receivables 9 8,80,000
C Other current Assets 10 15,000
D Cash and cash equivalents 11 2,10,000
Total 59,27,500
Notes to accounts
`
1 Share Capital
Equity share capital
4,20,000 Equity Shares of ` 10 each fully paid (Out of 42,00,000
above 1,20,000 Equity Shares were issued in
consideration other than for cash)
Preference share capital
6,300 9% Preference Shares of ` 100 each (Out of 6,30,000
above 3,300 Preference Shares were issued in
consideration other than for cash)
Total 48,30,000
2 Reserves and Surplus
Securities Premium 60,000
General Reserve 2,10,000
Total 2,70,000
3 Long-term provisions
Retirement Gratuity fund 2,10,000
4 Trade payables
(3,90,000 + 2,40,000 - 20,000*)
* Mutual Owings eliminated. 6,10,000

9
5 Short term Provisions
Provision for Doubtful Debts 7,500
6 Tangible assets
Land & Buildings 14,00,000
Plant & Machinery 19,00,000
Total 33,00,000
7 Intangible assets
Goodwill (1,50,000 +1,50,000) 3,00,000
8 Inventories (7,50,000 + 4,72,500) 12,22,500
9 Trade receivables (6,00,000 + 3,00,000 - 20,000) 8,80,000
10 Other current Assets 15,000
11 Cash and cash equivalents (1,50,000 +60,000) 2,10,000
Working Notes:
1. Computation of goodwill `
Profit of 2022-23 90,000
Profit of 2021-22 adjusted ` 78,000 + 10,000) 88,000
Profit of 2020-21 adjusted (` 72,000 – 25,000) 47,000
2,25,000
Average profit 75,000
Goodwill to be valued at 2 times of average profits = ` 75,000 x 2
= ` 1,50,000
2.
Purchase Consideration: `
Goodwill 1,50,000
Land & Building 5,00,000
Plant & Machinery 4,00,000
Inventory 4,72,500
Trade receivables 3,00,000
Unrecorded assets 15,000
Cash at Bank 60,000
18,97,500
Less: Liabilities:
Retirement Gratuity 60,000
Trade payables 2,40,000
Provision for doubtful debts 7,500 (3,07,500)
Net Assets/ Purchase Consideration 15,90,000
To be satisfied as under:
10
 10% Preference Shareholders of Y Ltd. 3,00,000
Add: 10% Premium 30,000
9% Preference Shares of X Ltd. 3,30,000
Equity Shareholders of Y Ltd. to be satisfied by issue of
1,20,000
equity Shares of X Ltd. at 5% Premium 12,60,000
Total 15,90,000
5 Restated Balance Sheet of MNT Ltd.
as at 31st December, 2024
Particulars Note (`)
No.
I. Equity and Liabilities
(1) Shareholder's Funds
(a) Share Capital 7,50,000
(b) Reserves and Surplus 1 7,18,500
(2) Current Liabilities
(a) Short term borrowings 2 1,70,000
(b) Trade Payables 2,46,000
(c) Short-term provision 3 4,30,000
Total 23,14,500
II. Assets
(1) Non-current assets
(a) Property, Plant & Equipment 4 6,37,500
(b) Non-current Investment 5,30,000
(2) Current assets
(a) Inventories (6,90,000 +12,000) 5 7,02,000
 3, 43,000  3,50,000
(b) Trade Receivables  x 100 
 98 
(c) Cash & Cash Equivalents 42,500
(d) Other current assets 6 52,500
Total 23,14,500
Notes to Accounts
`
1. Reserves and Surplus
Revenue Reserve (refer W.N.) 5,11,500
Securities Premium 2,07,000 7,18,500
2. Short term borrowings

11
 Bank overdraft 1,70,000
3. Short-term provision
Provision for taxation 4,30,000
4. Property, Plant and Equipment
Cost 9,20,000
Less: Depreciation to date (2,82,500) 6,37,500
5. Inventories 6,90,000
Increase in value as per FIFO 12,000 7,02,000
6. Other current assets
Prepaid expenses (After adjusting sales 52,500
promotion expenses to be written off each
year) (65,000 -12,500)
Working Note:
Adjusted revenue reserves of MNT Ltd.:
` `
Revenue reserves as given 5,05,000
Add: Provision for doubtful debts [3,43,000 X 2/98) 7,000
Add: Increase in value of inventory 12,000 19,000
5,24,000
Less: Sales Promotion expenditure to be written off (12,500)
Adjusted revenue reserve 5,11,500
6. (a) Elements of Financial Statements
Asset Resource controlled by the enterprise as a result of
past events from which future economic benefits are
expected to flow to the enterprise
Liability Present obligation of the enterprise arising from past
events, the settlement of which is expected to result
in an outflow of a resource embodying economic
benefits.
Equity Residual interest in the assets of an enterprise after
deducting all its liabilities
Income/gain Increase in economic benefits during the accounting
period in the form of inflows or enhancement of assets
or decreases in liabilities that result in increase in
equity other than those relating to contributions from
equity participants
Expense/loss Decrease in economic benefits during the accounting
period in the form of outflows or depletions of assets
or incurrence of liabilities that result in decrease in

12
 equity other than those relating to distributions to
equity participants
Or
Schedule III has come into force for the Balance Sheet and Profit and
Loss Account prepared for the financial year commencing on or after 1st
April, 2023. As per Part I of the Schedule III, a company should, inter
alia, disclose in notes to accounts for the period of 5 years immediately
preceding the balance sheet date (31st March, 2024 in the instant case)
the aggregate number and class of shares allotted as fully paid-up bonus
shares. Schedule III does not require a company to disclose the source
from which bonus shares have been issued. Therefore, non-disclosure
of source from which bonus shares have been issued does not violate
the Schedule III to the Companies Act.
(b) Following will be the treatment in the given cases:
(i) When sale price of ` 24 lakhs is equal to fair value, A Ltd. should
immediately recognise the profit of ` 4 lakhs (i.e. 24 – 20) in its
books.
(ii) When fair value is ` 20 lakhs & sale price is ` 24 lakhs then profit
of ` 4 lakhs is to be deferred and amortised over the lease period.
(iii) When fair value is ` 22 lakhs & sale price is ` 25 lakhs, profit of ` 2
lakhs (22 - 20) to be immediately recognised in its books and
balance profit of ` 3 lakhs (25-22) is to be amortised/deferred over
lease period.
(iv) When fair value of leased machinery is ` 25 lakhs & sale price is
` 18 lakhs, then loss of ` 2 lakhs (20 – 18) to be immediately
recognised by A Ltd. in its books provided loss is not compensated
by future lease payment.
(v) When fair value is ` 18 lakhs & sale price is ` 19 lakhs, then the
loss of ` 2 lakhs (20-18) to be immediately recognised by A Ltd. in
its books and profit of ` 1 lakhs (19-18) should be
amortised/deferred over lease period.
(c) Books of Branch A
Journal Entries
Particulars Dr. Cr.
Amount ` Amount `
(i) Expenses account Dr. 3,500
To Head office account 3,500
(Being the allocated expenditure
by the head office recorded in
branch books)
(ii) Depreciation account Dr. 1,500
To Head office account 1,500
13
(Being the depreciation provided)

14
(iii) Head office account Dr. 2,000
To Salaries account 2,000
(Being the rectification of salary
paid on behalf of H.O.)
(iv) Head office account Dr. 10,000
To Debtors account 10,000
(Being the adjustment of
collection from branch debtors)
(v) No entry in branch books
(vi) Head Office account Dr. 3,000
To Cash account 3,000
(Being the expenditure on account
of Branch B, recorded in books)
Note: Entry (vi) Inter branch transactions are routed through Head
Office.

15
 Mock Test Paper - Series I: November, 2024
Date of Paper: 19th November, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.

PART I – Case Scenario based MCQs (30 Marks)

Part I is compulsory
Case Scenario 1
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January
1999 by Mr. Vicky Tripathi and his family members. Both the companies are
engaged in the business of manufacturing machineries used in agricultural sector.
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the
daily operations of both the companies. Vasudha Private Limited is wholly owned
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash
Limited.
Due to the poor economic conditions in the agriculture sector and shifting of the
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited
is dipping and its bottom line has been in the red for the last couple of years. The
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore.
Prakash Limited didn’t pay any dividends during the last four years. Prakash
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas
paid-up share capital is 918 crore as per its latest audited financial statement and
loss of ` 9.8 crore has not been deducted from such amount of free reserves. Since
pressure from shareholders of the free float is mounting, management at Prakash
Limited decided to pay dividend this year out of accumulated profit. Finally,
the dividend was declared on 31st August 2024. Some of the dividend remained
unpaid as on 30th September 2024, on account of operation of law; this was
transferred to unpaid Dividend Account and a statement containing only the names
of such beneficiaries was hosted on the website of the company on 9th November
2024.
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad
and is not required to appoint an independent director under section 149(4). During
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590

1
crore and net profit was ` 45.8 crore. The profits and other information for the
immediately preceding three years are given below:
Particulars Year ended Year ended Year ended
31.3.2024 31.3.2023 31.3.2022
(` in crore) (` in crore) (` in crore)
Net Profit for the year as per section 41.6 42.9 28
198 (in accordance with applicable
provisions)
The Board of Directors of Vasudha Private Limited is not clear whether they have
to compulsorily form a CSR committee. In order to avoid adverse legal
consequences, Vasudha Private Limited constituted a CSR committee comprising
of two (2) non-executive directors and one (1) executive director who was
appointed as chairperson of the committee.
On the basis of above facts and by applying applicable provisions of the Companies
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of
four) of the following Multiple Choice Questions (MCQs 1-5, of 2 marks each) given
herein under:
1. In case of Prakash Limited, regarding the unpaid dividend, which of the
following statements is correct?
(a) Prakash Limited is guilty, of non-payment of dividend, because some of
the dividends remain unpaid even after 30 days of declaration.
(b) Prakash Limited is guilty, because the list of beneficiaries of unpaid
dividend is hosted on the website after 30 days from the date it falls in
the category of unpaid dividend.
(c) Prakash Limited is guilty, because the list of beneficiaries does not
contain the latest known address of beneficiaries and the amount
unpaid.
(d) Prakash Limited is not guilty, because it has full-filled all the provisions
of law pertaining to unpaid dividend.
2. During the current year, is Vasudha Private Limited required to constitute CSR
committee under the provisions of the Companies Act, 2013?
(a) No, because it is a private company
(b) No, because it is an unlisted company and it has net-worth less than
` 500 crore
(c) Yes, because despite being unlisted company its turnover is above ` 500
crore
(d) Yes, because the company meets the threshold criteria having net profits
exceeding ₹5 crore in the immediately preceding financial year

2
3. What is the implication of the fact that Prakash Limited has not paid dividends
for the last four years while having free reserves?
(a) The company is in violation of the Companies Act, 2013, for not declaring
dividends.
(b) The shareholders can legally challenge the management for not utilizing
free reserves for dividends.
(c) There is no legal obligation to declare dividends even if the company has
free reserves.
(d) The company must now use all of its free reserves to pay dividends to
satisfy shareholder demands.
4. Considering the legal provisions regarding the constitution of CSR committee
and the one constituted by Vasudha Private Limited, state which of following
the statements hold truth?
(a) Constitution of the committee is invalid because it doesn’t consist of an
independent director.
(b) Constitution of the committee is invalid because its chairperson is an
executive director.
(c) Constitution of the committee is valid because it depends purely upon
the discretion of management.
(d) Constitution of the committee is valid because company is not required
to appoint an independent director.
5. What is the minimum amount to be spent by Vasudha Private Limited on CSR
activities for F.Y. 2024-25?
(a) ` 89.06 Lakh
(b) ` 78.20 Lakh
(c) ` 75.00 Lakh
(d) ` 73.80 Lakh
Case Scenario 2
Rahul and Meenakshi, two young entrepreneurs, founded “Educom Innovators LLP”
under the Limited Liability Partnership Act, 2008, with a focus on providing digital
education solutions. Rahul brought technical expertise, while Meenakshi managed the
business operations. According to the LLP Agreement, both contributed equally and
shared profits equally. After two years of growth, they decided to admit Anshul, an
industry expert, as a partner to expand their reach. Anshul agreed to contribute
additional capital and bring industry contacts. However, shortly after joining, Anshul
discovered that certain key compliance filings, including Form 11 (Annual Return) and
Form 8 (Statement of Accounts and Solvency), were pending. Concerned, Anshul
wanted to understand his liability and insisted that the LLP immediately address the
compliance issues. Meanwhile, Rahul proposed to amend the LLP Agreement to
reflect Anshul’s new profit-sharing ratio and allocate specific decision-making powers
to him. As they worked through these matters, they consulted a legal advisor to

3
understand how the Limited Liability Partnership Act, 2008, impacted their
responsibilities, liabilities, and compliance obligations.
On the basis of above facts and by applying applicable provisions of the Limited
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 6-8, of 2
marks each) given herein under:
6. When Anshul joined Educom Innovators LLP, he discovered that key
compliance filings, including the Annual Return and Statement of Accounts
and Solvency, were pending. What is Anshul’s liability as a newly admitted
partner concerning these past compliance lapses?
(a) Anshul has no liability for past compliance lapses since he was not a
partner when they occurred.
(b) Anshul shares equal liability for past compliance lapses because he is
now a partner in the LLP.
(c) Anshul is only liable if the LLP Agreement specifically assigns
responsibility to him for compliance.
(d) Anshul's liability for past compliance is limited to his capital contribution
in the LLP.
7. In light of Anshul’s concern about the pending compliance filings, which of the
following best describes the responsibilities of the partners in Educom
Innovators LLP regarding compliance with the LLP Act, 2008?
(a) Only the designated partners are responsible for ensuring compliance
with filing obligations under the LLP Act.
(b) All partners, including new partners like Anshul, are equally responsible
for compliance, regardless of the LLP Agreement.
(c) Compliance responsibilities can only be assigned to one partner, who
will bear full accountability.
(d) The legal advisor is responsible for handling compliance, and the
partners have no liability once they hire legal counsel.
8. Suppose in the given scenario, Educom Innovators LLP fails to file the
Statement of Account and Solvency or Annual Return for any five consecutive
financial years, which of the following could occur?
(a) Educom Innovators LLP may be wound up the Tribunal
(b) Takeover of Educom Innovators LLP by the persons appointed by the
Registrar of Companies
(c) Revocation of all partner rights until filings are complete
(d) The losses for these 5 consecutive years shall be shared equally by all
the partners irrespective of the profit sharing ratio as decided in the LLP
agreement.

4
Case Scenario 3
In 2024, New Limited, a company specializing in international trade, needed to send
an important notice to one of its clients, Mr. A, regarding a contractual amendment.
According to the company’s internal regulations and the contract terms, the notice
had to be served by post.
On April 15, 2024, the company's legal department prepared the notice and
addressed it to Mr. A at his registered address. The notice was properly addressed,
prepaid, and sent via registered post with acknowledgment due to ensure the
highest level of confirmation for delivery.
A few days later, on April 20, 2024, the notice was returned with a stamp indicating
that it was "not claimed" by Mr. A. The legal department recorded the return of the
notice and noted the endorsement.
The company’s legal advisor referred to past case laws for similar scenarios to
ensure that the notice was considered legally served under section 27 of the
General Clauses Act, 1897. They reviewed the following precedents:
United Commercial Bank v. Bhim Sain Makhija: It was noted that merely sending a
notice by registered post without the acknowledgment due did not provide sufficient
legal protection for proving service.
Jagdish Singh v. Natthu Singh: This case demonstrated that if a notice sent by
registered post was returned with a refusal endorsement, it was considered served.
Smt. Vandana Gulati v. Gurmeet Singh alias Mangal Singh: It was established that
if a notice sent by registered post to a proper address was returned with an
endorsement like "not claimed", it was deemed served unless proven otherwise.
On the basis of above facts and by applying applicable provisions of the General
Clauses Act, 1897 and the applicable Rules therein, choose the correct answer
(one out of four) of the following Multiple Choice Questions (MCQs 9-11 of 2 marks
each) given herein under:
9. According to section 27 of the General Clauses Act, 1897, what three
conditions must be fulfilled for a service by post to be deemed effective?
(a) Properly addressed, Pre-paid, and Posting by ordinary post
(b) Properly addressed, Pre-paid, and Posting by registered post
(c) Properly addressed, Pre-paid, and Sending by courier
(d) Properly addressed, Pre-paid, and Hand delivery
10. In the case of United Commercial Bank v. Bhim Sain Makhija, why was the
presumption of service under registered post found to be insufficient?
(a) Because the notice was sent by ordinary post
(b) Because the notice was sent by registered post but not with
acknowledgment due
(c) Because the address was incorrect
(d) Because the recipient did not respond

5
11. What does the case of Jagdish Singh v. Natthu Singh demonstrate about the
service of notice?
(a) Notice sent by registered post without return endorsement is invalid
(b) Notice sent by registered post and returned with refusal endorsement is
deemed served
(c) Notice sent by ordinary post is deemed served if not returned
(d) Notice served by hand delivery is always valid
Independent case scenarios
12. ABC Private Limited is a project engineering, procurement and construction
company. The company has bagged a contract from the Government of State
of Kerala for construction of Water Dam. The company has involved a project
consultancy firm situated in Australia for preparing techno-economic feasibility
report to enable it to start construction work of dam. The company had paid
USD 7,000,000 to vendor of Australia.
The company also availed the services of Software Company situated in
Denmark for the migration of its accounting software from SAP to Oracle for
which the company had paid USD 2,000,000 to the software company.
Considering the provisions of Foreign Exchange Management Act, 1999,
which of the below mentioned statement is correct:
(a) The company can make payment of USD 7,000,000 and USD 2,000,000
without any approval.
(b) The company can make payment of USD 7,000,000 without any
approval and USD 2,000,000 after obtaining prior approval of the
Reserve Bank of India (RBI).
(c) The company can make payment of USD 7,000,000 and USD 2,000,000
after obtaining prior approval of RBI.
(d) The company can make payment of USD 7,000,000 after obtaining prior
approval of RBI and USD 2,000,000 without any approval. (2 Marks)
13. Mr. Narain Srinivas had enrolled himself for management course of three
years with IOL, Mumbai. Out of three years, two years of educational course
would be provided at the campus of IOL, Mumbai and one year of educational
course would be provided at University of Auckland under student exchange
program. Mr. Narain Srinivas is required to pay tuition fee of `10 lakh directly
to IOL, Mumbai for two years course and USD 200,000 to University of
Auckland.
Mr. Narain had left India on 20th August 2022 to complete his degree from
University of Auckland. In the last month of final year of the course, he got an
offer from one of the reputed company situated in Auckland and had accepted
the offer and he decided to work there. On 1st September 2023, Mr. Narain
had visited India for 30 days to meet his family and on 1st October 2023 had
left India to carry on his employment.

6
 Considering the provisions of Foreign Exchange Management Act, 1999,
which of the below mentioned options correctly determined the residential
status of Mr. Narain Srinivas:
(a) Mr. Narain Srinivas to be treated as resident in India for Financial Year
(FY) 2023-2024 and FY 2024-2025.
(b) Mr. Narain Srinivas to be treated as resident in India for FY 2022-2023
and FY 2023-2024.
(c) Mr. Narain Srinivas to be treated as non-resident for FY 2023-2024 and
FY 2024-2025 as he left India for higher studies.
(d) Mr. Narain Srinivas to be treated as resident in India for FY 2023-2024
since he stays in India for more than 182 days and non-resident for FY
2024-2025. (2 Marks)
14. Green Tree Limited is planning to issue debentures to the public and, as per
the legal requirements, must appoint a debenture trustee before making an
offer. The company is considering several individuals for this role:
1. Mr. Sharma, who owns a small number of shares in Green Tree Limited as
an investor.
2. Ms. Kapoor, who previously lent ₹ 5,000 to Green Tree Limited and is
currently a lender.
3. Mr. Verma, who has provided a personal guarantee to ensure the
repayment of the debentures issued by Green Tree Limited.
Based on the provisions of the Companies Act, 2013 and relevant rules, who
among the following is eligible to be appointed as a Debenture Trustee for
Green Tree Limited?
(a) Only Mr. Sharma.
(b) Only Ms. Kapoor
(c) Only Mr. Verma
(d) None of Mr. Sharma, Ms. Kapoor or Mr. Verma are eligible to be
appointed as Debenture trustee of Green Tree Limited. (2 Marks)
15. Best Limited initially created a charge in favor of LKJ Bank for a financial
facility. This charge was duly registered. A few months later, LKJ Bank
enhanced the credit facility by an additional ₹ 40 crore. However, due to an
oversight, Best Limited failed to register the modification to the original charge
with the Registrar of Companies. The company has now realized this error
and is concerned about the potential impact on its records and compliance.
As per the provisions of the Companies Act, 2013, what steps should Best
Limited take to correct the situation regarding the unregistered modification of
the charge?
(a) Ignore the oversight since the original charge was registered.
(b) Re-register only the original charge with the updated facility amount.

7
 (c) File an application with the Central Government for rectification of the
Register of Charges.
(d) Contact LKJ Bank to withdraw the enhanced facility until the registration
is completed. (2 Marks)
PART – II Descriptive Questions (70 Marks)
Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) Alpha Limited (listed on Stock Exchange) was incorporated on
1st October, 2019 with a paid- up share capital of ` 200 crore. Within this
small time of 4 months, it has earned huge profits and has topped the
charts for its high employee friendly environment. The company wants
to issue sweat equity to its employees. A friend of the CEO of the
company has told him that they cannot issue sweat equity shares as 5
years have not elapsed since the time company has commenced its
business. The CEO of the company has approached you to advise them
about the essential conditions to be fulfilled before the issue of sweat
equity shares especially since their company is just a few months old?
(5 Marks)
(b) Examine the following situations in the light of the Companies Act, 2013:
(i) Mr. Prem, a Chartered Accountant, has been appointed as an
auditor of A Limited in the Annual General Meeting of the company
held in September 2023, in which he accepted the assignment.
Subsequently, in January 2024 he joined as a partner in the
consultancy firm where Mr. Ajay is also a partner. Mr. Ajay is also
working as a Finance Executive of A Limited.
(ii) Mr. Tom, a practicing Chartered Accountant, holds securities in B
Limited with a face value of ` 1,00,000. Considering this, can
Mr. Tom be appointed as the auditor of B Limited, or does his
holding disqualify him from the role? (5 Marks)
(c) Referring to the provisions of the Foreign Exchange Management Act,
1999, state the kind of approval required for the following transactions:
(i) A requires U.S. $ 5,000 for remittance towards hiring charges of
transponders.
(ii) B requires U.S. $ 2,000 for payment related to call back services of
telephones. (4 Marks)
2. (a) Mr. Romit is an employee of PQR Trading Private Limited. As per his
contract of employment, his annual salary is ` 5,00,000. Mr. Romit paid
to the company ` 5,30,000 in the nature of non-interest bearing security
deposit. Referring to the provisions of the Companies Act, 2013, decide
whether this amount received from Mr. Romit will be considered as
deposit as per rule 2(1)(c)? (5 Marks)

8
 (b) MNO Limited are finalising its financial statements and found that the
value of one of its properties has increased. The company came across
certain other transactions also and got confused as to what should be
included as ‘free reserves’.
The company has approached you to define to them the meaning of the
term "free reserves" for dividend distribution as per the provisions of the
Companies Act, 2013. (5 Marks)
(c) Explain the following with reference to the provisions of the General
Clauses Act, 1897:
(i) Movable Property
(ii) Oath (4 Marks)
3. (a) Explain the provisions of the Companies Act, 2013- who can get a
licence to operate as a section 8 company (non profit organization)?
(5 Marks)
(b) Verma Limited has Equity Share Capital of 20,000 shares @ `10 each.
The Company has received a requisition from Mr. Jai and Mr. Narayan
each holding 3,000 equity shares to call an Extraordinary General
Meeting to remove Managing Director of the company who has been
found to be involved in some malpractices. The company failed to call
the said meeting. The requisitionists desires to call the meeting by
themselves to pass the resolution to remove the Managing Director.
Explain the validity of such resolution passed in the said meeting
referring the provisions of the Companies Act, 2013. (5 Marks)
(c) Does an explanation added to a section widen the ambit of a section?
(4 Marks)
4. (a) Anoj Limited declared a final dividend to its shareholders at the Annual
General Meeting on 1st August, 2024. As per the decision, the dividend
payment was to be made within the stipulated 30-day period. However,
due to internal financial constraints, the company failed to pay the
declared dividend and did not dispatch the dividend warrants to the
shareholders within the required timeframe. The default continued until
15th October, 2024, leading to shareholder complaints.
In light of this scenario, what specific punishments and liabilities could
the company and the directors face due to this failure to pay the declared
dividend within the 30-day period? Give your answer as per the
provisions of the Companies Act, 2013. (5 Marks)
(b) Define the term ‘Financial Year’ as per the provisions of the Limited
Liability Partnership Act, 2008. (5 Marks)
(c) What is the effect of proviso? Does it qualify the main provisions of the
enactment? Explain it with reference to Interpretation of Statutes.
(4 Marks)
9
5. (a) Kishore, Kanshik, Yuvan and Bhora were partners in ABC & Associates
LLP. Yuvan resigned from the firm effective from 11th November, 2024
but this was not informed to the Registrar of Companies by the Limited
Liability Partnership or Yuvan. Whether Yuvan will still be liable for the
loss of firm of the transactions entered after 11th November, 2024? Give
your answer as per the provisions of the Limited Liability Partnership Act,
2008. (5 Marks)
(b) The auditor of ABC Limited (not a government company) has resigned
on 31st December, 2023, while the Financial year of the company ends
on 31st March, 2024. Explain how such an auditor shall be appointed, as
per the provisions of the Companies Act, 2013. (5 Marks)
(c) What do you understand by the term ‘Good Faith’. Explain as per the
provisions of the General Clauses Act, 1897. (4 Marks)
6. (a) Examine the validity of the following decision of the Board of Directors
with reference to the provisions of the Companies Act, 2013:
In an Annual General Meeting of a company having share capital, 80
members present in person or by proxy holding more than 1/10th of the
total voting power, demanded for poll. The chairman of the meeting
rejected the request on the ground that only the members present in
person can demand for poll. (5 Marks)
OR
(a) ABC Limited served a notice of General Meeting upon its members. The
notice stated that a resolution to increase the share capital of the
company would be considered at such meeting. Raj, a shareholder of
the company complained that the amount of the proposed increase was
not specified in the notice. Is the notice valid? (5 Marks)
(b) Explain the provisions of the Companies Act, 2013 [read along with the
Companies (Registration of Foreign Companies) Rules, 2014] in respect
of ‘Audit of accounts of foreign company’. (5 Marks)
(c) Explain the meaning of term ‘Current Account transactions’ as defined
under the Foreign Exchange Management Act, 1999. (4 Marks)

10
 Mock Test Paper - Series I: November, 2024
Date of Paper: 19th November, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
ANSWER TO PART – I CASE SCENARIO BASED MCQS

1. (c)
2. (d)
3. (c)
4. (d)
5. (c)
6. (a)
7. (a)
8. (a)
9. (b)
10. (b)
11. (b)
12. (b)
13. (c)
14. (d)
15. (c)

ANSWERS OF PART – II DESCRIPTIVE QUESTIONS

1. (a) Sweat equity shares of a class of shares already issued.
According to section 54 of the Companies Act, 2013, a company may
issue sweat equity shares of a class of shares already issued, if the
following conditions are fulfilled, namely—
(i) the issue is authorised by a special resolution passed by the
company;
(ii) the resolution specifies the number of shares, the current market
price, consideration, if any, and the class or classes of directors or
employees to whom such equity shares are to be issued;
(iii) where the equity shares of the company are listed on a recognised
stock exchange, the sweat equity shares are issued in accordance
1
 with the regulations made by the Securities and Exchange Board
in this behalf and if they are not so listed, the sweat equity shares
are issued in accordance with such rules as prescribed under Rule
8 of the Companies (Share and Debentures) Rules, 2014,
The rights, limitations, restrictions and provisions as are for the time
being applicable to equity shares shall be applicable to the sweat equity
shares issued under this section and the holders of such shares shall
rank paripassu with other equity shareholders.
Alpha Limited can issue sweat equity shares by following the conditions
as mentioned above. It does not make a difference that the company is
just a few months old.
(b) (i) Section 141(3)(c) of the Companies Act, 2013 prescribes that any
person who is a partner or in employment of an officer or employee
of the company will be disqualified to act as an auditor of a
company. Section 141(4) provides where a person appointed as an
auditor of a company incurs any of the disqualifications mentioned
in section 141(3) after his appointment, he shall vacate his office
as such auditor and such vacation shall be deemed to be a casual
vacancy in the office of the auditor.
In the present case, Mr. Prem, an auditor of A Limited, joined as
partner with consultancy firm where Mr. Ajay has become a partner
and Mr. Ajay is also the Finance executive of A Limited. Hence, Mr.
Prem has attracted clause (3)(c) of section 141 and, therefore, he
shall be deemed to have vacated office of the auditor of A Limited.
(ii) As per section 141(3)(d)(i), an auditor is disqualified to be
appointed as an auditor if he, or his relative or partner holds any
security of or interest in the company or its subsidiary, or of its
holding or associate company or a subsidiary of such holding
company.
In the present case, Mr. Tom is holding security of ` 1,00,000 in the
B Limited, therefore, he is not eligible for appointment as an auditor
of B Limited.
(c) Under provisions of section 5 of the Foreign Exchange Management Act,
1999 certain Rules have been made for drawal of Foreign Exchange for
Current Account transactions. As per these Rules, Foreign Exchange for
some of the Current Account transactions is prohibited. As regards some
other Current Account transactions, Foreign Exchange can be drawn
with prior permission of the Central Government while in case of some
Current Account transactions, prior permission of Reserve Bank of India
is required.
Accordingly,
(i) It is a current account transaction, where A is required to take
approval of the Central Government for drawal of foreign exchange
for remittance of hire charges of transponders.

2
 (ii) Withdrawal of foreign exchange for payment related to call back
services of telephone is a prohibited transaction. Hence, Mr. B
cannot obtain US $ 2,000 for the said purpose.
In all the cases, where remittance of Foreign Exchange is allowed, either
by general or specific permission, the remitter has to obtain the Foreign
Exchange from an Authorised Person.
2. (a) Rule 2(1)(c) of the Companies (Acceptance of Deposit) Rules, 2014,
states various amounts received by a company which will not be
considered as deposits. As per rule 2(1)(c)(x) any amount received from
an employee of the company not exceeding his annual salary under a
contract of employment with the company in the nature of non-interest-
bearing security deposit is not considered as deposit.
In the instant case, ` 5,30,000 was received by PQR Trading Private
Limited as a non-interest-bearing security deposit, from its employee,
Mr. Romit, who draws an annual salary of ` 5,00,000 under a contract of
employment.
Accordingly, amount of ` 5,30,000 received from Mr. Romit, will be
considered as deposit in terms of sub-clause (x) of Rule 2(1)(c) of the
Act, as the amount received from Mr. Romit is more than his annual
salary of ` 5,00,000.
(b) As per section 2(43) of the Companies Act, 2013, free reserves means
such reserves which, as per the latest audited balance sheet of a
company, are available for distribution as dividend:
Provided that—
(i) any amount representing unrealised gains, notional gains or
revaluation of assets, whether shown as a reserve or otherwise, or
(ii) any change in carrying amount of an asset or of a liability
recognized in equity, including surplus in profit and loss account on
measurement of the asset or the liability at fair value,
shall not be treated as free reserves.
(c) (i) Movable Property
According to section 3(36) of the General Clauses Act, 1897,
‘Movable Property’ shall mean property of every description, except
immovable property.
Thus, any property which is not immovable property is movable
property. Debts, share, electricity are moveable property.
(ii) Oath
According to section 3(37) of the General Clauses Act, 1897, ‘Oath’
shall include affirmation and declaration in the case of persons by
law allowed to affirm or declare instead of swearing.
3. (a) As per section 8 of the Companies Act, 2013, the Central Government
(ROC in its behalf) may grant a licence (to operate as a non profit
organisation) if it is proved to the satisfaction that a person or an
3
 association of persons proposed to be registered under the Companies
Act, 2013, as a limited company:
- has in its objects the promotion of commerce, art, science, sports,
education, research, social welfare, religion, charity, protection of
environment or any such other object;
- intends to apply its profits (if any) or other income in promoting its
objects; and
- intends to prohibit payment of any dividend to its members.
(b) Validity of Resolution passed in the EGM called by the
Requisitionists
As per section 100(2) of the Companies Act, 2013, read with Rule 17 of
the Companies (Management and Administration) Rules, 2014, the
Board shall on the requisition of, in the case of company having a share
capital, such number of members who hold, on the date of receipt of
requisition, at least 1/10th of such paid-up capital of the company as on
that date carries the right of voting, shall call for the meeting.
The requisition made under sub-section (2) shall set out the matters for
the consideration of which the meeting is to be called and shall be signed
by the requisitionists and sent to the registered office of the company.
The Board must, within 21 days from the date of receipt of a valid
requisition, proceed to call a meeting on a day not later than 45 days
from the date of receipt of such requisition.
If the Board does not, within 21 days from the date of receipt of a valid
requisition in regard to any matter, proceed to call a meeting for the
consideration of that matter on a day not later than 45 days from the date
of receipt of such requisition, the meeting may be called and held by the
requisitionists themselves within a period of three months from the date
of the requisition. [Sub-Section 4].
Sub-section (5) of Section 100 provides that the requisitionists shall call
and hold the meeting in the same manner in which the meeting is called
and held by the Board.
Sub-section (6) of Section 100 any reasonable expenses incurred by the
requisitionists in calling a meeting under sub-section (4) shall be
reimbursed to the requisitionists by the company and the sums so paid
shall be deducted from any fee or other remuneration under section 197
payable to such of the directors who were in default in calling the
meeting.
In the given case, meeting called by requisitionists to pass the resolution
to remove the Managing Director in the said meeting can be said to be
valid as the requisition moved from Mr. Jai and Mr. Narayan holding
` 60,000 (each holding ` 30,000) equity share capital (1/10th of
1,00,000) is in compliance with the legal requirement and will be binding
on the company, its officers and members provided if all the conditions
for a valid meeting are satisfied.
4
 (c) Sometimes an explanation is added to a section of an Act for the purpose
of explaining the main provisions contained in that section. If there is
some ambiguity in the provisions of the main section, the explanation is
inserted to harmonise and clear up the ambiguity in the main section.
Something may be added to or something may be excluded from the
main provision by insertion of an explanation. But the explanation should
not be construed to widen the ambit of the section.
4. (a) According to section 127 of the Companies Act, 2013, in case a company
fails to pay declared dividends or fails to post dividend warrants within
30 days of declaration, following punishments are applicable:
(i) Every director of the company shall be punishable with
imprisonment of up to two years, if he is knowingly a party to the
default. And, he shall also be liable to pay minimum fine of ` 1,000
for every day during which such default continues.
(ii) The company shall be liable to pay simple interest at the rate of
18% p.a. during the period for which such default continues.
(b) Financial Year: According to section 2(1)(l) of the Limited Liability
Partnership Act, 2008, “Financial year”, in relation to a Limited Liability
Partnership (LLP), means the period from the 1st day of April of a year
to the 31st day of March of the following year.
However, in the case of a LLP incorporated after the 30th day of
September of a year, the financial year may end on the 31st day of March
of the year next following that year.
(c) Normally a Proviso is added to a section of an Act to except something
or qualify something stated in that particular section to which it is added.
A proviso should not be, ordinarily, interpreted as a general rule. Usually,
a proviso is embedded in the main body of the section and becomes an
integral part of it.
The effect of the proviso is to qualify the preceding enactment which is
expressed in terms which are too general.
It is a cardinal rule of interpretation that a proviso or exception to a
particular provision of a statute only embraces the field which is covered
by the main provision. It carves out an exception to the main provision
to which it has been enacted as a proviso and to no other. (Ram Narain
Sons Ltd. vs. Assistant Commissioner of Sales Tax, AIR 1955 SC 765).
5. (a) According to section 24(3), where a person has ceased to be a partner
of a LLP (hereinafter referred to as “former partner”), the former partner
is to be regarded (in relation to any person dealing with the LLP) as still
being a partner of the LLP unless:
(a) the person has notice that the former partner has ceased to be a
partner of the LLP; or

5
 (b) notice that the former partner has ceased to be a partner of the LLP
has been delivered to the Registrar.
Hence, by virtue of the above provisions, as no notice of resignation was
given to ROC, Yuvan will still be liable for the loss of firm of the
transactions entered after 11th November, 2024.
(b) The situation as stated in the question relates to the creation of a casual
vacancy in the office of an auditor due to resignation of the auditor before
the Annual General Meeting (AGM), in case of a company other
government company. Under section 139 (8)(i) any casual vacancy in
the office of an auditor arising as a result of his resignation, such vacancy
can be filled by the Board of Directors within 30 days thereof and in
addition the appointment of the new auditor shall also be approved by
the company at a general meeting convened within three months of the
recommendation of the Board and he shall hold the office till the
conclusion of the next annual general meeting.
(c) Good Faith: According section 3(22) of the General Clauses Act, 1897,
a thing shall be deemed to be done in “good faith” where it is in fact done
honestly, whether it is done negligently or not.
The question of good faith under the General Clauses Act is one of fact.
It is to determine with reference to the circumstances of each case. The
term “Good faith” has been defined differently in different enactments.
This definition of the good faith does not apply to that enactment which
contains a special definition of the term “good faith” and there the
definition given in that particular enactment has to be followed. This
definition may be applied only if there is nothing repugnant in subject or
context, and if that is so, the definition is not applicable.
6. (a) Section 109 of the Companies Act, 2013 provides for the demand of poll
before or on the declaration of the result of the voting on any resolution
on show of hands. Accordingly, law says that:-
Before or on the declaration of the result of the voting on any resolution
on show of hands, a poll may be ordered to be taken by the Chairman of
the meeting on his own motion, and shall be ordered to be taken by him
on a demand made in that behalf:-
(i) In the case a company having a share capital, by the members
present in person or by proxy, where allowed, and having not less
than one-tenth of the total voting power or holding shares on which
an aggregate sum of not less than five lakh rupees or such higher
amount as may be prescribed has been paid-up; and
(ii) in the case of any other company, by any member or members
present in person or by proxy, where allowed, and having not less
than one tenth of the total voting power.

6
 In the given question, 80 members present in person or by proxy holding
more than 1/10th of the total voting power, demanded for poll. Hence, the
contention of the Chairman is not valid.
OR
(a) Under section 102(2)(b) of the Companies Act, 2013, in the case of any
general meeting other than an Annual General Meeting, all business
transacted thereat shall be deemed to be special business.
Further under section 102(1), a statement setting out the following
material facts concerning each item of special business to be transacted
at a general meeting, shall be annexed to the notice calling such
meeting, namely:
(1) the nature of concern or interest, financial or otherwise, if any, in
respect of each items, of:
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);
(2) any other information and facts that may enable members to
understand the meaning, scope and implications of the items of
business and to take decision thereon.
Thus, the objection of the shareholder is valid since the details of the
item to be considered at the general meeting are not fully disclosed. The
information about the amount is a material fact with reference to the
proposed increase of share capital. The notice is, therefore, not a valid
notice considering the provisions of section 102 of the Companies Act,
2013.
(b) Audit of accounts of foreign company
According to the Companies (Registration of Foreign Companies) Rules,
2014,
(i) Every foreign company shall get its accounts, pertaining to the
Indian business operations prepared in accordance with section
381(1) of the Companies Act, 2013 and Rules thereunder, shall be
audited by a practicing Chartered Accountant in India or a firm or
limited liability partnership of practicing chartered accountants.
(ii) The provisions of Chapter X i.e. Audit and Auditors and rules made
there under, as far as applicable, shall apply, mutatis mutandis, to
the foreign company.

7
(c) According to section 2(j) of the Foreign Exchange Management Act,
1999, ‘Current Account transaction’ means a transaction other than a
capital account transaction and without prejudice to the generality of the
foregoing such transaction includes,
(i) payments due in connection with foreign trade, other current
business, services, and short-term banking and credit facilities in
the ordinary course of business.
(ii) payments due as interest on loans and as net income from
investments.
(iii) remittances for living expenses of parents, spouse and children
residing abroad, and
(iv) expenses in connection with foreign travel, education and medical
care of parents, spouse and children.

8
 Mock Test Paper - Series I: November, 2024
Date of Paper: 25th November, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP - I

PAPER – 3: TAXATION
Time Allowed – 3 Hours Maximum Marks – 100
SECTION – A: INCOME TAX LAW (50 MARKS)
Working Notes should form part of the answer. Wherever necessary, suitable
assumptions may be made by the candidates and disclosed by way of a note.
However, in answers to Questions in Division A, working notes are not
required.
The relevant assessment year is A.Y.2024-25.
Division A – Multiple Choice Questions
Write the most appropriate answer to each of the following multiple choice
questions by choosing one of the four options given. All questions are
compulsory.
1. Mr. Raja, an Indian citizen, aged 61 years, has set-up his business in
Canada and is residing in Canada since 2009. He owns a house property in
Canada, half of which is used by him for his residence and half is given on
rent (converted into INR is ` 12,00,000 p.a.).
He purchased a flat in Delhi on 13.10.2019. He has taken a loan from
Canara Bank in India of ` 34,00,000 for purchase of this flat. The interest on
such loan for the F.Y. 2023-24 was ` 3,14,000 and principal repayment was
` 80,000. Mr. Raja has given this flat on monthly rent of ` 32,500 since April,
2023. The annual property tax of Delhi flat is ` 40,000 which is paid by
Mr. Raja, whenever he comes to India to meet his parents. Mr. Raja visited
India for 124 days during the previous year 2023-24. Before that he visited
India in total for 366 days during the period 1.4.2019 to 31.3.2023.
He had a house in Ranchi which was sold in May 2021. In respect of this
house, he received arrears of rent of ` 2,96,000 in February 2024 (not taxed
earlier).
Mr. Raja has sold 10,000 listed shares @ ` 480 per share of A Ltd., an
Indian company, on 15.9.2023, which he acquired on 05-04-2017 @ ` 100
per share. STT was paid both at the time of acquisition as well as at the time
of transfer of such shares.
On 31-01-2018, the shares of A Ltd. were traded on a recognized stock
exchange as under:
Highest price - ` 300 per share
Average price - ` 290 per share

1
 Lowest price - ` 280 per share
Mr. Raja wants to pay tax under default tax regime under section 115BAC.
Based on the facts of the case scenario given above, choose the most
appropriate answer to the following questions:-
(i) What would be the residential status of Mr. Raja for the A.Y. 2024-25?
(a) Resident and ordinarily resident in India
(b) Resident but not ordinarily resident in India
(c) Non-resident
(d) Deemed resident
(ii) What would be amount of income taxable under the head “Income from
house property” in the hands of Mr. Raja for the A.Y. 2024-25?
(a) ` 2,52,200
(b) ` 1,38,200
(c) ` 9,78,200
(d) ` 10,92,200
(iii) What amount of capital gain would arise in the hands of Mr. Raja on
transfer of shares of A Ltd?
(a) ` 18,00,000
(b) ` 19,00,000
(c) ` 20,00,000
(d) ` 38,00,000 (3 x 2 Marks)
2. Mr. Anay (aged 52 years), is a CEO of XYZ Enterprise Limited. During the
previous year 2023-24, he earned salary of ` 1,65,00,000 and long-term
capital gain on sale of listed equity shares (STT paid) amounting to
` 1,06,500. He earned interest of ` 4,82,778 on saving bank account.
Further, he has provided the following other information for filing his return of
income:
He does not receive house rent allowance from his employer. Mr. Anay took
a loan from State Bank of India on 27th October 2021 for repairing his house
(self-occupied) at Delhi and paid interest on such borrowings of ` 80,000
and ` 1,50,000 towards principal amount during the previous year 2023-24.
Mr. Anay has made the following payments towards medical insurance
premium for health policies taken for his family members:
Medical premium for his brother: ` 13,500 (by cheque)
Medical premium for his parents: ` 17,670 (by cheque)
Medical premium for self and his wife: ` 21,000 (by cheque).

2
 He also incurred ` 6,400 towards preventive health check-up of his wife in
cash. He deposited ` 1,00,000 towards PPF. He also deposited
` 50,000 and ` 2,50,000 towards Tier I and Tier II NPS A/c, respectively.
He has paid ` 5,30,000 as advance tax. His employer has deducted tax at
source of ` 51,89,000. He is of the opinion that the balance amount of tax, if
any, he will pay on 27th July 2024.
Mr. Anay shift out of the default tax regime under section 115BAC.
Based on the facts of the case scenario given above, choose the most
appropriate answer to the following questions:-
(i) What would be the amount of deduction available to Mr. Anay under
Chapter VI-A for the assessment year 2024-25?
(a) ` 2,04,070
(b) ` 2,42,670
(c) ` 2,52,670
(d) ` 2,02,670
(ii) Assume that, for the purpose of answering this question alone, that
Mr. Anay pays rent of ` 65,000 per month for his rented house at
Mumbai to Mr. C, a resident individual. Is Mr. Anay liable to deduct
TDS on such rent? If so, what would be the rate and amount of TDS?
(a) Yes, Mr. Anay is liable to deduct TDS @ 3.75% amounting to
` 2,438 every month i.e., at the time of payment of such rent
(b) Yes, Mr. Anay is liable to deduct TDS @5% amounting to
` 3,250 every month i.e., at the time of payment of such rent
(c) Yes, Mr. Anay is liable to deduct TDS @5% amounting to
` 39,000 in the month of March 2024
(d) No, Mr. Anay is not liable to deduct TDS, since he is a salaried
person
(iii) What would be the amount of interest chargeable under section 234B
on account of short payment of advance tax?
(a) ` 1,980
(b) Nil
(c) ` 3,130
(d) ` 2,410 (3 x 2 Marks)
3. On 20.10.2023, Piya (minor child) gets a gift of ` 20,00,000 from her father’s
friend. On the same day, the amount is deposited as fixed deposit in Piya’s
bank account. On the said deposit, interest of ` 13,000 was earned during
the P.Y. 2023-24. In whose hands the income of Piya shall be taxable? Also,
compute the amount of income that shall be taxable if both parents pay tax
under default tax regime.
(a) Income of ` 20,11,500 shall be taxable in the hands of Piya’s father.
3
 (b) Income of ` 20,13,000 shall be taxable in the hands of Piya’s father.
(c) Income of ` 20,11,500 shall be taxable in the hands of Piya’s father or
mother, whose income before this clubbing is higher.
(d) Income of ` 20,13,000 shall be taxable in the hands of Piya’s father or
mother, whose income before this clubbing is higher. (2 Marks)
4. Rohit, a resident Indian, has incurred ` 15,000 for medical treatment of his
dependent brother, who is a person with severe disability and has deposited
` 20,000 with LIC for his maintenance. Rohit shifts out of the default tax
regime for A.Y. 2024-25. Rohit would be eligible for deduction under section
80DD of an amount equal to –
(a) ` 15,000
(b) ` 35,000
(c) ` 75,000
(d) ` 1,25,000 (1 Mark)

Division B – Descriptive Questions

Question No. 1 is compulsory.
Attempt any two questions from the remaining three questions.
1. Mr. Amit, aged 45 years, a resident Indian has provided you the following
information for the previous year ended 31.03.2024
(i) He received royalty of ` 2,88,000 from abroad for a book authored by
him in the nature of artistic. The rate of royalty as 18% of value of
books and expenditure made for earning this royalty was ` 40,000. The
amount remitted to India till 30th September, 2024 is ` 2,30,000.
(ii) He owns an industrial undertaking established in a SEZ and which had
commenced operation during the financial year 2021-22. Total turnover
of the undertaking was ` 200 lakhs, which includes `140 lakhs from
export turnover which have been received in India in convertible foreign
exchange on or before 30.9.2024. Profit from this industry is ` 20 lakhs.
(iii) He was holding 30% equity shares in TSP (P) Ltd., an Indian company.
Company allotted shares to shareholders on 1st October, 2020. The
paid up share capital of company is ` 20 lakh divided into 2 lakh shares
of ` 10 each which were issued at a premium of ` 30 each.
He sold all these shares on 30th April, 2023 for ` 60 per share. Equity
shares of TSP (P) Ltd. are listed on National Stock Exchange and
Mr. Amit has paid STT both at the time of acquisition and transfer of
such shares. FMV on 31.1.2018 was ` 50 per share.
(iv) Received ` 30,000 as savings bank deposits.
(v) He occupies ground floor of his residential building and has let out first
floor for residential use at an annual rent of ` 2,28,000. He has paid
4
 municipal taxes of ` 60,000 for the current financial year. Both floor are
of equal size.
(vi) He paid insurance premium of ` 39,000 on life insurance policy of son,
who is not dependent on him and ` 48,000 on life insurance policy of
his dependent father.
(vii) He paid tuition fees of ` 42,000 for his three children to a school. The
fees being ` 14,000 p.a. per child.
You are required to compute the total income and tax liability of Mr. Amit
under normal provisions for the A.Y. 2024-25. (15 Marks)
2. (a) Mrs. Riya, aged 62 years, was born and brought up in New Delhi. She
got married in Russia in 1996 and settled there since then. Since her
marriage, she visits India for 60 days each year during her summer
break. The following are the details of her income for the previous year
ended 31.03.2024:
S. Particulars Amount
No. (in `)
1. Pension received from Russian Government 65,000
2. Long-term capital gain on sale of land at New Delhi 3,00,000
(computed)
3. Short-term capital gain on sale of shares of Indian 60,000
listed companies in respect of which STT was paid
both at the time of acquisition as well as at the
time of sale (computed)
4. Premium paid for self to Russian Life Insurance 75,000
Corporation at Russia
5. Rent received (equivalent to Annual Value) in 90,000
respect of house property in New Delhi
You are required to ascertain the residential status of Mrs. Riya and
compute her total income in India for Assessment Year 2024-25 under
default tax regime. (6 Marks)
(b) Mr. Sameer, aged 52 years, provides you the following information and
requests you to determine his advance tax liability with due dates for
the financial year 2023-24.
Estimated tax liability for the financial year 2023-24 ` 80,000
Tax deducted at source for this year ` 12,000
(4 Marks)
3. (a) Mr. Piyush runs a sole proprietorship firm and owns four machines
which was put in use for business in March, 2022. The depreciation on
these machines is charged @ 15%. The written down value of these
machines as on 1st April, 2023 was ` 7,70,000. Two of the old
machines were sold on 15th July, 2023 for ` 10,00,000. A second hand
plant was bought for ` 6,10,000 on 30th December, 2023.
5
 Further, Mr. Piyush has furnished the following particulars relating to
payments made and expenditure incurred towards scientific research
for the year ended 31.3.2024:
Sl. Particulars ` (in lakhs)
No.
(i) Payment made to UV University, an approved 15
University
(ii) Payment made to Satywati College 17
Compute the following for Assessment Year 2024-25
(i) Claim of depreciation
(ii) Capital gains liable to tax
(iii) Deduction available under section 35 if he has shifted out of the
default tax regime (6 Marks)
(b) Mr. Asif bought a vacant land for ` 80 lakhs in March 2005.
Registration and other expenses were 10% of the cost of land. He
constructed a residential building on the said land for ` 100 lakhs
during the financial year 2006-07.
He entered into an agreement for sale of the above said residential
house with Mr. Hari (not a relative) in July 2023. The sale consideration
was fixed at ` 600 lakhs and on the date of agreement, Mr. Asif
received ` 20 lakhs as advance in cash. The stamp duty value on that
date was ` 620 lakhs.
The sale deed was executed and registered on 10-2-2024 for the
agreed consideration. However, the State stamp valuation authority
had revised the values, hence, the value of property for stamp duty
purposes was ` 670 lakhs. Mr. Asif paid 1% as brokerage on sale
consideration received.
Subsequent to sale, Mr. Asif made investments in NHAI bond: ` 45
lakhs on 29-5-2024 and ` 15 lakhs on 12-7-2024.
Compute the Capital Gain chargeable to tax for A.Y. 2024-25.
Cost Inflation Index: F.Y. 2004-05 113
F.Y. 2006-07 122
F.Y. 2023-24 348 (4 Marks)
4. (a) Vijay Prasad, a non resident aged 50 years furnishes the following
information of the income from India for the year ended on 31-03-2024:
Income by way of salary (computed) 2,75,000
Short term capital loss (1,85,000)
Business income - Retail business 1,20,000
Business income - whole sale business (1,00,000)

6
 Brought forward business loss (A.Y. 2021-22) (1,35,000)
Long term capital gain from sale of building 2,00,000
Lottery winnings (gross) 45,000
Contribution to provident fund and NSC 1,50,000
Income of minor daughter Manisha from special talent 2,00,000
Compute his income tax liability assuming that he opts out of the
default tax regime under section 115BAC. (6 Marks)
(b) Mr. Kailash, a resident and ordinarily resident in India, could not file his
return of Income for the assessment year 2021-22 before due date
prescribed under section 139(1). Advise Mr. Kailash as a tax
consultant.
What are the consequences for non-filing of return of Income within the
due date under section 139(1)?
OR
(b) Mr. Naksh has undertaken certain transactions during the F.Y.2023-24,
which are listed below. You are required to identify the transactions in
respect of which quoting of PAN is mandatory in the related
documents–
S. Transaction
No.
1. Payment of life insurance premium of ` 40,000 in the
F.Y.2023-24 by account payee cheque to LIC for insuring life
of self and spouse
2. Payment of ` 1,10,000 to RBI for acquiring its bonds
3. Applied for issue of credit card to SBI
4. Payment of ` 1,00,000 by account payee cheque to travel
agent for travel to Singapore for 3 days to visit
(4 Marks)

7
 SECTION B – GOODS AND SERVICES TAX (50 MARKS)
QUESTIONS
(i) Working Notes should form part of the answers. However, in answers to
Questions in Division A, working notes are not required.
(ii) Wherever necessary, suitable assumptions may be made by the candidates,
and disclosed by way of notes.
(iii) All questions should be answered on the basis of position of the GST law as
amended by provisions of the CGST Act, 2017 and the IGST Act, 2017 as
amended by the Finance Act, 2023, including significant notifications and
circulars issued, up to 30th June, 2024.
Division A - Multiple Choice Questions (MCQs)
Write the most appropriate answer to each of the following multiple-choice
questions by choosing one of the four options given. All questions are
compulsory.
Total Marks: 15 Marks
Case Scenario 1
FUTURE Insurance Ltd. is an insurance company providing life and general
insurance services across India. The company has been carrying on its business
for the past three years with the approval of IRDA.
FUTURE Insurance Ltd. secure its business through various insurance agents
spread across India. Those agents include individuals, firm, LLP and private limited
company also. However, all of them are licensed under the Insurance Act.
The company availed services of renting of motor vehicles for its employees in PAN
India through ‘RR Travels Private Limited’, where cost of fuel is included in the
consideration charged. The service provider charged 5% GST and informed the
company that it is claiming ITC only in respect of the same line of business.
FUTURE Insurance Ltd. provided the following details of insurance business for the
month of May-
Sl. Nature of receipt Amount in `
No.
i. Premium received on Pradhan Mantri Jan Dhan Yojana 5,00,000
ii. Premium received on Aam Aadmi Bima Yojana 3,00,000
iii. Premium received on Life micro-insurance product having a 4,00,000
sum assured of ` 2.50 lakh
iv. Premium received on reinsurance of Group Personal 1,00,000
Accident Policy for Self-Employed Women
v. Premium received on Fire and Special perils policy of 7,00,000
various business units
vi. Premium received on Money-back policies issued 12,00,000

8
FUTURE Insurance Ltd. received the following supplies in the month of May
and the details of GST paid on such supplies are as follows-
i GST paid on purchase of car for use of Managing Director –
` 5,00,000
ii GST paid on bus (seating capacity for 14 persons) purchased by the
company for transportation of its employees from their residence to office
and back – ` 3,00,000
iii GST of ` 80,000 was paid on general insurance taken from Amity
Insurance Ltd. for motor vehicles for transportation of persons with
seating capacity ≤ 13 persons (including the driver) which were used in
transportation of staff of the company.
All the amounts given above are exclusive of taxes wherever applicable. All
the supplies referred above are intra-State unless specified otherwise.
Aggregate turnover of the company is not less than ` 10 crores for the past
three years. Conditions necessary for availment of ITC are fulfilled subject to
the information given.
Values given in the question, wherever required, are in accordance with the
relevant CGST Rules, 2017.
Based on the facts of the case scenario given above, choose the most
appropriate answer to Q. Nos. 1 to 3 below:
1. Determine the services on which the company is liable to pay tax under
reverse charge?
(a) Service availed from insurance agents
(b) Service availed from RR Travels Private Limited
(c) None of the services availed attracts RCM
(d) Both (a) & (b)
2. Compute the total value of taxable supply made by FUTURE Insurance
Ltd. for the month of May?
(a) ` 4,00,000
(b) ` 12,00,000
(c) ` 23,00,000
(d) ` 32,00,000
3. Determine the amount of ITC that can be claimed by FUTURE Insurance
Ltd?
(a) ` 80,000
(b) ` 3,00,000
(c) ` 3,80,000
(d) ` 8,80,000 (3 x 2 Marks = 6 Marks)

9
Case Scenario 2
Madurai Impex Ltd. (‘company’) is engaged in supplying sports goods. The
company did not opt for registration under GST. The proper officer under GST,
based on enquiry, finds that the company is liable for registration and he registers
the firm on temporary basis on 15th June, 2023.
Further, in the month of February 2024, the company also generated an e-way bill
for inter-State transport of goods. However, immediately on generation of the e-
way bill, the buyer cancelled the order before it was dispatched from the factory for
delivery.
In the month of March 2024, since the company was incurring heavy losses, it
applied for cancellation of GST registration on 15th March 2024. The order for
cancellation was made on 30th March 2024, effecting cancelling the registration
with effect from 15th March 2024.
On the basis of the facts given above, choose the most appropriate answer to Q.4
to Q.6 below:
4. After the grant of temporary registration, Madurai Impex Ltd. needs to apply
for registration within __________ from the date of grant of temporary
registration, if no extension of period is to be granted for such temporary
registration.
(a) 30 days
(b) 90 days
(c) 7 days
(d) 15 days
5. The Company needs to file its Final return by __________.
(a) 30th April, 2024
(b) 30th August, 2024
(c) 15th June, 2024
(d) 30th June, 2024
6. Which of the following statements is correct in respect of e-way bill generated
for goods in the month of February for which order was cancelled?
(a) Once generated, E-way bill cannot be cancelled.
(b) E-way bill can be cancelled within 24 hours of generation
(c) E-way bill can be cancelled within 48 hours of generation
(d) E-way bill can be cancelled within 72 hours of generation
(3 x 2 Marks= 6 Marks)
7. ABC Insurance Ltd. received a proposal for pandemic insurance for cricket
tournament organised by Lion’s Club. Sum assured for said insurance was
` 20 Crores with a premium of ` 5 lakh. The company issued the said policy

10
 on 1st July. The invoice for the same was issued on 5th August. Premium was
received on 14th August.
Determine the time of supply of service provided to Lion’s Club?
(a) 1st July
(b) 16th August
(c) 05th August
(d) 14th August (2 Marks)
8. Mr. Naresh, a supplier of readymade garments issued an invoice to a
customer and erroneously charged a higher value by ` 42,000. Such an
invoice was issued on 28th March, 2024. Which document is required to be
issued by the company in respect of the invoice issued on 28th March 2024?
(a) Debit note
(b) Credit note
(c) Bill of supply
(d) Revised Tax invoice (1 Mark)

Division B - Descriptive Questions

Question No. 1 is compulsory.
Attempt any two questions out of remaining three questions.
Total Marks:35 Marks
1. (a) Miss Shreya, proprietor of M/s. Happy Enterprise, a registered supplier
of taxable goods and services in the state of West Bengal, pays GST
under regular scheme. It is not eligible for any threshold exemption. It
provided the following information for the month of December 2024:
S. Particulars Amount
No. (`)
OUTWARD SUPPLY:
i. Intra-state supply of goods to M/s. Reliable & Sons 7,00,000
ii. Intra-state transfer of goods to its branch office in the 1,00,000
state of West Bengal. Both places are under the
same GSTIN.
iii. Permanent transfer of old computers to orphanage 80,000
home without consideration. Input tax credit was not
availed on the same.
iv. Advance received for Future supply of management 40,000
consultancy service to Mr. Shubam (Intra-state
supply)
INWARD SUPPLY: (Intra-state)
i. Purchase of taxable goods from registered 8,00,000
suppliers.
11
 ii. Availed Works Contract service for repair of office 30,000
building. Amount of repair was debited in the profit &
loss account.
iii. Availed legal service form an advocate to represent 50,000
the matter in the Court relating to collection of
disputed proceed from customers.
Notes:
(i) Rate of CGST, SGST and IGST on all supplies are as below:
Particulars CGST SGST IGST
Goods 2.5% 2.5% 5%
Supply of services 9% 9% 18%

(ii) Both inward and outward supplies given above are exclusive of
taxes.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
(iv) The aggregate turnover of M/s Happy Enterprise in the preceding
financial year exceeds the threshold limit for registration.
(v) Working note should form part of the answer.
Compute the net minimum GST payable in cash by M/s. Happy
Enterprise for the month of December 2024. (10 Marks)
(b) Renuka Sales, a registered supplier, receives 100 invoices (for inward
supply of goods/ services) involving GST of ` 10 lakh, from various
suppliers during the month of January, 2024. Out of 100 invoices, details
of 80 invoices involving GST of ` 6 lakh have been furnished by the
suppliers in their respective GSTR-1s filed on the prescribed due date
therefor and such details have also been duly communicated to the
recipients of such invoices in Form GSTR-2B.
Compute the ITC that can be claimed by Renuka Sales in its GSTR-3B
for the month of January, 2024 to be filed by 20th February assuming that
GST of ` 10 lakh is otherwise eligible for ITC.
Make suitable assumptions, wherever necessary. (5 Marks)
2. (a) Comment on the taxability or otherwise of the following transactions
under GST law. Also state the correct legal provisions for the same.
S. Description of Services provided
No.
(i) Service provided by a private transport operator to Vintage
Girls Higher Secondary School by way of transportation of
students to and from the school.

12
 (ii) Services provided by way of vehicle parking to general public
in a shopping complex.
(iii) Food supplied by the canteen run by a hospital to the in-
patients as advised by the doctors.
(iv) An RWA in a housing society, registered under GST, collects
the maintenance charges of ` 6,500 per month per member.
(4 Marks)
(b) State the person liable to pay GST in the following independent case:
(i) Legal Fees is received by Abhishek, an advocate, from M/s. Navya
Trading Company, engaged in making taxable supplies and located
in Maharashtra, having turnover of ` 50 lakh in preceding financial
year.
(ii) Padam Srivastav, an independent director, appointed in
accordance with the provisions of the Companies Act, 2013, of One
Fourth Pvt. Ltd., has received sitting fee amounting to ` 1 lakh from
One Fourth Pvt. Ltd. for attending the Board meetings. (6 Marks)
3. (a) Right Oils, an unregistered entity located in U.P. is engaged in supply of
machine oil and high-speed diesel. During the month of April, it supplied
machine oil in U.P. amounting to ` 15,00,000. Also, it supplied high
speed diesel in U.P. amounting to ` 10,00,000. Further, it supplied
machine oil in Punjab from its branch located in Punjab amounting to
` 10,00,000.
Note: All the amounts mentioned above are excluding GST.
(i) Determine whether Right Oils is liable for registration.
(ii) What will be your answer if, Right Oils supplies the high speed
diesel in U.P. in the capacity of an agent of Center Oils Ltd., (non-
registered), where invoices to customers are issued in name of
Right oils? Would your answer be different in case if Center Oils
Ltd. is registered entity? (5 Marks)
(b) Determine whether the suppliers in the following cases are eligible for
composition levy, under section 10(1) & 10(2) of the CGST Act, 2017,
provided their turnover in preceding year does not exceed ` 1.5 crore:
(i) Shyam Enterprises is engaged only in trading of pan masala in
Rajasthan and is registered in the same State.
(ii) Sahaj Manufacturers has registered offices in Punjab and Haryana and
sells goods manufactured by it in the neighbouring States. (5 Marks)
4. (a) An unregistered person Mr. Pappan from Faridabad travels by Air India
flight from Pune to Delhi and gets his travel insurance done in Pune.
What is the place of supply of insurance services? (5 Marks)

13
 Or
(a) GST is payable on advance received for supply of goods and services
taxable under forward charge.
Do you agree with the statement? Support your answer with legal
provisions. (5 Marks)
(b) “All taxpayers are required to file GSTR-1 only after the end of the tax
period.” Examine the validity of the statement. (5 Marks)

14
 Mock Test Paper - Series I: November, 2024
Date of Paper: 25th November, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP - I

PAPER – 3: TAXATION
SECTION – A: INCOME TAX LAW
ANSWERS
Division A – Multiple Choice Questions
MCQ No. Sub-part Most Appropriate MCQ Most Appropriate
Answer No. Answer
1. (i) (b) 3. (d)
(ii) (b) 4. (d)
(iii) (a)
2. (i) (d)
(ii) (c)
(iii) (b)
Division B – Descriptive Questions
1. Computation of total income of Mr. Amit for A.Y. 2024-25
Particulars ` ` `
I Income from house property
Let out portion [First floor]
Gross Annual Value [Rent 2,28,000
received is taken as GAV, in
the absence of other
information]
Less: Municipal taxes paid by 30,000
him in the P.Y. 2023-24
pertaining to let out portion
[` 60,000/2]
Net Annual Value (NAV) 1,98,000
Less: Deduction u/s 24
(a) 30% of ` 1,98,000 59,400
1,38,600
Self-occupied portion
[Ground Floor]
Annual Value Nil
[No deduction is allowable in 1,38,600

1
 respect of municipal taxes
paid]
II Profits and gains of business
or profession
Income from SEZ unit 20,00,000
III Capital Gains
On transfer of 60,000 shares
(2,00,000 x 30%)
Sales consideration [60,000 x 36,00,000
` 60 per share]
Less: Cost of acquisition, 30,00,000
higher of –
- Actual cost [60,000 x 24,00,000
` 40 per share]
- Lower of
FMV on 31.1.2018 [60,000 30,00,000
x 50]
Actual sales consideration 36,00,000
[60,000 x 60]
Long-term capital gains u/s 6,00,000
112A (since shares are held for
a period of more than 12
months before transfer)
IV Income from Other Sources
Royalty from artistic book 2,88,000
Less: Expenses incurred for 40,000
earning royalty
2,48,000
Interest on savings bank 30,000
deposits
2,78,000
Gross Total Income 30,16,600
Less: Deduction u/s 10AA -
[Not available, since he
commenced operation in P.Y.
2021-22]
Less: Deduction under
Chapter VI-A
Deduction under section 80C
Tuition fee paid for maximum 28,000
of two children is allowable
(` 14,000 x 2)

2
 Insurance premium paid on life 39,000
insurance policy of son
allowable, even though not
dependent on Mr. Amit
Insurance premium paid on life - 67,000
insurance policy of father not
allowable, even though father
is dependent on Mr. Amit
Deduction under section 1,90,000
80QQB
Royalty [` 2,88,000 x 15/18 =
` 2,40,000, restricted to
amount brought into India in
convertible foreign exchange
` 2,30,000 minus ` 40,000
expenses already allowed as
deduction while computing
royalty income]
Deduction under section 10,000
80TTA
Interest on savings bank
account, restricted to ` 10,000
2,67,000
Total Income 27,49,600
Computation of tax liability of Mr. Amit for A.Y.2024-25 under
the normal provisions of the Act
Particulars ` `
Tax on total income of ` 27,49,600
Tax on LTCG of ` 5,00,000, being the sum 50,000
exceeding ` 1 lakh @10%
Tax on remaining total income of ` 21,49,600
Upto ` 2,50,000 Nil
` 2,50,001 – ` 5,00,000[@5% of ` 2.50 lakh] 12,500
` 5,00,001 – ` 10,00,000 [@20% of ` 5,00,000] 1,00,000
` 10,00,001 – ` 21,49,600 [@30% of ` 11,49,600] 3,44,880 4,57,380
5,07,380
Add: Health and education cess@4% 20,295
Total tax liability 5,27,675
Tax liability (rounded off) 5,27,680

3
 Computation of adjusted total income and AMT of Mr. Amit for
A.Y. 2024-25
Particulars `
Computation of adjusted total income
Total income as per the normal provisions of the Act 27,49,600
Add: Deduction u/s 80QQB 1,90,000
Adjusted Total Income 29,39,600
Alternative Minimum Tax@18.5% 5,43,826
Add: Health and education cess@4% 21,753
AMT liability 5,65,579
AMT liability (rounded off) 5,65,580
Since the regular income-tax payable is less than the alternate minimum
tax payable, the adjusted total income shall be deemed to be the total
income and tax is leviable @18.5% thereof plus cess@4%. Therefore,
liability as per section 115JC is ` 5,65,580.
2. (a) An Indian citizen or a person of Indian origin who, being outside India,
comes on a visit to India (and whose total income, other than from
foreign sources, does not exceed ` 15,00,000) would be resident in
India only if he or she stays in India for a period of 182 days or more
during the previous year. Even if his total income, other than from
foreign sources, exceeds ` 15,00,000, he would be resident in India if
stays in India for 120 days or more during the relevant previous year
and 365 days or more during the 4 previous years immediately
preceding the relevant previous year.
Since Mrs. Riya is a person of Indian origin who comes on a visit to
India only for 60 days in the P.Y.2023-24, she is non-resident for the
A.Y. 2024-25.
A non-resident is chargeable to tax in respect of income received or
deemed to be received in India and income which accrues or arises or
is deemed to accrue or arise to her in India. Accordingly, her total
income and tax liability would be determined in the following manner:
Computation of total income and tax liability of Mrs. Riya for
A.Y. 2024-25
Particulars Amt (`)
Salaries
Pension received from Russian Government [Not taxable, Nil
since it neither accrues or arises in India nor it is received
in India]
Income from House Property
Annual Value [Rental Income from house 90,000
property in New Delhi is taxable, since it is

4
 deemed to accrue or arise in India, as it accrues
or arises from a property situated in India]
Less: Deduction u/s 24(a) @ 30% 27,000 63,000
Capital Gains
Long-term capital gains on sale of land at New Delhi 3,00,000
[Taxable, since it is deemed to accrue or arise in India as
it is arising from transfer of land situated in India]
Short-term capital gains on sale of shares of Indian listed 60,000
companies in respect of which STT was paid [Taxable,
since it is deemed to accrue or arise in India, as such
income arises on transfer of shares of Indian listed
companies]
Gross Total Income 4,23,000
Less: Deduction under Chapter VI-A
Deduction under section 80C [Not available under default Nil
tax regime]
Total Income 4,23,000
(b) Determination of Advance Tax Liability of Mr. Sameer
Particulars `
Estimated tax liability for the financial year 2023-24 80,000
Less: Tax deducted at source 12,000
Tax payable 68,000
Due Date of Amount payable `
installment
On or before Not less than 15% of
15th June, 2023 advance tax liability 10,200
On or before Not less than 45% of 20,400
15th September, advance tax liability (` 30,600, being 45% of
2023 less amount paid in ` 68,000 - ` 10,200)
earlier installment
On or before Not less than 75% of 20,400
15th December, advance tax liability (51,000, being 75% of
2023 less amount paid in ` 68,000 - ` 30,600)
earlier installment(s)
On or before Whole of the advance 17,000
15th March, tax liability less (68,000, being 100% of
2024 amount paid in earlier ` 68,000 - ` 51,000)
installment(s)

5
3. (a) (i) Computation of depreciation for A.Y.2024-25
Particulars `
W.D.V. of the block as on 1.4.2023 7,70,000
Add: Purchase of second hand plant during the
year [in December, 2023] 6,10,000
13,80,000
Less: Sale consideration of old machinery during 10,00,000
the year [in July, 2023]
W.D.V of the block as on 31.03.2024 3,80,000
Depreciation @ 15% but restricted to 50% 28,500
thereon. ` 3,80,000 X 7.5%
[Since the value of the block as on 31.3.2024
represents part of actual cost of second hand
plant purchased in December, 2023, which has
been put to use for less than 180 days,
depreciation is restricted to 50% of the prescribed
percentage of 15% i.e. depreciation is restricted
to 7½%. Therefore, the depreciation allowable for
the year is ` 28,500 being 7½% of ` 3,80,000]
(ii) In the given case, no capital gains would arise, since the block of
asset continues to exist, and some of the assets are sold for a
price which is lesser than the written down value of the block as
increased by the actual cost of asset purchased during the year
(iii) Computation of deduction allowable under section 35
Particulars Amount Section % of Amount of
(` in weighted deduction
lakhs) deduction (` in lakhs)
Payment for
scientific
research
UV University, 15 35(1)(ii) 100% 15
an approved
University
Satyawati 17 - NIL NIL
College [Since it
is not
mentioned as
an approved
University]

6
(b) Computation of income chargeable under the head “Capital
Gains” for A.Y.2024-25
Particulars ` `
(in lakhs) (in lakhs)
Capital Gains on sale of residential
building
Actual sale consideration ` 600 lakhs
Value adopted by Stamp Valuation
Authority ` 670 lakhs
Full Value of Consideration 670.00
[In case the actual sale consideration
declared by the assessee is less than the
value adopted by the Stamp Valuation
Authority for the purpose of charging
stamp duty, then, the value adopted by
the Stamp Valuation Authority shall be
taken to be the full value of consideration
as per section 50C.
In a case where the date of agreement is
different from the date of registration,
stamp duty value on the date of
agreement can be considered provided
the whole or part of the consideration is
paid by way of account payee
cheque/bank draft or by way of ECS
through bank account on or before the
date of agreement.
However, where the stamp duty value
does not exceed 110% of the sale
consideration received or accruing as a
result of the transfer, the consideration so
received or accruing shall be deemed to
be the full value of the consideration. In
this case, since advance of ` 20 lakh is
paid by cash, stamp duty value of ` 620
lakhs on the date of agreement cannot be
adopted as the full value of consideration
and stamp duty value on the date of
registration would be considered.
However, since stamp duty value on the
date of registration exceeds 110% of the
actual consideration, stamp duty value on
the date of registration would be the full
value of consideration]
Less: Brokerage@1% of sale 6.00
consideration (1% of ` 600 lakhs)

7
 Net Sale consideration 664.00
Less: Indexed cost of acquisition
- Cost of vacant land, ` 80 lakhs,
plus registration and other
expenses i.e., ` 8 lakhs, being 271.01
10% of cost of land [` 88 lakhs ×
348/113]
- Construction cost of residential 285.25
building (` 100 lakhs x 348/122) 556.26
Long-term capital gains before 107.74
exemption
Less: Exemption under section 54EC 50.00
Amount deposited in capital gains
bonds of NHAI within six months
from the date of transfer (i.e., on or
before 09.08.2024) would qualify for
exemption, to the maximum extent of
` 50 lakhs.
Therefore, in the present case,
exemption can be availed only to the
extent of ` 50 lakh out of ` 60 lakhs,
even if the both the investments are
made on or before 09.08.2024 (i.e.,
within six months from the date of
transfer).
Long Term Capital Gains [Since it was 57.74
held for more than 24 months]

4. (a) Computation of tax liability of Mr. Vijay Prasad for A.Y.2024-25

Particulars ` `
Salary
Income by way of salary (computed) 2,75,000
Profits and gains from business and
profession
Business Income- Retail business 1,20,000
Less: Set-off of business loss of ` 1,00,000
from wholesale business 1,00,000
20,000
Less: Set-off of brought forward business loss
of ` 1,35,000 of A.Y.2021-22 allowable to the
extent of ` 20,000 by virtue of section 72(1) 20,000 Nil
[Balance brought forward business loss of
` 1,15,000 (i.e., ` 1,35,000 – ` 20,000) to be
carry forward to A.Y. 2025-26 for set-off
8
 against business income of that year]
Capital Gains
Long-term capital gain on sale of building 2,00,000
Less: Set-off of short term capital loss 1,85,000 15,000
Income from Other Sources
Lottery winnings 45,000
Income of minor daughter from special talent -
[Not included in Vijay Prasad’s income since it
is earned from special talent]
Gross Total Income 3,35,000
Less: Deduction under section 80C
Contribution to provident fund and NSC 150,000
` 1,50,000
Total Income 1,85,000
Tax on ` 1,85,000
Tax on lottery income of ` 45,000 @30% 13,500
[Unexhausted basic exemption limit can not be
reduced from lottery income]
Tax on LTCG of ` 15,000 @20% [Unexhausted 3,000
basic exemption limit can not be reduced from
LTCG as Mr. Vijay is a non resident]
Tax on other income of ` 1,25,000 (since it -
does not exceed basic exemption limit)
16,500
Add: Health and education cess @4% 660
Tax liability 17,160
(b) [First Alternative]
Consequences for non-filing return of income within the due date
under section 139(1)
Interest under section 234A
Interest under section 234A@1% per month or part of the month for the
period commencing from the date immediately following the due date
under section 139(1) till the date of furnishing of return of income is
payable, where the return of income is furnished after the due date.
However, no interest u/s 234A shall be charged on self-assessment tax
paid by the assessee on or before the due date of filing of return.
Fee under section 234F
Late fee of ` 5,000 would be payable under section 234F, if the return
of income is not filed before the due date specified in section 139(1).

9
 However, such fee cannot exceed ` 1,000, if the total income does not
exceed ` 5,00,000.
Carry forward and set-off of certain losses not permissible
Following losses would not be allowed to be carried forward, where a
return of income is not furnished within the time allowed under section
139(1):
- business loss, speculation business loss, loss from specified
business,
- loss under the head “Capital Gains”; and
- loss from the activity of owning and maintaining race horses.
(b) [Second Alternative]
Transaction Is quoting of PAN mandatory in
related documents?
1. Payment of life insurance No, since the amount paid does not
premium of ` 40,000 in exceed ` 50,000 in the F.Y.2023-24.
the F.Y.2023-24 by
account payee cheque to
LIC for insuring life of self
and spouse
2. Payment of ` 1,10,000 to Yes, since the amount paid exceeds
RBI for acquiring its ` 50,000
bonds
3. Applied to SBI for issue of Yes, quoting of PAN is mandatory
credit card. on making an application to a
banking company for issue of credit
card.
4. Payment of ` 1,00,000 by No, since the amount was paid by
account payee cheque to account payee cheque and not in
travel agent for travel to cash, quoting of PAN is not
Dubai for 3 days to visit mandatory even though the
payment exceeds ` 50,000

10
 SECTION B – GOODS AND SERVICES TAX (50 MARKS)
SUGGESTED ANSWERS
Division A - Multiple Choice Questions
Case Scenario-1
Question Answer
No.
1. (a) Service availed from Insurance Agents
2. (c) ` 23,00,000
3. (c) ` 3,80,000
Case Scenario-2
Question Answer
No.
4. (b) 90 days
5. (d) 30th June, 2024
6. (b) E-way bill can be cancelled within 24 hours of generation
7. (c) 5th August
8. (b) Credit Note

Division B - Descriptive Questions

1. (a) Computation of minimum net GST payable in cash by M/s Happy
Enterprise for the month of December 2024
Particulars Value CGST SGST IGST
(`) (`) (`) (`)
GST payable under forward charge
Intra-State supply of 7,00,000 17,500 17,500
goods to M/s Natural & [7,00,000 [7,00,000
Sons × 2.5%] × 2.5%]
Intra-State branch 1,00,000 -- --
transfer

[Such transfer is not a

supply as the branch has
the same GSTIN as that
of the head office and
thus, is not a distinct
person.]
Permanent transfer of 80,000 --
old computers to
orphanage home without
consideration.
[Permanent transfer or
disposal of business
11
assets was not treated
as supply even if made
without consideration in
terms of Schedule–I of
the CGST Act, 2017, as
ITC was not availed on
the same.]
Advance received for 40,000 3,600 3,600
future intra-State supply [40,000 [40,000
of management × 9%] × 9%]
consultancy service
(In case of supply of
service, tax is payable at
the time of receipt of
advance amount too)
Total output tax 21,100 21,100
Less: ITC utilized 27,200 27,200
Net GST payable [A] Nil Nil
Legal services availed 50,000 4,500 4,500
[B] [50,000 [50,000
× 9%] × 9%]
[Tax on legal services
availed by a business
entity from an advocate
is payable under reverse
charge.
Further, tax payable
under reverse charge
cannot be set off against
ITC and thus, reverse
charge has to be paid in
cash since the tax
payable under reverse
charge is not an output
tax.]
Minimum net GST 4,500 4,500
payable in cash
[A] + [B]
Working Note:
Computation of ITC available
Particulars Value CGST (`) SGST (`) IGST
(`) (`)
Intra-State purchase of 8,00,000 20,000 20,000
taxable goods [8,00,000 × [8,00,000 ×
2.5%] 2.5%]
[ITC of goods used in
the course/ furtherance
12
 of business is
available.]
Works contract service 30,000 2,700 2,700
for repair of office [30,000 × [30,000 ×
[ITC is available since 9%] 9%]
the repair amount is
debited in the profit &
loss account and not
capitalized in the books
of account.]
Legal services availed 50,000 4,500 4,500
[50,000 × [50,000 ×
[ITC of services used in 9%] 9%]
the course/ furtherance
of business is available
Total 27,200 27,200
(b) ITC to be claimed by Renuka Sales in its GSTR-3B for the month of
January to be filed by 20th February will be computed as under-
Invoices Amount of ITC Amount of ITC that
involved in the can be availed (`)
invoices (`)
80 invoices furnished in 6 lakh 6 lakh
GSTR-1 [Refer Note 1]
20 invoices not furnished 4 lakh Nil
in GSTR-1 [Refer Note 2]
Total 10 lakh 6 lakh

Notes:
(1) 100% ITC can be availed on invoices furnished by the suppliers in
their GSTR-1.
(2) Input tax credit in respect of any supply of goods or services or both
is available to a registered person only, inter alia, if the details of
the invoice/debit note in respect of said supply has been furnished
by the supplier in the statement of outward supplies (GSTR-1) and
such details have been communicated to the recipient of such
invoice/debit note in the manner specified under section 37. Thus,
in respect of 20 invoices not furnished in GSTR-1s, no ITC is
available.
2. (a)
S. Particulars Taxability
No.
(i) Service provided by a private transport operator to Exempt
Vintage Girls Higher Secondary School by way of
transportation of students to and from the school.
[Services provided TO an educational institution by
13
 way of transportation of students are exempted from
GST]
(ii) Services provided by way of vehicle parking to Taxable
general public in a shopping complex.
[Services provided by way of vehicle parking to
general public are not exempted from GST.
Therefore, it would be taxable.]
(iii) Food supplied by the canteen run by a hospital to the Exempt
in-patients as advised by the doctors.
[Services by way of health care services by a clinical
establishment, an authorised medical practitioner or
para-medics are exempt from GST. Food supplied to
the in-patients by a canteen run by the hospital, as
advised by the doctor/nutritionists, is a part of
composite supply of healthcare and not separately
taxable. Thus, said services are exempt from GST.]
(iv) An RWA in a housing society, registered under GST, Exempt
collects the maintenance charges of ` 6,500 per
month per member.
[Supply of service by a RWA (unincorporated body or
a non-profit entity registered under any law) to its own
members by way of reimbursement of charges or
share of contribution up to an amount of ` 7500 per
month per member for providing services and goods
for the common use of its members in a housing
society/a residential complex are exempt from GST.
Hence, in the given case, services provided by the
RWA are exempt from GST since the maintenance
charges collected per month per member do not
exceed ` 7500.]
(b) (i) If services provided by an individual advocate including a senior
advocate or firm of advocates by way of legal services, directly or
indirectly, then GST is payable on reverse charge basis.
Accordingly, in this case, GST on legal services supplied by an
advocate [Mr. Abhishek] to any business entity [M/s. Navya Trading
Company] located in the taxable territory is payable on reverse
charge basis.
Therefore, in the given case, person liable to pay GST is the
recipient of services, i.e., M/s. Navya Trading Company.
(ii) The part of director’s remuneration which is declared as salaries in
the books of a company and subjected to TDS under section 192
of the Income-tax Act (IT Act), is not taxable being consideration
for services by an employee to the employer in the course of or in
relation to his employment in terms of Schedule III of the CGST
Act,2017.

14
 Further, the part of employee director’s remuneration which is
declared separately other than salaries in the company’s accounts
and subjected to TDS under section 194J of the IT Act as fees for
professional or technical services are treated as consideration for
providing services which are outside the scope of Schedule III and
is therefore, taxable. The recipient of the said services i.e. the
company, is liable to discharge the applicable GST on it on reverse
charge basis.
In lieu of the above provisions, Rs. 1 Lakh sitting fees to Padam
Srivastav, an independent director is subjected to TDS under
section 192 of the Income-Tax Act (IT Act), is not taxable being
consideration for services by an employee to the employer in the
course of or in relation to his employment in terms of Schedule III
of the CGST Act,2017.
Therefore, recipient of the said services i.e. the One 4th Private
Limited, is liable to discharge the applicable GST on it on reverse
charge basis.
3. (a) (i) A supplier is liable to be registered in the State/Union territory from
where he makes a taxable supply of goods and/or services, if his
aggregate turnover in a financial year exceeds the threshold limit.
The threshold limit for a person making exclusive intra-State
taxable supplies of goods is as under:-
(a) ` 10 lakh for the Special Category States of Mizoram, Tripura,
Manipur and Nagaland.
(b) ` 20 lakh for the States, namely, States of Arunachal Pradesh,
Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand.
(c) ` 40 lakh for rest of India except persons engaged in making
supplies of ice cream and other edible ice, whether or not
containing cocoa, pan masala and tobacco and manufactured
tobacco substitutes, fly ash bricks; fly ash aggregates; fly ash
blocks, bricks of fossil meals or similar siliceous earths,
building bricks, earthen or roofing tiles.
The threshold limit for a person making exclusive taxable supply of
services or supply of both goods and services is as under:-
(a) ` 10 lakh for the Special Category States of Mizoram, Tripura,
Manipur and Nagaland.
(b) ` 20 lakh for the rest of India.
Aggregate turnover includes the aggregate value of:
1. all taxable supplies,
2. all exempt supplies,
3. exports of goods and/or services and
4. all inter-State supplies of persons having the same PAN.
15
 The above aggregate turnover is computed on all India basis.
Further, the aggregate turnover excludes central tax, State tax,
Union territory tax, integrated tax and cess. Moreover, the value of
inward supplies on which tax is payable under reverse charge is
not taken into account for calculation of ‘aggregate turnover’.
CGST is not leviable on five petroleum products i.e. petroleum
crude, motor spirit (petrol), high speed diesel, natural gas and
aviation turbine fuel. Exempt supply includes non-taxable supply.
Thus, supply of high speed diesel in U.P., being a non-taxable
supply, is an exempt supply and is, therefore, includible while
computing the aggregate turnover.
In the backdrop of the above-mentioned discussion, the aggregate
turnover of Right Oils for the month of April is computed as under:
S. Particulars Amount
No. (in `)
(i) Supply of machine oils in U.P. 15,00,000
(ii) Add: Supply of high speed diesel in U.P. 10,00,000
(iii) Add: Supply of machine oil made by Right 10,00,000
Oils from its branch located in Punjab
Aggregate Turnover 35,00,000
Right Oils is making exclusive supply of goods and hence the
threshold limit for registration would be ` 40,00,000. Since the
aggregate turnover does not exceed ` 40,00,000, Right Oils is not
liable to be registered till April. However, if in remaining months of
the financial year, its turnover exceeds the said limit, then it would
be liable to be registered.
(ii) In case Right Oils makes the supply in capacity of an agent of
Center Oils Ltd.:
Section 24 of the CGST Act, 2017 provides that an agent who is
engaged in making taxable supplying of goods on behalf of other
taxable persons, shall be liable to obtain registration irrespective of
the threshold turnover limit. However, in the present case, if Right
Oils supply high speed diesel on behalf of Center Oil Ltd. in U.P.
as its agent where invoices to customers are issued in name of
Right Oils, it shall still not be liable to obtain registration in U.P.
since section 24 comes into play only when agent or in other
capacity is making taxable supply of goods on behalf of taxable
persons (principal) whereas in the given case, Right Oils is
supplying non-taxable goods on behalf of Center Oils Ltd., who is
non-registered.
In case if Center Oils Ltd. is registered entity, then also the answer
would remain unchanged as attraction of section 24 of the CGST
Act, 2017, inter-alia, requires that there should be taxable supply

16
 by agent and here, Right Oils is supplying non-taxable goods on
behalf of Center Oils Ltd.
(b) (i) A supplier engaged in the manufacture of notified goods during the
preceding financial year is not eligible for composition scheme
under section 10(1) and 10(2) of the CGST Act, 2017. Ice cream
and other edible ice, whether or not containing cocoa, Pan masala,
Tobacco and manufactured tobacco substitutes, aerated waters, fly
ash bricks, fly ash aggregate, fly ash blocks, bricks of fossil meals
or similar siliceous earths, building bricks, earthen or roofing tiles
are notified under this category. However, in the given case, since
Shyam Enterprises is engaged in trading of pan masala and not
manufacture and his turnover does not exceed ` 1.5 crore, he is
eligible for composition scheme subject to fulfilment of specified
conditions.
(ii) Since supplier of inter-State outward supplies of goods or services
is not eligible for composition levy, Sahaj Manufacturers is not
eligible for composition levy.
4. (a) section 12 of IGST Act, 2017 deals with the provisions of place of supply
of services, where location of supplier of service and the location of the
recipient of service is in India.
In accordance with sub-section (13) of section 12 of IGST Act, 2017, The
place of supply of insurance services shall:-
(a) to a registered person, be the location of such person;
(b) to a person other than a registered person, be the location of the
recipient of services on the records of the supplier of services.
So, in the given case, when insurance service is provided to an
unregistered person, Mr. Pappan, the location of the recipient of services
on the records of the supplier of insurance services is the place of
supply. So, Faridabad is the place of supply.
Or
(a) The statement is not correct. While GST is payable on advance received
for supply of services taxable under forward charge, the same is not
payable in case of advance received for supply of goods taxable under
forward charge.
As per section 13 of the CGST Act, 2017, the time of supply of services
taxable under forward charge is –
 Date of issue of invoice or date of receipt of payment, whichever is
earlier, if the same is issued within 30 days from the date of supply
of service;
OR
 Date of provision of service or date of receipt of payment,
whichever is earlier, if the invoice is not issued within 30 days from
17
 the date of supply of service.
Thus, in case of services, if the supplier receives any payment before
the provision of service or before the issuance of invoice for such
service, the time of supply gets fixed at that point in time and the liability
to pay tax on such payment arises. However, the tax can be paid by the
due date prescribed with reference to such time of supply.
As regards time of supply of goods taxable under forward charge is
concerned, Notification No. 66/2017 CT dated 15.11.2017 provides that
a registered person (excluding composition supplier) should pay GST on
the outward supply of goods at the time of supply as specified in section
12(2)(a), i.e. date of issue of invoice or the last date on which invoice
ought to have been issued in terms of section 31. Therefore, in case of
goods, tax is not payable on receipt of advance payment.
(b) In accordance with section 37(1) of CGST Act, 2017, GSTR-1 for a
particular tax period is filed on or before the 10th day of the immediately
succeeding tax period. In other words, GSTR-1 of a month/quarter can
be filed any time between 1st and 10th day of the succeeding
month/quarter. The due date of filing GSTR-1 may be extended by the
Commissioner/ Commissioner of State GST/ Commissioner of UTGST
for a class of taxable persons by way of a notification.
So, the statement is partially valid.
A taxpayer cannot file Form GSTR-1 before the end of the current tax
period. However, following are the exceptions to this rule:
a. Casual taxpayers, after the closure of their business.
b. Cancellation of GSTIN of a normal taxpayer.
A taxpayer who has applied for cancellation of registration will be allowed
to file Form GSTR-1 after confirming receipt of the application.

18
 Mock Test Paper - Series II: December, 2024
Date of Paper: 9 th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP - I

PAPER – 1 : ADVANCED ACCOUNTING
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks)
Part I is compulsory.
Case Scenario
1. Excellence Ltd. is a Real Estate Company which constructs residential and
commercial projects for selling. The Company has commenced a new project
and the expenses incurred are as follows:
• The cost of land acquired for Project is ` 10 crore
• Cost of construction incurred is ` 25 crores.
• The Company also incurred cost of ` 10 lacs for various administrative
meetings in relation to planning of the building.
• The construction of building completed and at the end of the year 1, the
net realisable value of the building was ` 40 crore.
• At the beginning of the next year (year 2), the Company decided to use
the building as its corporate office.
• The Company further incurred ` 50 lacs for making necessary changes
in the structure for using it as corporate office in accordance with
government norms for commercial spaces. Without these changes the
office cannot be set up.
• Ignore the effect of depreciation, if any.
In view of above information, answer the following issues:
(i) At the end of Year 1, how the building should be classified:
(a) Inventory
(b) Investments
(c) Property, Plant and Equipment
(d) Intangible Asset

1
 (ii) At the end of Year 1, at value Project should be recognised:
(a) ` 40 Crore
(b) ` 35 Crore
(c) ` 35.10 Crore
(d) ` 25 Crore
(iii) At the end of Year 2, when the intention is to use the building as
corporate office, it should be classified as:
(a) Inventory
(b) Investments
(c) Property, Plant and Equipment
(d) Intangible Assets
(iv) At the end of Year 2, the Project should be valued at:
(a) ` 40 Crore
(b) ` 35.50 Crore
(c) ` 35.10 Crore
(d) ` 25 Crore
Multiple Choice Questions [4 MCQs of 2 Marks each:
Total 8 Marks]
2. Supercool ltd. is a manufacturing company, engaged in manufacturing eco -
friendly equipment. On April 1, 2023, the Company received a grant of ` 20
crore from the Government (which is 25% of the total capital of the Company)
for various purposes that the company deems fit and no repayment is required
to be made to Government.
The Company also borrowed ` 10 crore from financial Institutions and interest
paid on the same during the year is ` 1 lac.
The Company acquired plant and machinery from the funds for ` 10 crore and
` 1 crore was spent on its installation and assembly.
` 10 lacs were spent on professional fees necessary for installation and
operating of the machine. The Company also spent ` 50 lacs on revenue
expenditure.
The Plant and Machinery was ready for its intended use on September 30,
2023)
The depreciation on plant and machinery is charged @10%.
(i) The grant of ` 20 crores received by the Company should be presented
as:
(a) Grants related to Revenue
(b) Grants related to Specific Fixed Assets
(c) Capital Reserve
2
 (d) Other Income
(ii) At what value the plant and machinery acquired should be recognised
as at 31st March 2024:
(a) ` 11.10 Crore
(b) ` 11 Crore
(c) ` 10.54 Crore
(d) ` 11.60 Crore
(iii) The revenue expenditure of ` 50 lacs should be recognised as:
(a) Part of Plant and Machinery
(b) Part of Grant
(c) Revenue expenditure in the Profit and Loss
(d) Deducted from loan
(iv) Which of the following statement is true:
(a) Plant and Machinery has been acquired out of Government Grant
so the same should be disclosed at Nil value.
(b) Plant and Machinery belongs to Financial Institution
(c) Plant and Machinery belong to the Company and should be
recognised as its Property, Plant and Equipment
(d) Plant and Machinery should not be disclosed in the financial
statements of the Company at all
Multiple Choice Questions [4 MCQs of 2 Marks each:
Total 8 Marks]
3. Super Ltd., a manufacturing company, has the following summarized Balance
Sheet as of March 31, 2024:
Equity Shares of ` 10 each fully paid up: ` 17,00,000
Reserves & Surplus:
Revenue Reserve: ` 23,50,000
Securities Premium: ` 2,50,000
Profit & Loss Account: ` 2,00,000
Infrastructure Development Reserve: ` 1,50,000
Secured Loan:
9% Debentures: ` 38,00,000
Unsecured Loan: ` 8,50,000
Property, Plant & Equipment: ` 58,50,000
Current Assets: ` 34,50,000

3
 Super Ltd. plans to buy back 35,000 equity shares of ` 10 each fully paid up
on April 1, 2024, at ` 30 per share. The buyback is authorized by its articles,
and necessary resolutions have been passed. The payment for the buyback
will be made using the company's bank balance, which is part of its current
assets.
Answer the following questions based on the above information:
(i) As per The Companies Act, 2013 under Section 68 (2) the buy-back of
shares in any financial year must not exceed
(a) 20% of its total paid-up capital and free reserves
(b) 25% of its total paid-up capital and free reserves
(c) 25% of its total paid-up capital
(d) 20% of its total paid-up capital
(ii) How many shares can Super Ltd. buy back according to the Shares
Outstanding Test?
(a) 35,000 shares
(b) 42,500 shares
(c) 37,500 shares
(d) 54,375 shares
(iii) What is the maximum number of shares that can be bought back
according to the Resources Test?
(a) 35,000 shares
(b) 42,500 shares
(c) 37,500 shares
(d) 54,375 shares
(iv) According to the Debt Equity Ratio Test, what is the maximum number
of shares that can be bought back?
(a) 35,000 shares
(b) 42,500 shares
(c) 37,500 shares
(d) 54,375 shares
Multiple Choice Questions [4 MCQs of 2 Marks each:
Total 8 Marks]
4. Accounting Standard 19, Lease is applicable on following Leases:
(a) Lease agreements to explore for or use of natural resources, such as oil,
gas, timber metals and other mineral rights.
(b) Legal owner of an asset conveys to another party in return for a payment
or series of periodic payments, the right to use an asset for an agreed
period of time.
4
 (c) licensing agreements for items such as motion picture films, video
recordings, plays, manuscripts, patents and copyrights.
(d) lease agreements to use lands (2 Marks)
5. How should the dividend paid by the Company should be disclosed in the
Cash Flows Statement:
(a) Cash flows from Operating Activities
(b) Cash flows from Investing Activities
(c) Cash flows from Financing Activities
(d) No disclosure in Cash Flow Statement (2 Marks)
6. On 31st March 2024, Sri Radhey shyam Enterprise finds that the cost of a
partly finished unit on that date is ₹ 530. The unit can be finished in 20 24-25
by an additional expenditure of ₹ 310. The finished unit can be sold for ₹ 750
subject to payment of 8% brokerage on the selling price.
Sri Radhey shyam Enterprise seeks your advice regarding the amount at
which the unfinished unit should be valued as at 31st March, 2024 for
preparation of final accounts. the partly finished unit cannot be sold in semi -
finished form and its NRV is zero without processing it further.
(a) ` 470
(b) ` 380
(c) ` 500
(d) ` 440 (2 Marks)

PART II – Descriptive Questions (70 Marks)

Question No.1 is compulsory
Answer any four questions from the remaining five questions.
Wherever necessary, suitable assumptions may be made and indicated in
answer by the candidates. Working Notes should form part of the answer.
1. (a) State with reasons, how the following events would be dealt with in the
financial statements of Hari Ltd. for the year ended 31 st March, 2024
(accounts were approved on 25 th July, 2024):
(1) Negotiations with another company for acquisition of its business
was started on 21st January, 2024. Hari Ltd. invested ` 40 lakh on
22nd April, 2024.
(2) The company made a provision for bad debts @ 4% of its total
debtors (as per trend followed from the previous years). In the
second week of March 2024, a debtor for ` 2,50,000 had suffered
heavy loss due to an earthquake; the loss was not covered by any
insurance policy. In May, 2024 the debtor became bankrupt.

5
 (3) During the year 2023-24, Hari Ltd. was sued by a competitor for
` 13 lakhs for infringement of a trademark. Based on the advice of
the company's legal counsel, Hari Ltd. provided for a sum of ` 8
lakhs in its financial statements for the year ended 31 st March,
2024. On 26th May, 2024, the Court decided in favour of the party
alleging infringement of the trademark and ordered Hari Ltd. to pay
the aggrieved party a sum of ` 12 lakhs.
(4) Cashier of Hari Ltd. embezzled cash amounting to ` 3,00,000
during March, 2024. However the same comes to the notice of
Company management during August, 2024.
(5) Cheques dated 31 st March, 2024 collected in the month of April,
2024. All cheques are presented to the bank in the month of April,
2024 and are also realized in the same month in the normal course
after deposit in the bank.
(b) Honey Ltd. is in the process of developing a new production method.
During the financial year ended 31 st March, 2023, total expenditure
incurred on development of this production method was ` 98,00,000. On
1st Jan, 2023, the production method met the criteria as an intangible
asset and expenditure incurred till this date was ` 68,00,000. Further
expenditure incurred on the new method was ` 72,00,000 for the year
ended 31st March, 2024 and recoverable amount of the know how
embodied in the new method for this financial year is ` 52,00,000.
You are required to calculate:
(1) The carrying amount of the Intangible asset on 31 st March, 2023.
(2) The expenditure to be shown in Statement of Profit and Loss for
the year ended 31st March, 2024.
(3) The carrying amount of the Intangible asset on 31 st March, 2024.
(7 + 7 = 14 Marks)
2. (a) Exe Ltd. acquires 70% of equity shares of Zed Ltd. as on 31st March,
2024 at a cost of `70 lakhs. The following information is available from
the balance sheet of Zed Ltd. as on 31st March, 2024:
Particulars ` in lakhs
Property, plant and equipment 120
Investments 55
Current Assets 70
Loans & Advances 15
15% Debentures 90
Current Liabilities 50

6
 The following revaluations have been agreed upon (not included in the
above figures):
Property, plant and equipment Up by 20%
Investments Down by 10%
Zed Ltd. declared and paid dividend @ 20% on its equity shares as on
31st March, 2024 (Face value – `10 per share). Exe Ltd. purchased the
shares of Zed Ltd. @ ` 20 per share.
Calculate the amount of goodwill/capital reserve on acquisition of shares
of Zed Ltd.
(b) From the following data, determine Minority Interest on the date of
acquisition and on the date of consolidation in each case:
Case Subsidiary % of Cost Date of Acquisition Consolidation date
Company Share
Owned

01-01-2024 31-12-2024

Share Profit Share Profit

Capital and Capital and Loss
Loss A/c
A/c

` ` ` `

Case-i X 85% 1,85,000 1,35,000 60,000 1,35,000 70,000

Case-ii Y 70% 1,60,000 1,25,000 45,000 1,25,000 5,000

Case-iii Z 65% 83,000 25,000 5,000 25,000 5,000

Case-iv M 90% 60,000 45,000 20,000 45,000 40,000

Case-v N 100% 85,000 25,000 25,000 25,000 50,000

(7+7=14 Marks)
3. (a) Given the following information of Rainbow Ltd.
(i) On 15th November, goods worth ` 5,00,000 were sold on approval
basis. The period of approval was 4 months after which they were
considered sold. Buyer sent approval for 75% goods sold upto
31st January and no approval or disapproval received for the
remaining goods till 31 st March.
(ii) On 31st March, goods worth ` 2,40,000 were sold to Bright Ltd. but
due to refurnishing of their show-room being underway, on their
request, goods were delivered on 10th April.
(iii) Rainbow Ltd. supplied goods worth ` 6,00,000 to Shyam Ltd. and
concurrently agrees to re-purchase the same goods on 14 th April.

7
 (iv) Dew Ltd, used certain assets of Rainbow Ltd. Rainbow Ltd.
received ` 7.5 lakhs and ` 12 as interest and royalties respectively
from Dew Ltd. during the year 2023-24.
(v) On 25th December, goods of ` 4,00,000 were sent on consignment
basis of which 40% of the goods unsold are lying with the consignee
at the year-end on 31st March.
In each of the above cases, you are required to advise, with valid
reasons, the amount to be recognized as revenue under the provisions
of AS-9. (4 Marks)
(b) The following information of Rocky Ltd. as at March 31, 2024:
` in lacs
Fully paid equity shares of ` 10 each 500
Capital Reserve 6
12% Debentures 400
Debenture Interest Outstanding 48
Trade payables 165
Directors’ Remuneration Outstanding 10
Other Outstanding Expenses 11
Provisions 33
Assets
Goodwill 15
Land and Building 184
Plant and Machinery 286
Furniture and Fixtures 41
Inventory 142
Trade receivables 80
Cash at Bank 27
Discount on Issue of Debentures 8
Profits and Loss Account 390
The following scheme of internal reconstruction was framed, approved
by the Tribunal all the concerned parties and implemented:
(i) All the equity shares be converted into the same number of fully-
paid equity shares of ` 2.50 each.
(ii) Directors agree to forego their outstanding remuneration.
(iii) The debentureholders also agree to forego outstanding interest in
return of their 12% debentures being converted into 13%
debentures.
(iv) The existing shareholders agree to subscribe for cash, fully paid
equity shares of ` 2.50 each for ` 125 lacs.

8
 (v) Trade payables are given the option of either to accept fully-paid
equity shares of ` 2.50 each for the amount due to them or to accept
80% of the amount due in cash. Trade payables for ` 65 lacs accept
equity shares whereas those for ` 100 lacs accept ` 80 lacs in cash
in full settlement.
(vi) The Assets are revalued as under:
` in lacs
Land and building 230
Plant and Machinery 220
Inventory 120
Trade receivables 76
Pass Journal Entries for all the above mentioned transactions
immediately after the reconstruction. (10 Marks)
4. From the following particulars furnished by Hello Ltd., prepare the Balance
Sheet as on 31st March 2024 as required by Part I, Schedule III of the
Companies Act, 2013.
Particulars Debit ` Credit `
Equity Share Capital (Face value of 50,00,000
` 100 each)
Building 27,50,000
Plant & Machinery 26,25,000
Furniture 2,50,000
General Reserve 10,50,000
Loan from State Financial Corporation 7,50,000
Inventory:
Raw Materials 2,55,000
Finished Goods 10,00,000 12,55,000
Provision for Taxation 6,40,000
Trade receivables 10,00,000
Short term Advances 2,13,500
Profit & Loss Account 4,33,500
Cash in Hand 1,50,000
Cash at Bank 12,35,000
Unsecured Loan 6,05,000
Trade payables (for Goods and 10,00,000
Expenses)
The following additional information is also provided:
(i) 10,000 Equity shares were issued for consideration other than cash.
(ii) Trade receivables of ` 2,60,000 are due for more than 6 months.
9
 (iii) The cost of the Assets were:
Building ` 30,00,000, Plant & Machinery ` 35,00,000 and Furniture
` 3,12,500
(iv) The balance of ` 7,50,000 in the Loan Account with State Finance
Corporation is secured by hypothecation of Plant & Machinery.
(v) Balance at Bank includes ` 10,000 with Omega Bank Ltd., which is not
a Scheduled Bank.
(vi) Transfer ` 20,000 to general reserve as proposed by Board of directors.
(14 Marks)
5. A Limited and B Limited are carrying on business of same nature. On
31st March, 2024 the information given by both these companies is as follows:
A Ltd. (`) B Ltd. (`)
Share Capital
- Equity Shares 10 each (Fully Paid) 12,00,000 7,20,000
- 10% Preference Shares of ` 100 each 6,00,000 -
- 8% Preference Shares of ` 100 each - 5,00,000
General Reserve 3,00,000 2,50,000
Investment Allowance Reserve - 60,000
Security Premium 2,40,000 -
Export Profit Reserve 1,80,000 1,20,000
Profit & Loss Account 2,16,000 1,92,000
9% Debentures (` 10 each) 3,00,000 2,00,000
Secured Loan - 3,60,000
Sundry Creditors 3,12,000 2,04,000
Bills Payable 75,000 1,00,000
Other Current Liabilities 50,000 75,000
Land and Building 10,80,000 8,40,000
Plant and Machinery 6,00,000 5,60,000
Office Equipment 3,45,000 2,10,000
Investments 96,000 3,00,000
Inventory 6,30,000 4,20,000
Sundry Debtors 4,90,000 3,20,000
Bills Receivables 60,000 70,000
Cash at Bank 1,72,000 61,000
A Limited take over B Limited on the above date, both companies agreeing on
a scheme of Amalgamation on the following terms:
(a) A Limited will issue 80,000 Equity Shares of ` 10 each at par to the
Equity Shareholders of B Limited.
10
 (b) A Limited will issue 10% Preference Shares of ` 100 each to discharge
the Preference Shareholders of B Limited at 15% premium in such a way
that the existing dividend quantum of the preference shareholders of B
Limited will not get affected.
(c) The Debentures of B Limited will be converted into equivalent number of
Debentures of A Limited.
(d) All the Bills Receivable of A Limited were accepted by B Limited.
(e) A contingent liability of B Limited amounting to ` 72,000 to be treated as
actual liability in trade payables.
(f) Expenses of Amalgamation amounted to ` 12,000 were borne by A
Limited.
You are required to pass opening Journal Entries in the books of A Limited
and prepare the opening Balance Sheet of A Limited as on 1 st April, 2024 after
amalgamation, assuming that the amalgamation is in the nature of Merger.
(14 Marks)
6. (a) “One of the characteristics of financial statements is neutrality”- Do you
agree with this statement?
Or
What do you mean by Carve outs/ins in Ind AS? Explain. (4 Marks)
(b) “The company has not made provision for warrantee in respect of certain
goods considering that the company can claim the warranty cost from
the original supplier”.
You are required to comment in line with the provisions of AS 29.
(6 Marks)
(c) Why goods are marked on invoice price by the head office while sending
goods to the branch? (4 Marks)

11
 Mock Test Paper - Series II: December, 2024
Date of Paper: 9 th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 1 : ADVANCED ACCOUNTING
ANSWERS
1. (i) (a)
(ii) (b)
(iii) (c)
(iv) (b)
2. (i) (c)
(ii) (c)
(iii) (c)
(iv) (c)

3. (i) (b)
(ii) (b)
(iii) (c)
(iv) (d)
4. (b)
5. (c)
6. (b)

PART II – Descriptive Questions (70 Marks)

1. (a) (i) As per AS 4‘Contingencies and Events Occurring After the Balance
Sheet Date’, disclosure should be made in the report of the
approving authority of those events occurring after the balance
sheet date that represent material changes and commitments
affecting the financial position of the enterprise, the investment of
` 40 lakhs in April, 2024 in the acquisition of another company
should be disclosed in the report of the Board of Directors to enable
users of financial statements to make proper evaluations and
decisions.
(ii) As per AS 4, adjustment to assets and liabilities are required for
events occurring after the balance sheet date that provide
additional information materially affecting the determination of the
1
 amounts relating to conditions existing at the Balance Sheet date.
A debtor for ` 2,50,000 suffered heavy loss due to earthquake in
the second week of March, 2024 which was not covered by
insurance. This information with its implications was already known
to the company. The fact that he became bankrupt in May, 2024
(after the balance sheet date) is only an additional information
related to the existing condition on the balance sheet date.
Accordingly, full provision for bad debts amounting ` 2,50,000
should be made, to cover the loss arising due to the insolvency of
a debtor, in the final accounts for the year ended 31st March 2024.
(iii) As per AS 4, adjustments to assets and liabilities are required for
events occurring after the balance sheet date that provide
additional information materially affecting the determination of the
amounts relating to conditions existing at the balance sheet date.
In the given case, since Hari Ltd. was sued by a competitor for
infringement of a trademark during the year 2023-24 for which the
provision was also made by it, the decision of the Court on 26 th
May, 2024, for payment of the penalty will constitute as an adjusting
event because it is an event occurred before approval of the
financial statements. Therefore, Hari Ltd. should adjust the
provision upward by ` 4 lakhs to reflect the award decreed by the
Court to be paid by them to its competitor.
(iv) As the embezzlement of cash comes to the notice of company
management only after approval of financial statements by board
of directors of the company, then the treatment will be done as per
the provisions of AS 5 “Net Profit or Loss for the Period, Prior Period
Items and Changes in Accounting Policies” and the same will not
be adjusted in the financial statements for the year ended 31st
March, 2024. This being an extra-ordinary item should be disclosed
in the statement of profit and loss as a part of loss for the year
ending March, 2025, in a manner, that its impact on current profit
or loss can be perceived.
(v) Collection of cheques after balance sheet date is not an adjusting
event even if the cheques bear the date of 31st March. Recognition
of cheques in hand is therefore not consistent with requirements of
AS 4. Moreover, the collection of cheques after balance sheet date
does not represent any material change or commitments affecting
financial position of the enterprise and no disclosure of such
collections in the Directors’ Report is necessary.
(b) As per AS 26 ‘Intangible Assets’
(i) Carrying value of intangible asset as on 31.03.2023
At the end of financial year, on 31st March 2023, the production
process will be recognized (i.e. carrying amount) as an intangible
asset at a cost of ` 30 (98-68) lacs (expenditure incurred since
the date the recognition criteria were met, i.e., from 1st January,
2023).
2
 (ii) Expenditure to be charged to Profit and Loss account for the
year ended 31.03.2024
(` in lacs)
Carrying Amount as on 31.03.2023 30
Expenditure during 2023–2024 72
Book Value 102
Recoverable Amount (52)
Impairment loss 50
` 50 lakhs to be charged to Profit and loss account for the year
ending 31.03.2024.
(iii) Carrying value of intangible asset as on 31.03.2024
(` in
lacs)
Book Value 102
Less: Impairment loss (50)
Carrying amount as on 31.03.2024 52
2. (a) Revalued net assets of Zed Ltd. as on 31.03.2024
Particulars ` in ` in
lakhs lakhs
Property Plant & Equipment [120 × 120%] 144.0
Investments [55 × 90%] 49.5
Current Assets 70.0
Loans & Advances 15.0
Total Assets after revaluation 278.5
Less: 15% Debentures 90.0
Current Liabilities 50.0 (140.0)
Equity / Net Worth 138.50
Exe Ltd.’s share of net assets (70% of 96.95
138.50)
Exe Ltd.’s cost of acquisition of shares of 63.00
Zed Ltd.
(` 70 lakhs – 7 lakhs*)
Capital Reserve 33.95
*Total Cost of 70% Equity of Zed Ltd. ` 70 lakhs
Purchase Price of each share ` 20
Number of shares purchases(70 lakhs/20) 3.50 lakhs
Dividend @ 20% i.e. ` 2/share ` 7 lakhs

3
 Since, dividend received is for pre-acquisition period, it has been
reduced from the cost of investment in the subsidiary company.
(b) Minority Interest = Equity attributable to minorities
Equity is the residual interest in the assets of an enterprise after
deducting all its liabilities i.e. in this case, it should be equal to Share
Capital + Profit & Loss A/c
A = Share capital on 1.1.2024
B = Profit & loss account balance on 1.1.2024
C = Share capital on 31.12.2024
D = Profit & loss account balance on 31.12.2024
Minority % Minority Minority
Shares interest as at interest as at
Owned the date of the date of
acquisition consolidation
[E] [E] x [A + B] ` [E] X [C + D]
`
Case i [100-85] 15% 29,250 30,750
Case ii [100-70] 30% 51,000 39,000
Case iii [100-65] 35% 10,500 10,500
Case iv [100-90] 10% 6,500 8,500
Case v [100-100] NIL NIL NIL
3. (a) (i) As per AS 9 “Revenue Recognition”, in case of goods sold on
approval basis, revenue should not be recognized until the goods
have been formally accepted by the buyer or the buyer has done
an act adopting the transaction or the time period for rejection has
elapsed or where no time has been fixed, a reasonable time has
elapsed. Therefore, revenue should be recognized for the total
sales amounting ` 5,00,000 as the time period for rejecting the
goods had expired.
(ii) The sale is complete but delivery has been postponed at buyer’s
request. The entity should recognize the entire sale of ` 2,40,000
for the year ended 31st March.
(iii) Sale/repurchase agreements i.e. where seller concurrently agrees
to repurchase the same goods at a later date, such transactions
that are in substance a financing agreement, the resulting cash
inflow is not revenue as defined and should not be recognized as
revenue. Hence no revenue to be recognized in the given case.
(iv) Revenue arising from the use by others of enterprise resources
yielding interest and royalty should be recognized when no
significant uncertainty as to measurability or collectability exists.
The interest should be recognized on time proportion basis taking

4
 into account the amount outstanding and rate applicable. The
royalty should be recognized on accrual basis in accordance with
the terms of relevant agreement.
(v) 40% goods lying unsold with consignee should be treated as
closing inventory and sales should be recognized for ` 2,40,000
(60% of ` 4,00,000). In case of consignment sale revenue should
not be recognized until the goods are sold to a third party.
(b) Journal Entries
` in
lacs
Dr. Cr.
Equity Share Capital (` 10 each) A/c Dr. 500
To Equity Share Capital (` 2.50 each) A/c 125
To Reconstruction A/c 375
(Conversion of all the equity shares into the
same number of fully paid equity shares of
` 2.50 each as per scheme of reconstruction)
Director’s Remuneration Outstanding A/c Dr. 10
To Reconstruction A/c 10
(Outstanding remuneration foregone by the
directors as per scheme of reconstruction)
12% Debentures A/c Dr. 400
Debenture Interest Outstanding A/c Dr. 48
To 13% Debentures A/c 400
To Reconstruction A/c 48
(Conversion of 12% debentures into 13%
debentures, Debenture holders forgoing
outstanding debenture interest)
Bank A/c Dr. 125
To Equity Share Application A/c 125
(Application money received for fully paid
equity shares of ` 2.5 each from existing
shareholders)
Equity Share Application A/c Dr. 125
To Equity Share Capital (` 2.50 each) A/c 125
(Application money transferred to share
capital)
Trade payables A/c Dr. 165
To Equity Share Capital (` 2.50 each) A/c 65
To Bank A/c 80

5
 To Reconstruction A/c 20
(Trade payables for ` 65 lakhs accepting
shares for full amount and those for ` 100
lakhs accepting cash equal to 80% of claim in
full settlement)
Land and Building A/c Dr. 46
To Reconstruction A/c 46
(Appreciation made in the value of land and
building as per scheme of reconstruction)
Reconstruction A/c Dr. 505
To Goodwill A/c 15
To Plant and Machinery A/c 66
To Inventory A/c 22
To Trade receivables A/c 4
To Discount on issue of Debentures A/c 8
To Profit and Loss A/c 390
(Writing off losses and reduction in the values
of assets as per scheme of reconstruction—
W.N. 1)
Capital Reserve A/c Dr. 6
To Reconstruction A/c 6
(Being the loss on reconstruction (balance in
the Reconstruction A/c) transferred to Capital
Reserve)
Note: In a scheme of Reconstruction, Goodwill, Losses etc should be
written off against the Reconstruction Account whether or not it is
mentioned in the question.
4. (a) Hello Ltd.
Balance Sheet as at 31st March, 2024
Particulars Notes `
Equity and Liabilities
1 Shareholders' funds
A Share capital 1 50,00,000
B Reserves and Surplus 2 14,83,500
2 Non-current liabilities
Long-term borrowings 3 13,55,000
3 Current liabilities
A Trade Payables 10,00,000
B Short-term provisions 4 6,40,000

6
 Total 94,78,500
Assets
1 Non-current assets
Property, Plant & equipment 5 56,25,000
2 Current assets
A Inventories 6 12,55,000
B Trade receivables 7 10,00,000
C Cash and Cash Equivalents 8 13,85,000
D Short-term loans and advances 2,13,500
Total 94,78,500
Notes to accounts
`
1 Share Capital
Equity share capital
Issued & subscribed & called up
50,000 Equity Shares of ` 100 each 50,00,000
(of the above 10,000 shares have been
issued for consideration other than
cash)
2 Reserves and Surplus
General Reserve 10,50,000
Add: current year transfer 20,000 10,70,000
Profit & Loss balance
Profit for the year 4,33,500
Less: Appropriations:
Transfer to General reserve (20,000)
4,13,500
14,83,500
3 Long-term borrowings
Secured Term Loan
State Financial Corporation Loan
(Secured by hypothecation of Plant 7,50,000
and Machinery)
Unsecured Loan 6,05,000
Total 13,55,000
4 Short-term provisions
Provision for taxation 6,40,000
5 Property, plant and Equipment

7
 Building 30,00,000
Less: Depreciation (2,50,000) 27,50,000
(b.f.)
Plant & Machinery 35,00,000
Less: Depreciation (8,75,000) 26,25,000
(b.f.)
Furniture & Fittings 3,12,500
Less: Depreciation (62,500) (b.f.) 2,50,000
Total 56,25,000
6 Inventories
Raw Materials 2,55,000
Finished goods 10,00,000
Total 12,55,000
7 Trade receivables
Outstanding for a period exceeding six 2,60,000
months
Other Amounts 7,40,000
Total 10,00,000
8 Cash and Cash Equivalents
Cash at bank
with Scheduled Banks 12,25,000
with others (Omega Bank Ltd.) 10,000 12,35,000
Cash in hand 1,50,000
Other bank balances Nil
Total 13,85,000
5. Journal Entries in the books of A Ltd.
Particulars Debit Credit
` `
Business purchase A/c (W.N.1) Dr. 13,75,000
To Liquidator of B Ltd. 13,75,000
(Being business of B Ltd. taken over)
Land & Building A/c Dr. 8,40,000
Plant and machinery A/c Dr. 5,60,000
Office equipment A/c Dr. 2,10,000
Investments A/c Dr. 3,00,000
Inventory A/c Dr. 4,20,000
Debtors A/c Dr. 3,20,000
Bills receivables A/c Dr. 70,000

8
 Bank A/c Dr. 61,000
To General reserve A/c (W.N.2) 95,000
(2,50,000-1,55,000)
To Export profit reserve A/c 1,20,000
To Investment allowance reserve 60,000
A/c
To Profit and loss A/c 1,20,000
To Liability for 9% Debentures A/c 2,00,000
(` 100 each)
To Secured Loan 3,60,000
To Trade creditors A/c 2,76,000
To Bills payables A/c 1,00,000
To Other current liabilities A/c 75,000
To Business purchase A/c 13,75,000
(Being assets and liabilities taken over)
Liquidator of B Ltd. Dr. 13,75,000
To Equity share capital A/c 8,00,000
To 10% Preference share capital 4,00,000
A/c
To Securities premium A/c 1,75,000
(Being purchase consideration
discharged)
General Reserve* A/c Dr. 12,000
To Cash at bank 12,000
(Being expenses of amalgamation
paid)
Liability for 9% Debentures in B Ltd. A/c Dr. 2,00,000
To 9% Debentures A/c 2,00,000
(Being debentures in B ltd. discharged
by issuing own 9% debentures)
Bills payables A/c Dr. 60,000
To Bill receivables A/c 60,000
(Cancellation of mutual owing on
account of bills of exchange)
*Alternatively, profit & loss A/c may be debited in place of general reserve A/c.
Opening Balance Sheet of A Ltd. (after absorption)
as at 1st April, 2024
Particulars Notes `
Equity and Liabilities
9
1 Shareholders' funds
a Share capital 1 30,00,000
b Reserves and Surplus 2 14,94,000
2 Non-current liabilities
a Long-term borrowings 3 8,60,000
3 Current liabilities
a Trade Payables 4 7,03,000
b Other current liabilities 5 1,25,000
Total 61,82,000
Assets
1 Non-current assets
a PPE 6 36,35,000
b Investments 7 3,96,000
2 Current assets
a Inventories 8 10,50,000
b Trade receivables 9 8,80,000
c Cash and cash equivalents 10 2,21,000
Total 61,82,000
Notes to accounts
`
1 Share Capital
Equity share capital
2,00,000 Equity shares of ` 10 each
(Out of above, 80,000 shares were 20,00,000
issued for consideration other than
cash)
Preference share capital
10,000 10% Preference shares of ` 100
each
10,00,000
(Out of above, 4,000 shares were issued
for consideration other than cash)
Total 30,00,000
2 Reserves and Surplus
General Reserve
Opening balance 3,00,000
Add: Adjustment under scheme of
95,000
amalgamation
10
 Less: Amalgamation expense paid (12,000) 3,83,000
Securities premium
4,15,000
(2,40,000 + 1,75,000)
Export profit reserve
Opening balance 1,80,000
Add: Adjustment under scheme of
1,20,000 3,00,000
amalgamation
Investment allowance reserve 60,000
Profit and loss account
Opening balance 2,16,000
Add: Adjustment under scheme of
1,20,000 3,36,000
amalgamation
Total 14,94,000
3 Long-term borrowings
Secured
9% Debentures 3,00,000
Add: Adjustment under scheme of
2,00,000
amalgamation
Secured loan 3,60,000 8,60,000
4 Trade payables
Creditors: Opening balance 3,12,000
Add: Adjustment under scheme of
2,76,000 5,88,000
amalgamation
Bills Payables: Opening balance 75,000
Add: Adjustment under scheme of
1,00,000
amalgamation
Less: Cancellation of mutual owning
(60,000) 1,15,000
upon amalgamation
7,03,000
5 Other current liabilities
Opening balance 50,000
Add: Adjustment under scheme of
75,000 1,25,000
amalgamation
6 PPE
Land & Building- Opening balance 10,80,000
Add: Adjustment under scheme of
8,40,000 19,20,000
amalgamation
Plant and machinery- Opening balance 6,00,000
Add: Adjustment under scheme of
5,60,000 11,60,000
amalgamation
11
 Office equipment-Opening balance 3,45,000
Add: Adjustment under scheme of
2,10,000 5,55,000
amalgamation
Total 36,35,000
7 Investments
Opening balance 96,000
Add: Adjustment under scheme of
3,00,000 3,96,000
amalgamation
8 Inventories
Opening balance 6,30,000
Add: Adjustment under scheme of
4,20,000 10,50,000
amalgamation
9 Trade receivables
Debtors: Opening balance 4,90,000
Add: Adjustment under scheme of
3,20,000 8,10,000
amalgamation
Bills Payables: Opening balance 60,000
Add: Adjustment under scheme of
70,000
amalgamation
Less: Cancellation of mutual owning
(60,000) 70,000
upon amalgamation
Total 8,80,000
10 Cash and cash equivalents
Opening balance 1,72,000
Add: Adjustment under scheme of
61,000
amalgamation
Less: Amalgamation expense paid (12,000) 2,21,000
Working Notes:
1. Calculation of purchase consideration
`
Equity shareholders of B Ltd. (80,000 x ` 8,00,000
10)
Preference shareholders of B Ltd. (5,00,000 5,75,000
x 115%)
Purchase consideration would be 13,75,000
2. Amount to be adjusted from general reserve
The difference between the amount recorded as share capital
issued and the amount of share capital of transferor company
should be adjusted in General Reserve.

12
 Thus, General reserve will be adjusted as follows:
`
Purchase consideration 13,75,000
Less: Share capital issued (` 7,20,000 + (12,20,000)
` 5,00,000)
Amount to be adjusted from general reserve 1,55,000
3. Calculation of balances of Profit & Loss and Sundry Creditors
of B Limited to be taken over by A Limited
P&L Creditors
(` ) (` )
Balance as per Balance Sheet of B 1,92,000 2,04,000
Limited
Less / Add: Contingent Trade Payable (72,000) 72,000
treated as Actual Liability
Taken by A Limited 1,20,000 2,76,000
6. (a) Yes, one of the characteristics of financial statements is neutrality. To
be reliable, the information contained in financial statement must be
neutral, that is free from bias. Financial Statements are not neutral if by
the selection or presentation of information, the focus of analysis could
shift from one area of business to another thereby arriving at a totally
different conclusion on the business results.
Or
Certain changes have been made in Ind AS considering the economic
environment of the country, which is different as compared to the
economic environment presumed to be in existence by IFRS. These
differences are due to differences in economic conditions prevailing in
India. These differences which are in deviation to the accounting
principles and practices stated in IFRS, are commonly known as ‘Carve-
outs’. Additional guidance given in Ind AS over and above what is given
in IFRS, is termed as ‘Carve in’.
(b) As per provisions of AS 29 “Provisions, Contingent Liabilities and
Contingent Assets”, where some or all of the expenditure required to
settle a provision is expected to be reimbursed by another party, the
reimbursement should be recognized when, and only when, it is virtually
certain that reimbursement will be received if the enterprise settles the
obligation. The reimbursement should be treated as a separate asset.
The amount recognized for the reimbursement should not exceed the
amount of the provision.
It is apparent from the question that the company had not made provision
for warranty in respect of certain goods considering that the company
can claim the warranty cost from the original supplier. However, the
provision for warranty should have been made as per AS 29 and the
amount claimable as reimbursement should be treated as a separate
13
 asset in the financial statements of the company rather than omitting the
disclosure of such liability. Accordingly, it can be said that the
accounting treatment adopted by the company with respect to warranty
is not correct.
(c) Goods are marked on invoice price to achieve the following objectives:
(i) To keep secret from the branch manager, the cost price of the
goods and profit made, so that the branch manager may not start a
rival and competitive business with the concern; and
(ii) To have effective control on stock i.e. stock at any time must be
equal to opening stock plus goods received from head office minus
sales made at branch.
(iii) To dictate pricing policy to its branches, as well as save work at
branch because prices have already been decided.

14
 Mock Test Paper - Series II: December, 2024
Date of Paper: 10th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.

PART I – Case Scenario based MCQs (30 Marks)

Part I is compulsory
Case Scenario 1
Mr. V started a new venture of on-line business of supply of grocery items at the
door- step of consumers. Initially it was having the area of operations of
Saharanpur city only. He employed some young boys having their own bikes and
allocated the areas which they were accustomed of it, for making delivery of the
grocery items as per their orders. He also got developed a website and Mobile App
to receive the orders on-line. His friend Sundaram who is a Chartered Accountant,
suggested him to corporatize this business form, from proprietorship business to a
One Person Company (OPC). Mr. V agreed and a OPC was incorporated in the
name of “Ask V Online Grocery (OPC) Pvt Ltd.” (for short OPC-1). In this OPC Mr.
V became the member and director and Sudha (the mother of Mr. V) was made as
nominee.
After a year Mr. V got married with Vani. Since the business of on-line supply of
grocery was on rising trend, day by day, he thought to start a new business of
supply of Milk and Milk Products and another OPC in the name of “Vani Milk
Products (OPC) Pvt Ltd” (for short OPC-2) was incorporated with the help of his
professional friend Sundaram. In this OPC-2, Vani (his wife) became the member
and director and Mr. V was named as Nominee.
To summarise the position, the information is tabulated as under:
Name of OPC Ask Mr. V4Online Vani Milk Products
Grocery (OPC) Pvt Ltd (OPC) Pvt Ltd [OPC-2]
[OPC-1]
Member and Mr. V Vani
Director
Nominee Sudha (Mother of Mr. V) Mr. V (Husband of Vani)

1
After some time, Sudha (the mother of Mr. V) passed away. However, before the
death, Sudha had made a WILL, in which she mentioned that after her demise, her
another son Krishh be made nominee in the OPC-1. When Krishh came to know
this fact, he argued with Mr. V to fulfil the wish of Sudha as per her WILL (Mother
of Mr. V and Krishh), but Mr. V denied this and appointed Vani (his wife) as
nominee.
Aggrieved from the decision of Mr. V for not nominating him (Krishh), Krishh
threatened Mr. V to take appropriate legal action against him for not honouring the
WILL of Sudha and consulted his lawyer. Meanwhile due to continuous threatening
and unpleasant conversation between Krishh and Mr. V, Vani became mentally
upset and became insane, as certified by the medical doctor, so lost her capacity
to contract. In this situation, Mr. V being the nominee in OPC-2 became member
and director of this OPC-2.
One of the friends of Mr. V advised him to do some charitable work of providing
free education to the girl children of his native village near by Saharanpur. Mr. V
thought about this proposal and asked his professional friend Sundaram to convert
this OPC-2 into Section 8 company.
On the basis of above facts and by applying applicable provisions of the Companies
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of
four) of the following Multiple Choice Questions (MCQs 1-5, of 2 marks each) given
herein under:
1. Since Vani, being insane, lost the capacity to contract, Mr. V (who was
nominee) became the member of OPC-2. Now who will make nomination for
this OPC:
(a) Mr. V in the capacity of husband of Vani can nominate any person as
Nominee of OPC-2
(b) Mr. V (who was nominee) of OPC-2 has now become member of this
OPC and now as a member of this OPC he can nominate any person as
per his choice as Nominee for this OPC.
(c) When no person is nominated, the Central Govt. will make nomination
of such OPC-2.
(d) When no person is nominated the Registrar shall order the company to
be wound up.
2. Whether conversion of OPC-2 into a company governed by Section 8 is
permissible?
(a) Yes, OPC can be converted into Section 8 company
(b) No, OPC cannot be converted into Section 8 company
(c) This OPC-2 can be converted into section 8 company, provided the
Central Govt give license
(d) Providing of free education to girl child do not come under the specified
objects mentioned for eligibility incorporation of section 8 company

2
3. Mr. V is a member in OPC-1 and became a member in another OPC-2 (on 2nd
April, 2024) by virtue of his being a nominee in that OPC-2. Mr. V shall, by
what date, meet the eligibility criteria that an individual can be a member in
only one OPC:
(a) 17th May 2024
(b) 25th August 2024
(c) 26th August 2024
(d) 29th September 2024
4. After the demise of Sudha (the mother of Mr. V), Vani was nominated by
Mr. V for OPC-1 as Nominee. But now Vani has become insane, so what
recourse you will suggest to Mr. V:
(a) Mr. V is required to nominate another person as nominee
(b) Mr. V should wait till Vani becomes good of her health and able to have
the capacity to contract
(c) Although Vani has become insane, but if she is able to sign, her
nomination in OPC-1 may continue
(d) Sundaram (the Chartered Accountant) who helped in incorporation of
OPC-1, may act as legal consultant on behalf of Vani
5. Mr. V is preparing the financial statements for "Ask V Online Grocery (OPC)
Pvt Ltd" for the financial year. Which of the following statements is correct
regarding compliance with section 129 of the Companies Act, 2013?
(a) Financial statements of OPC-1 must include a cash flow statement.
(b) The financial statements must be presented and approved by a general
meeting of members.
(c) Mr. V, as the sole director, is responsible for approving the financial
statements before filing with the RoC.
(d) Consolidated financial statements must be prepared for OPC-1.
Case Scenario 2
DEF LLP is a well-established limited liability partnership engaged in providing
consulting services. It has four partners: A, B, C, and D, each contributing equally
to the capital and holding an equal share of the profits and losses, as detailed in
the LLP agreement. The partnership operates smoothly until Partner A encounters
significant financial difficulties due to personal business losses and decides to
transfer his entire share of profits and losses in the LLP to Mr. X, an external
investor, in exchange for financial assistance. The decision, although legal as per
the LLP agreement, creates a ripple of concerns among the other partners.
After the transfer:
• Partner B argues that the LLP must be dissolved because Partner A’s transfer
of rights effectively amounts to exiting the partnership, thus impacting the
continuity of the LLP.

3
• Mr. X, being the transferee, demands active participation in DEF LLP’s
decision-making processes and insists on accessing financial records to
monitor his investment, citing the substantial stake he now holds in the LLP.
• Partner C voices concerns about the potential disruption in the LLP's
management structure and operations, questioning whether Mr. X’s
involvement aligns with the LLP’s existing framework and the provisions of the
Limited Liability Partnership Act, 2008.
• Partner D, on the other hand, adopts a neutral stance but raises the issue of
whether the LLP agreement sufficiently addresses such transfers to avoid
future disputes.
The situation creates a complex dynamic within DEF LLP, raising questions about
the rights of the transferee, the implications for the partnership's operations, and
the legal provisions governing such transfers under the Limited Liability Partnership
(LLP) Act, 2008.
On the basis of above facts and by applying applicable provisions of the Limited
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 6-8, of
2 marks each) given herein under:
6. Can Partner A legally transfer their share of profits and losses to Mr. X?
(a) No, Partner A cannot transfer their share without the consent of all other
partners.
(b) Yes, Partner A can transfer their share entirely in accordance with the
LLP agreement.
(c) No, such transfers are not allowed under the LLP Act.
(d) Yes, but only if Mr. X becomes a partner in the LLP.
7. Does the transfer of Partner A’s share to Mr. X result in the dissolution of DEF
LLP?
(a) Yes, because transferring all rights indicates Partner A’s disassociation.
(b) No, because the LLP Act, 2008 does not consider such transfers as
grounds for dissolution.
(c) Yes, because all partners must agree to such transfers to avoid
dissolution.
(d) No, unless it is explicitly stated in the LLP agreement.
8. Does Mr. X gain any right to participate in DEF LLP’s management or access
its financial records?
(a) Yes, as he now holds Partner A’s share in the LLP.
(b) No, unless expressly allowed by the LLP agreement.
(c) Yes, because it is essential to safeguard his investment.
(d) Yes, as external transferees are automatically included in LLP
management.
4
Case Scenario 3
Sunrise Technologies Private Limited ("STPL") was in process of establishing its
new software development center in Pune. On 28th February, 2024, the Board of
Directors passed a resolution to purchase a property consisting of:

• A three-storey building
• 25 acres of agricultural land adjacent to the building
• 100 motor cars
• An orchard with 100 fruit-bearing trees
The company received a government notification dated 15th March, 2024, requiring
all new technology centers to obtain special clearance within 45 days of
establishment. The notification mentioned that existing orders under the previous
Technology Parks Act (which was repealed and replaced by new legislation) would
continue to remain valid. The notification was to be served to all concerned parties
through registered post.
The Managing Director has approached you to understand various legal aspects
under the General Clauses Act, 1897.
On the basis of above facts and by applying applicable provisions of the General
Clauses Act, 1897, choose the correct answer (one out of four) of the following
Multiple Choice Questions (MCQs 9-11, of 2 marks each) given herein under:
9. With respect to the property being purchased by STPL, which of the following
would not qualify as "immovable property" under the General Clauses Act,
1897?
(a) The orchard with fruit-bearing trees
(b) Motor Cars
(c) The three-storey building
(d) The agricultural land
10. The government notification requires clearance "within 45 days". If the
notification was received on 20th March, 2024, and the 45th day falls on
Sunday, May 4, 2024, what would be the last date for obtaining clearance?
(a) 3rd May, 2024
(b) 4th May, 2024
(c) 5th May, 2024
(d) 6th May, 2024
11. Concerning the previous orders under the repealed Technology Parks Act,
which statement is correct?
(a) All previous orders automatically become void
(b) Previous orders continue to be valid unless explicitly cancelled
(c) Previous orders require fresh validation under new law
5
 (d) Previous orders are valid for only 6 months after repeal
Independent case scenarios
12. The Annual General Meeting (AGM) of Green Limited was held on 31.8.2024.
Suppose the Chairman of the company after two days of AGM went abroad
for next 31 days. Due to the unavailability of the Chairman, within time period
prescribed for submission of copy of report of AGM with the registrar, the
report as required was signed by two Directors of the company, of which one
was additional Director of the company. Comment on the signing of this report
of AGM.
(a) Yes, the signing is in order as the report can be signed by any director
in the absence of Chairman.
(b) No, the signing is not in order as only the Chairman is authorised to sign
the report
(c) Yes, the signing is in order, as in the absence of Chairman at least two
directors should sign the report.
(d) No, the signing is not in order, since in case the Chairman is unable to
sign, the report shall be signed by any two directors of the company, one
of whom shall be the Managing director, if there is one and company
secretary of the company. (2 Marks)
13. Sneha, a resident of India, wants to invest her savings. She considers buying
shares of a US-based company to benefit from the growing tech market. She
is unsure if such an investment is allowed under the Foreign Exchange
Management Act, 1999.
Advise whether Sneha can invest in shares of the US-based company?
(a) Yes, such investments are allowed.
(b) No, such investments are not allowed.
(c) Yes, but only if the investment is for US$ 5000.
(d) No, unless she is a non-resident Indian (NRI). (2 Marks)
14. Rahul, a resident of India and an avid horse-racing enthusiast, earns ₹ 5 lakh
as prize money from an international horse-racing event held in Dubai. He
wants to remit this amount to his personal foreign bank account for future
international race entries and training. He consults his banker to confirm if this
transaction is permissible under the Foreign Exchange Management Act
(FEMA), 1999.
Can Rahul remit his income from the international horse-racing event to his
foreign bank account under FEMA, 1999?
(a) Yes, as it is his earned income.
(b) No, as remittance of income from racing, riding, or any other hobby is
prohibited.
(c) Yes, but only with prior approval from the Reserve Bank of India (RBI).
(d) No, unless it is for charitable purposes. (2 Marks)
6
15. Mr. Mudit works as an employee at ABC Private Limited with an annual salary
of ₹3,00,000, as specified in his employment contract. Mr. Mudit paid to the
company ₹ 3,50,000 in the nature of non-interest bearing security deposit.
Giving regard to the provisions of the Companies Act, 2013, choose the
correct option out of the following:
(a) The deposit is a valid transaction since it is a non-interest-bearing
security deposit provided under the terms of his employment.
(b) The deposit violates the Companies Act, 2013, because companies
cannot accept deposits from their employees.
(c) The deposit violates the Companies Act, 2013, as the amount exceeds
Mr. Mudit’s annual salary.
(d) The deposit is invalid unless approved by the company's shareholders
in a general meeting. (2 Marks)

PART – II Descriptive Questions (70 Marks)

Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) Nath Private Limited is a start-up company. Mr. P has been appointed
as Accounts Manager of Nath Private Limited. The Board meeting for
approval of accounts is to held be on 01.08.2024. For this he has to
prepare the financial statements for approval by the Board. Referring to
section 2(40) of the Companies Act, 2013, advise Mr. P about the
statements that are required to be prepared. (5 Marks)
(b) Mr. Ramchandra is a partner and in- charge (and certifies financial
statements) of A & Associates. The firm is appointed as an auditor firm
of Badri Limited (listed company). Mr. Ramchandra retires from A &
Associates and after some time join Gupta & Gupta firm as a partner, on
20/05/24. In the general meeting of Badri Limited held on 15/06/24, the
company appointed Gupta & Gupta firm as next auditor of the company.
Advise Badri Limited, whether the company has adhered to the provision
of the Company Act, 2013, by appointing Gupta & Gupta as auditor for
the company? (5 Marks)
(c) Referring to the provisions of the Foreign Exchange Management Act,
1999, state the kind of approval required for Payment of commission of
U.S. $ 20,000 on exports made towards equity investment in Joint
Ventures/Wholly Owned Subsidiaries abroad of Indian companies.
(4 Marks)
2. (a) Samay Publishing Limited facing acute cash crunch wants to utilise a
portion of ‘Deposit Repayment Reserve Account’ to pay off its short-
term creditors who are pressing hard for repayment of ` 20,00,000. Is it
justified to use funds lying in ‘Deposit Repayment Reserve Account’ in
this manner? Give your answer as per the provisions of the Companies
Act, 2013. (5 Marks)

7
 (b) Mr. Kaushal is a Chartered and an MBA by profession, has been
appointed as an Executive Director on the Board of XYZ Limited. His job
profile includes advising the Board of Directors of the company on
various compliance matters, strategies, business plans, and risk matters
relating to the company. Keeping in view of above position whether Mr.
Kaushal can be classified as the Promoter of XYZ Limited? Examine the
same under the provisions of the Companies Act, 2013. (5 Marks)
(c) Explain the following with reference to the provisions of the General
Clauses Act, 1897:
(i) Person
(ii) Document (4 Marks)
3. (a) Trinity school started imparting education on 1st April, 2010, with the sole
objective of providing education to children of weaker society either free
of cost or at a very nominal fee depending upon the financial condition
of their parents. However, on 30th March 2024, it came to the knowledge
of the Central Government that the said school was operating by
violating the objects of its objective clause due to which it was granted
the status of a section 8 company under the Companies Act, 2013.
Describe what powers can be exercised by the Central Government
against the Trinity school, in such a case? (5 Marks)
(b) A General Meeting of ABC Private Ltd was scheduled to be held on
15thApril, 2024 at 3.00 P.M. As per the notice, the members who will be
unable to attend the meeting in person can appoint a proxy and the proxy
forms duly filled should be sent to the company, so that company can
receive it within time. Mr. X, a member of the company appoints Mr. Y
as his proxy and the proxy form dated 10-04-2024 was deposited by Mr.
Y with the company at its registered office on 11-04-2024. Similarly,
another member Mr. W also gives two separate proxies to two individuals
named Mr. M and Mr. N. In the case of Mr. M, the proxy dated
12-04-2024 was deposited with the company on the same day and the
proxy form in favour of Mr. N was deposited on 14-04-2024. All the
proxies viz., Y, M and N were present before the meeting.
According to the provisions of the Companies Act, 2013, who would be
the persons allowed to represent as proxies for members X and W
respectively? (5 Marks)
(c) Write short notes on the following in understanding definitions while
interpreting statutes:
(i) Ambiguous definitions
(ii) Definitions subject to a contrary context (4 Marks)
4. (a) State the persons responsible for complying with the provisions
regarding maintenance of Books of Accounts of a company. Support with
the help of relevant provisions of the Companies Act, 2013. (5 Marks)

8
 (b) Define the term ‘Small limited liability partnership’ as per the provisions
of the Limited Liability Partnership Act, 2008. (5 Marks)
(c) What are the differences between interpretation and construction in the
legal context, and how do these two concepts relate to each other as per
Interpretation of Statute? (4 Marks)
5. (a) Kedar Limited, an unlisted company, registered in the state of Haryana
with 100 shareholders want to organize the Annual General Meeting of
the company for the financial year 2023-2024 as under:
(i) The meeting shall be held on 28th September 2024 which happens
to be Rakshanda, a declared as holiday by the Haryana
Government.
(ii) The venue for the meeting shall be Lonavala, a hill resort in
Maharashtra. Out of 100 shareholders, 98 have given their consent
in writing for conducting the meeting in Lonavala.
Advise the company on the feasibility of the above with reference to the
provisions of the Companies Act, 2013. (5 Marks)
(b) Form Limited is engaged in the business of manufacturing shoes for kids.
It is required to hold its Annual General Meeting (AGM) for the financial
year ending 31st March 2024 by 30th September 2024. However, due to
internal disputes among the directors, the company was unable to
convene the AGM by the due date.
Explain the relevant provisions of the Companies Act, 2013, with respect
to the filing of the financial statements with the Registrar in this case.
(5 Marks)
(c) ABC Limited operates a factory situated near a river. As per a recent
Central Act, factories must be located at least 5 kilometers away from
any river. A dispute arises when an environmental agency claims that
ABC Limited's factory is only 4.5 kilometers away from the river, while
ABC Limited contends that the distance is 5.3 kilometers as per the road
distance measured along the winding path leading to the river.
Based on the provisions of the General Clauses Act, 1897, advise
whether the contention of ABC Limited is correct. (4 Marks)
6. (a) Mr. H acquired a property from PQR Limited which was mortgaged to
ABC Bank. He settled the dues to ABC Bank in full and the same was
registered with the sub-registrar who noted that the mortgage had been
settled. But neither the company nor ABC Bank filed particulars of
satisfaction of charge with the jurisdictional Registrar of Companies. Can
Mr. H approach the Registrar and seek any relief in this regard? Discuss
this matter in the light of provisions of the Companies Act, 2013.
(5 Marks)

9
 OR
(a) Mr. Prakash purchased a commercial property in Mumbai belonging to
PQR Limited after entering into an agreement with the company. At the
time of registration, Mr. Prakash came to know that the title deed of the
company was not free and the company expressed its inability to get the
title deed transferred in Prakash’s name contending that he ought to
have the knowledge of charge created on the property of the company.
In line with the provisions of the Companies Act, 2013, advise whether
the contention of PQR Limited is correct? (5 Marks)
(b) XYZ Limited, a company incorporated outside India and to which
provisions of Chapter XXII of the Companies Act, 2013 are applicable,
entered into a contract with ABC Limited, an Indian company, for the
supply of machinery. After the machinery was delivered, ABC Limited
failed to make the payment citing defects in the machinery.
XYZ Limited discovered that it had failed to comply with certain
provisions of Chapter XXII of the Companies Act, 2013, relating to the
registration of foreign companies in India. Despite this, XYZ Limited
intends to file a suit against ABC Limited for payment.
Discuss whether XYZ Limited can initiate legal proceedings against ABC
Limited in light of the non-compliance with Chapter XXII of the
Companies Act, 2013.
Give your answer as per the provisions of the Companies Act, 2013 [read
along with the Companies (Registration of Foreign Companies) Rules,
2014]. (5 Marks)
(c) Explain the meaning of the followings terms as defined under the Foreign
Exchange Management Act, 1999:
(i) Authorised person
(ii) Currency (4 Marks)

10
 Mock Test Paper - Series I: December, 2024
Date of Paper: 10th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
ANSWER TO PART – I CASE SCENARIO BASED MCQS

1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)

ANSWERS OF PART – II DESCRIPTIVE QUESTIONS

1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):

1
 Exemption: As per the proviso to section 2(40), the financial statement,
with respect to one person company, small company, dormant company
and private company (if such private company is a start-up) may not
include the cash flow statement.
In the instant case, Mr. P has to prepare the prescribed financial
statements except Cash Flow Statement; since Nath Private Limited is
a start-up private company.
(b) According to section 139(2) of the Companies Act, 2013, no listed
company or a company belonging to such class or classes of companies
as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive
years; and
(b) an audit firm as auditor for more than two terms of five consecutive
years.
Provided that –
(i) an individual auditor who has completed his term under clause (a)
shall not be eligible for re-appointment as auditor in the same
company for five years from the completion of his term;
(ii) an audit firm which has completed its term under clause (b), shall
not be eligible for re-appointment as auditor in the same company
for five years from the completion of such term.
Provided further that as on the date of appointment no audit firm having
a common partner or partners to the other audit firm, whose tenure has
expired in a company immediately preceding the financial year, shall be
appointed as auditor of the same company for a period of five years.
As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors)
Rules, 2014, if a partner, who is in charge of an audit firm and also
certifies the financial statements of the company, retires from the said
firm and joins another firm of chartered accountants, such other firm shall
also be ineligible to be appointed for a period of five years.
Here, Mr. Ramchandra has retired from A & Associates and joined Gupta
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates
(and certifies the financial statement of the company) in A & Associates.
He retires from A & Associates and joins Gupta & Gupta firm.
As per the facts of the question and provisions of law, Gupta & Gupta
Firm will also be ineligible, to be appointed as auditor of Badri Limited
(listed company) for a period of 5 years.
(c) Under provisions of section 5 of the Foreign Exchange Management Act,
1999 certain Rules have been made for drawal of Foreign Exchange for
Current Account transactions. As per these Rules, Foreign Exchange for
some of the Current Account transactions is prohibited. As regards some
other Current Account transactions, Foreign Exchange can be drawn
with prior permission of the Central Government while in case of some

2
 Current Account transactions, prior permission of Reserve Bank of India
is required.
Accordingly, Payment of commission on exports made towards equity
investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of
Indian companies, is a transactions for which drawal of foreign exchange
is prohibited.
In all the cases, where remittance of Foreign Exchange is allowed, either
by general or specific permission, the remitter has to obtain the Foreign
Exchange from an Authorised Person.
2. (a) Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states
that the amount deposited in the ‘Deposit Repayment Reserve Account’
shall not be used by a company for any purpose other than repayment
of deposits.
In the given question, Samay Publishing Limited wants to utilise a portion
of ‘Deposit Repayment Reserve Account’ to pay off its short-term
creditors. Since there is a prohibition, Samay Publishing Limited is not
permitted to utilise its ‘Deposit Repayment Reserve Account’ to pay off
its short-term creditors.
(b) According to section 2(69) of the Companies Act, 2013, Promoter means
a person:-
(a) Who has been named as such in a prospectus or is identified by
the company in the annual return; or
(b) Who has control over the affairs of the company, directly or
indirectly whether as a shareholder, director or otherwise; or
(c) In accordance with whose advice, directions or instructions the
Board of Directors of the Company is accustomed to act.
Provided that nothing in sub-clause (c) shall apply to a person who is
acting merely in a professional capacity.
As the job profile of Mr. Kaushal is only limited to advise the Board of
Directors on various compliance matters, strategies, business plans and
risk matters relating to business of the company and that to only in a
professional capacity, he will not be classified as a Promoter of XYZ
Limited.
(c) (i) Person
According to section 3(42) of the General Clauses Act, 1897,
‘Person’ shall include any company or association or body of
individuals, whether incorporated or not.
(ii) Document
According to section 3(18) of the General Clauses Act, 1897,
‘Document’ shall include any matter written, expressed or
described upon any substance by means of letters, figures or marks
or by more than one of those means which is intended to be used
or which may be used, for the purpose or recording that matter.
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3. (a) Section 8 of the Companies Act, 2013 deals with the formation of
companies which are formed to promote the charitable objects of
commerce, art, science, education, sports etc. Such company intends to
apply its profit in promoting its objects. Section 8 companies are
registered by the Registrar only when a license is issued by the Central
Government to them. Since, Trinity school was a Section 8 company and
it had started violating the objects of its objective clause, hence in such
a situation the following powers can be exercised by the Central
Government:
(i) The Central Government may by order revoke the licence of the
company where the company contravenes any of the requirements
or the conditions of this sections subject to which a licence is issued
or where the affairs of the company are conducted fraudulently, or
violative of the objects of the company or prejudicial to public
interest, and on revocation the Registrar shall put ‘Limited’ or
‘Private Limited’ against the company’s name in the register. But
before such revocation, the Central Government must give it a
written notice of its intention to revoke the licence and opportunity
to be heard in the matter.
(ii) Where a licence is revoked, the Central Government may, by order,
if it is satisfied that it is essential in the public interest, direct that
the company be wound up under this Act or amalgamated with
another company registered under this section. However, no such
order shall be made unless the company is given a reasonable
opportunity of being heard.
(iii) Where a licence is revoked and where the Central Government is
satisfied that it is essential in the public interest that the company
registered under this section should be amalgamated with another
company registered under this section and having similar objects,
then, notwithstanding anything to the contrary contained in this Act,
the Central Government may, by order, provide for such
amalgamation to form a single company with such constitution,
properties, powers, rights, interest, authorities and privileges and
with such liabilities, duties and obligations as may be specified in
the order.
(b) Validity of Resolution passed in the EGM called by the
Requisitionists
A Proxy is an instrument in writing executed by a shareholder authorizing
another person to attend a meeting and to vote thereat on his behalf and
in his absence. As per the provisions of section 105 of the Companies
Act, 2013, every shareholder who is entitled to attend and vote has a
statutory right to appoint another person as his proxy. Section 105(4)
provides that a proxy received 48 hours before the meeting will be valid.
Further, any provision in the articles of association of the company
requiring instrument of proxy to be lodged with the company more than
48 hours before a meeting shall have effect as if 48 hours had been
specified therein.
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 Thus, in case of member X, the proxy Y will be permitted to represent as
proxy on his behalf as form for appointing proxy was submitted within
the permitted time.
However, in the case of member W, the proxy M will be permitted to
represent as the proxy. Whereas submission of form authorizing N to
represent as proxy was deposited in less than 48 hours before the
meeting, so N will not be allowed to represent W.
(c) (i) Ambiguous definitions: Sometime, we may find that the definition
section may itself be ambiguous, and so it may have to be
interpreted in the light of the other provisions of the Act and having
regard to the ordinary meaning of the word defined. Such type of
definition is not to be read in isolation. It must be read in the context
of the phrase which it defines, realising that the function of a
definition is to give accuracy and certainty to a word or phrase
which would otherwise be vague and uncertain but not to contradict
it or depose it altogether.
(ii) Definitions subject to a contrary context: When a word is
defined to bear a number of inclusive meanings, the sense in which
the word is used in a particular provision must be ascertained from
the context of the scheme of the Act, the language of the provision
and the object intended to be served thereby.
4. (a) Persons responsible to maintain books: As per section 128 (6) of the
Companies Act, 2013, the person responsible to take all reasonable
steps to secure compliance by the company with the requirement of
maintenance of books of account etc. shall be:
(a) Managing Director,
(b) Whole-Time Director, in charge of finance
(c) Chief Financial Officer
(d) Any other person of a company charged by the Board with duty of
complying with provisions of section 128.
(b) Small limited liability partnership
According to section 2(1)(ta) of the Limited Liability Partnership Act,
2008, small limited liability partnership means a limited liability
partnership:
(i) the contribution of which, does not exceed 25 lakh rupees or such
higher amount, not exceeding 5 crore rupees, as may be
prescribed; and
(ii) the turnover of which, as per the Statement of Accounts and
Solvency for the immediately preceding financial year, does not
exceed 40 lakh rupees or such higher amount, not exceeding 50
crore rupees, as may be prescribed; or
(iii) which meets such other requirements as may be prescribed, and
fulfils such terms and conditions as may be prescribed.

5
 (c) Difference and Relationship between Interpretation and
Construction
The two terms- ‘Interpretation’ and ‘Construction’, are used
interchangeably to denote a process adopted by the courts to ascertain
the meaning of the legislature from the words with which it is expressed,
these two terms have different connotations.
Interpretation is the art of ascertaining the meaning of words and the true
sense in which the author intended that they should be understood.
Thus, where the Court adheres to the plain meaning of the language
used by the legislature, it would be ‘interpretation’ of the words, but
where the meaning is not plain, the court has to decide whether the
wording was meant to cover the situation before the court. Here, the
court would be resorting to ‘construction’. Conclusions drawn by means
of construction are within the spirit though not necessarily within the
letter of the law.
In practice construction includes interpretation and the terms are
frequently used synonymously.
5. (a) Section 96(2) of the Companies Act, 2013 states that every Annual
General Meeting (AGM) shall be called on any day that is not a National
Holiday and shall be held either at the registered office of the company
or at some other place within the city, town, or village in which the
registered office of the company is situated.
However, AGM of an unlisted company may be held at any place in India
if consent is given in writing or by electronic mode by all the members in
advance.
Explanation—For the purposes of this sub-section, "National Holiday"
means and includes a day declared as National Holiday by the Central
Government.
In the instant case,
(i) Kedar Limited, an unlisted company, can hold its AGM on 28 th
September, 2024 which happens to be a holiday declared by
Haryana Government because this is not a national holiday.
(ii) Kedar Limited cannot hold its AGM in Lonavala, a hill resort in
Maharashtra because consent for this has to be given by all the
members in advance and here only 98 members out of 100 have
given their consent for conducting the meeting in Lonavala.
(b) As per section 137 of the Companies Act, 2013, where the Annual
General Meeting of a company for any year has not been held, the
financial statements along with the documents required to be attached,
duly signed along with the statement of facts and reasons for not holding
the AGM shall be filed with the Registrar within 30 days of the last date
before which the AGM should have been held and in such manner, with
such fees or additional fees as may be prescribed.

6
 (c) According to section 11 of the General Clauses Act, 1897, in the
measurement of any distance, for the purposes of any Central Act or
Regulation made after the commencement of this Act, that distance
shall, unless a different intention appears, be measured in a straight line
on a horizontal plane.
In this case, the distance between ABC Limited’s factory and the river
must be measured in a straight line on a horizontal plane, not based on
the road or path distance. The environmental agency's claim that the
factory is only 4.5 kilometers away in a straight line is correct. Since this
measurement is less than the required 5 kilometers, the factory does not
comply with the law.
Therefore, ABC Limited’s contention is not correct.
6. (a) Section 83 of the Companies Act, 2013 empowers the Registrar to make
entries with respect to the satisfaction and release of charge even if no
intimation has been received by him from the company. Accordingly, with
respect to any registered charge if an evidence is shown to the
satisfaction of Registrar that the debt secured by charge has been paid
or satisfied in whole or in part or that the part of the property or
undertaking charged has been released from the charge or has ceased
to form part of the company’s property or undertaking, then he may enter
in the register of charges a memorandum of satisfaction that:
 the debt has been satisfied in whole or in part; or
 the part of the property or undertaking has been released from the
charge or has ceased to form part of the company’s property or
undertaking.
This power can be exercised by the Registrar despite the fact that no
intimation has been received by him from the company.
The Registrar shall inform the affected parties within 30 days of making
the entry in the Register of Charges.
Issue of Certificate: As per Rule 8 (2), in case the Registrar enters a
memorandum of satisfaction of charge in full, he shall issue a certificate
of registration of satisfaction of charge in Form No. CHG-5.
Therefore, Mr. H can approach the Registrar and show evidence to his
satisfaction that the charge has been duly settled and satisfied and
request the Registrar to enter a memorandum of satisfaction noting the
release of charge.
OR
(a) According to section 80 of the Companies Act, 2013, where any charge
on any property or assets of a company or any of its undertakings is
registered under section 77 of the Companies Act, 2013, any person
acquiring such property, assets, undertakings or part thereof or any
share or interest therein shall be deemed to have notice of the charge
from the date of such registration.

7
 Thus, section 80 clarifies that if any person acquires a property, assets
or undertaking in respect of which a charge is already registered, it would
be deemed that he has complete knowledge of charge from the date of
its registration. Mr. Prakash, therefore, ought to have been careful while
purchasing property and should have verified beforehand that PQR
Limited had already created a charge on the property.
In view of above, the contention of PQR Limited is correct.
(b) According to section 393 of the Companies Act, 2013, any failure by a
company to comply with the provisions of Chapter XXII of the Companies
Act, 2013, shall not affect the validity of any contract, dealing or
transaction entered into by the company or its liability to be sued in
respect thereof. However, the company shall not be entitled to bring any
suit, claim any set-off, make any counter-claim or institute any legal
proceeding in respect of any such contract, dealing or transaction, until
the company has complied with the provisions of the Companies Act,
2013, applicable to it.
In this given question, XYZ Limited, a company incorporated outside
India, has failed to comply with certain provisions of Chapter XXII of the
Companies Act, 2013, which governs the registration and compliance
requirements for foreign companies operating in India.
According to the Companies Act, 2013, non-compliance with Chapter
XXII does not affect the validity of any contract, dealing, or transaction
entered into by the company. Therefore, the contract between XYZ
Limited and ABC Limited remains valid, and ABC Limited is still legally
bound to fulfill its contractual obligations, including the payment for the
machinery supplied.
Further, XYZ Limited cannot bring a suit, claim any set-off, make any
counter-claim, or institute any legal proceeding related to the contract as
it has not complied with certain provisions of Chapter XXII.
(c) (i) Authorised person
According to section 2(c) of the Foreign Exchange Management
Act, 1999, Authorised person means an authorised dealer, money
changer, off- shore banking unit or any other person for the time
being authorised under section 10(1) to deal in foreign exchange
or foreign securities.
(ii) Currency
According to section 2(h) of the Foreign Exchange Management
Act, 1999, Currency includes all currency notes, postal notes,
postal orders, money orders, cheques, drafts, travelers’ cheques,
letters of credit, bills of exchange and promissory notes, credit
cards or such other similar instruments, as may be notified by the
Reserve Bank.

8
 Mock Test Paper - Series II: December, 2024
Date of Paper: 11th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP-I

PAPER – 3: TAXATION
Time Allowed – 3 Hours Maximum Marks – 100
SECTION – A: INCOME TAX LAW (50 MARKS)
Working Notes should form part of the answer. Wherever necessary, suitable
assumptions may be made by the candidates and disclosed by way of a note.
However, in answers to Questions in Division A, working notes are not
required.
The relevant assessment year is A.Y.2024-25.
Division A – Multiple Choice Questions
Write the most appropriate answer to each of the following multiple choice
questions by choosing one of the four options given. All questions are
compulsory.
1. Mr. Ashish born on 1.4.1964 furnished his return of income for Assessment
Year 2024-25 on 10.07.2024. He has paid tax under default tax regime. He
had shown the following income in his original return of income -
- Salary of ` 10.50 lakhs from PQR (P) Ltd (Computed)
- Interest from savings bank account of ` 15,700
- Interest from fixed deposits with SBI of ` 50,000.
During the P.Y. 2023-24, he paid interest on loan of ` 2,50,000 for purchase
of self-occupied property. He contributed ` 1,50,000 towards the PPF. He
paid health insurance premium of ` 40,000 by account payee cheque for self
and wife. He paid ` 2,200 in cash for his health check-up and ` 4,000 by
cheque for preventive health check-up of his parents. He also paid medical
insurance premium of ` 29,000 during the year to insure the health of his
mother, aged 80 years. He further incurred medical expenditure of ` 18,000
on his father, aged 81 years, who is staying with him. His father is not
covered under any mediclaim policy.
He met one of his friends, CA. Ashwin on 01.02.2025. While discussing with
his friend, his friend told him that the default tax regime under section
115BAC is not beneficial to him. He advised him to revise his return of
income and shift out of the default tax regime. However, Mr. Ashish’s son,
who is employed in the accounts department of TQM (P) Ltd., is of the view
that once tax is paid under section 115BAC in original return, it cannot be
changed in revised return.
From the information given above, choose the most appropriate answer to
the following questions –

1
 (i) What is the total deduction under Chapter VI-A allowable to Mr. Ashish
if he shifts out of the default tax regime under section 115BAC?
(a) ` 2,34,800
(b) ` 2,35,000
(c) ` 2,92,000
(d) ` 2,92,200
(ii) What is total income of Mr. Ashish under normal provisions of the Act
for A.Y. 2024-25?
(a) ` 5,73,700
(b) ` 6,23,700
(c) ` 6,25,700
(d) ` 6,30,700
(iii) Can Mr. Ashish file his revise return of income for A.Y. 2024-25 after
the due date and declare income under the regular provisions of the
Act?
(a) Yes, Mr. Ashish can revise his return of income and declare
income under the regular provisions of the Act
(b) No, though he can file a revised return of income, option to shift
out from section 115BAC once not opted in original return of
income cannot be opted in revised return of income if he is filing
revised return after due date.
(c) No, Mr. Ashish cannot revise his return of income for A.Y.
2024-25
(d) No, he cannot do so since he is a salaried employee. He would
have made a declaration to pay tax under section 115BAC to his
employer, which cannot be changed subsequently at the time of
fling of return of income (3 x 2 Marks)
2. Mr. Rajiv, an Indian resident, purchased a residential house property at
Gwalior on 28.05.1999 for ` 28.5 lakhs. The fair market value and the stamp
duty value of such house property as on 1.4.2001 was ` 33.5 lakhs and ` 32.4
lakhs, respectively. On 25.03.2014, Mr. Rajiv entered into an agreement with
Mr. Virat for sale of such property for ` 74 lakhs and received an amount of
` 3.9 lakhs as advance. However, as Mr. Virat did not pay the balance
amount, Mr. Rajiv forfeited the advance.
On 15.04.2023, Mr. Rajiv sold the house property to Mr. Suraj for ` 2.10
crores, when the stamp duty value of the property was ` 2.33 crores.
Cost inflation index –
P.Y. 2023-24: 348; P.Y. 2013-14: 220; P.Y. 2001-02: 100
From the information given above, choose the most appropriate answer to the
following questions –

2
 (i) What shall be the indexed cost of acquisition of residential house
property at Gwalior for computation of capital gains in the hands of Mr.
Rajiv?
(a) ` 1,12,75,200
(b) `. 99,18,000
(c) ` 1,03,00,800
(d) ` 1,05,27,200
(ii) The amount of capital gains for A.Y. 2024-25 in the hands of Mr. Rajiv
for sale of residential house property at Gwalior is -
(a) ` 1,20,24,800
(c) (b) ` 1,29,99,200
(d) ` 1,33,82,000
(d) ` 1,27,72,800
(iii) The amount required to be deducted as TDS by Mr. Suraj under
section 194-IA, is -
(a) ` 2,33,000
(b) Nil
(c) ` 2,10,000
(d) ` 23,000 (3 x 2 Marks)
3. Mr. Sushil is a person of Indian origin, residing in Canada. During P.Y.
2023-24, he visited India on several occasions and his period of stay, in
total, amounted to 129 days during P.Y. 2023-24 and his period of stay in
India during P.Y. 2022-23, P.Y.2021-22, P.Y. 2020-21 and P.Y. 2019-20 was
135 days, 115 days, 95 days and 125 days, respectively. He earned the
following incomes during the P.Y. 2023-24:
Source of Income Amount (`)
Income received or deemed to be received in India 2,50,000
Income accruing or arising or which is deemed to accrue or 3,75,000
arise in India
Income accruing or arising and received outside India from 5,50,000
business controlled from India
Income accruing or arising and received outside India from 6,50,000
business controlled outside India
What is the residential status of Mr. Sushil for A.Y. 2024-25 and his income
liable to tax in India during A.Y. 2024-25?
(a) Non-Resident; ` 6,25,000 is liable to tax in India
(b) Resident and ordinary resident; ` 18,25,000 is liable to tax in India
(c) Resident but not ordinarily resident; ` 11,75,000 is liable to tax in India

3
 (d) Non-Resident; ` 11,75,000 is liable to tax in India (2 Marks)
4. Mr. Arora made the following cash withdrawals during the P.Y.2023-24 -
Date Amount From
1.6.2023 ` 70 lakhs Canara Bank
1.8.2023 ` 50 lakhs Canara Bank
1.10.2023 ` 60 lakhs Repco Bank (Co-operative Bank)
1.11.2023 ` 10 lakhs SBI
1.12.2023 ` 10 lakhs Repco Bank (Co-operative Bank)
20.1.2024 ` 20 lakhs Repco Bank (Co-operative Bank)
1.2.2024 ` 15 lakhs Repco Bank (Co-operative Bank)
10.2.2024 ` 75 lakhs SBI
1.3.2024 ` 15 lakhs SBI
Which of the above banks are required to deduct tax at source on cash
withdrawals made by Mr. Arora in the P.Y.2023-24 if he regularly files his
return of income?
(a) Canara Bank
(b) SBI & Repco
(c) Repco & Canara Bank
(d) Repco (1 Mark)
Division B – Descriptive Questions
Question No. 1 is compulsory
Attempt any two questions from the remaining three questions
1. Mr. Ashok, aged 61 years, a resident individual, engaged in a wholesale
business of stationary products provides you the following information for the
year ended 31.3.2024. He is also a partner in UVW & Co., a partnership
firm.
Sl. Particulars ` `
No.
(i) Interest on capital received from UVW & Co., at 1,40,000
14% [in accordance with the partnership deed]
(ii) Share of profit from the firm 44,000
(iii) Salary as working partner (fully allowed in the 1,00,000
hands of the firm)
(iv) Interest from bank on fixed deposit (Net of TDS) 49,500
(v) Interest on saving bank account 13,300
(vi) Income-tax refund received relating to 34,500
assessment year 2023-24 including interest of
` 1,400

4
 (vii) Net profit from wholesale business 6,60,000
Amounts debited include the following:
- Depreciation as per books 34,000
- Motor car expenses 40,000
- Municipal taxes for the shop 7,000
(For two half years; payment for one half year
made on 12.7.2023 and for the other on
31.12.2024)
- Salary to manager by way of a single cash 22,000
payment
(viii) The WDV of the assets (as on 1.4.2023) used in
above wholesale business is as under:
- Computers 2,40,000
- Computer printer 1,50,000
(ix) Motor car acquired on 31.12.2023 (20% used 6,80,000
for personal use)
(x) He owned a house property in Mumbai which 1,35,000
was sold in January, 2021. He received arrears
of rent in respect of the said property in
October, 2023.
(x) LIP paid for independent son 60,000
(xi) PPF of his wife 70,000
(xii) Health insurance premium paid by way of A/c 35,000
payee cheque for self
(xiii) Contribution toward Prime Minister National 50,000
Relief Fund
You are required to compute the total income and tax liability of Mr. Ashok
for the A.Y. 2024-25 assuming he opts out from the provisions of section
115BAC. (15 Marks)
2. (a) Mr. Sudesh (aged 58 years), a citizen of India, serving in the Ministry of
Finance in India, was transferred to Indian Embassy in UK on 15th
March 2023. His income during the financial year 2023-24 is given
hereunder:
Particulars `
Rent from a house situated at UK, received in UK. 5,25,000
Thereafter, remitted to Indian bank account.
Salary from Government of India 9,25,000
Foreign Allowances from Government of India 8,00,000
Mr. Sudesh did not come to India during the financial year 2023-24.
Compute his total income for the Assessment year 2024-25. (3 Marks)

5
 (b) Mr. Sumit has submitted his income-tax return containing certain
losses/deductions in respect of the P.Y. 2023-24 on 22.10.2024. The
due date for filing the return for Mr. Sumit was 31st July, 2024 under
section 139(1). You are required to examine with reference to the
relevant provisions of Income-tax Act, 1961 whether the following
losses/deductions can be carried forward/claimed in subsequent years
by Mr. Sumit if he pays tax under default tax provisions of the Act.
(i) Loss from the business carried on by him as a proprietor:
` 10,80,000 (computed)
(ii) Unabsorbed Depreciation: ` 2,00,000 (computed)
(iii) Loss from let out house property: ` 2,50,000 (computed)
(3 Marks)
(c) Briefly discuss the provisions of tax deducted at source under the
Income-tax Act, 1961 in respect of the following payments:
(i) Mr. Shamsher (a resident individual aged 65 years) has
maintained two fixed deposits in two different branches of HFC
Bank of India (working on core banking solution). During the year
2023-24, the bank paid ` 32,000 and ` 17,000 as interest on
these fixed deposits.
(ii) Mr. Chetan, a pensioner, pays ` 55,00,000 during F.Y. 2023-24 to
Mr. Gopi, for contract payment for reconstruction of his residential
house. (4 Marks)
3. (a) Mr. Yogesh constructed a house in P.Y. 2017-18 with 3 independent
units. During the P.Y. 2023-24, Unit - 1 (50% of floor area) is let out for
residential purpose at monthly rent of ` 20,000. Rent of January, 2024
could not be collected from the tenant and a notice to vacate the unit
was given to the tenant. No other property of Mr. Yogesh is occupied
by the tenant. Unit - 1 remains vacant for February and March 2024
when it is not put to any use. Unit - 2 (25% of the floor area) is used by
Mr. Yogesh for the purpose of his business, while Unit - 3 (the
remaining 25%) is utilized for the purpose of his residence. Other
particulars of the house are as follows:
Municipal valuation - ` 2,88,000
Fair rent - ` 2,98,000
Standard rent under the Rent Control Act - ` 2,78,000
Municipal taxes - ` 30,000 paid by Mr. Yogesh
Repairs - ` 7,000
Interest on capital borrowed for the construction of the property -
` 90,000,
Ground rent - ` 6,000 and
Fire insurance premium paid - ` 60,000.

6
 Income of Yogesh from the business is ` 2,40,000 (without debiting
house rent and other incidental expenditure).
Determine the taxable income of Mr. Yogesh for the assessment year
2024-25 if he pays tax under section 115BAC. (5 Marks)
(b) Mr. Soham, a builder, entered into an agreement on 1.4.2023 with
Mr. Aman to transfer 4th Floor in Tower A of a new project for
` 1,50,00,000. He received ` 25 lakhs as advance in cash on 1.4.2023.
The stamp duty value of such floor on that date was ` 1,70,00,000. The
sale deed was executed and registered on 15.6.2023 for the agreed
consideration. However, the stamp duty value on that date was
` 1,75,00,000.
Discuss the tax consequences of above, in the hands of Mr. Soham
and Mr. Aman. (5 Marks)
4. (a) Mr. Mohan, aged 30 years, submits the information of following
transaction/income during the P.Y. 2023-24
(i) Mr. Mohan had a house in Delhi. During financial year 2020-21,
he had transferred the said house to Ms. Veena, daughter of his
brother without any consideration. House would go back to
Mr. Mohan after the life time of Ms. Veena. The transfer was
made with a condition that 15% of rental income from such house
shall be paid to Mrs. Mohan. Rent received by Ms. Veena during
the previous year 2023-24 from such house property is
` 6,50,000.
(iii) Mr. and Mrs. Mohan forms a partnership firm with equal share in
profits. Mr. Mohan transferred a fixed deposit of ` 50 lakhs to
such firm. Firm had no income or expense other than the interest
of ` 6,00,000 received from such fixed deposit. Firm distributed
the entire surplus to Mr. and Mrs. Mohan at the end of the year.
(iv) Mr. Mohan holds preference shares in M/s X Pvt. Ltd. He
instructed the company to pay dividends to Ms. Roshni, daughter
of his servant. The transfer is irrevocable for the life time of
Roshni. Dividend received by Ms. Roshni during the previous year
2023-24 is ` 10,00,000.
(v) Mr. Mohan has a short term capital loss of ` 16,000 from sale of
property and long term capital gain of ` 15,000 from sale of
property.
(vi) Other income of Mr. Mohan includes
- Interest from saving bank account of ` 2,00,000
- Cash gift of ` 75,000 received from daughter of his sister on
his birthday.
- Income from betting of ` 34,000
- Income from card games of ` 46,000

7
 - Loss on maintenance of race horses of ` 14,600
Compute the total income of Mr. Mohan for the Assessment Year
2024-25 and the losses to be carried forward if he pays tax under
normal provisions of the Act. (7 Marks)
(b) Mr. Prince, a senior citizen, has reported a Total Income ` 1,90,000.
He has claimed exemption of ` 50,000 under section 54EC in respect
of long term capital gain on sale of house property and deductions
under Chapter VI-A amounting to ` 1,50,000 for the previous year
2023-24. Is he liable to file his return of income under section 139(1)
for the Assessment year 2024-25? If so why? (3 Marks)
OR
(b) Examine with reasons, whether the following statements are true or
false, with regard to the provisions of the Income-tax Act, 1961:
(i) The Assessing Officer has the power, inter alia, to allot PAN to
any person by whom no tax is payable.
(ii) Where the Karta of a HUF is absent from India, the return of
income can be verified by any male member of the family.
(3 Marks)

8
 SECTION B – GOODS AND SERVICES TAX (50 MARKS)
QUESTIONS
(i) Working Notes should form part of the answers. However, in answers to
Questions in Division A, working notes are not required.
(ii) Wherever necessary, suitable assumptions may be made by the candidates,
and disclosed by way of notes.
(iii) All questions should be answered on the basis of position of the GST law as
amended by provisions of the CGST Act, 2017 and the IGST Act, 2017 as
amended by the Finance Act, 2023, including significant notifications and
circulars issued, up to 30th June, 2024.
Division A - Multiple Choice Questions (MCQs)
Write the most appropriate answer to each of the following multiple-choice
questions by choosing one of the four options given. All questions are
compulsory.
Total Marks: 15 Marks
Case Scenario 1
Anushka, registered under GST in the State of Madhya Pradesh, is engaged in
supplying multiple taxable goods and services. She has undertaken the following
activities/transactions in the month of October in the current financial year:
(i) Donated some money to Netrajyoti Charitable Trust, Madhya Pradesh, in the
memory of her late mother. The Netrajyoti Charitable Trust constructed a
room in the school run by it from such donation and wrote “Donated by Miss.
Anushka in the memory of her mother” on the door of the room so constructed.
(ii) Organized a seminar in Indore which was sponsored by WE-WIN Cricket
Academy, an LLP. Anushka received a sponsorship fee of `1,50,000.
(iii) Ashoka Public School intended to distribute gift packages consisting of
fountain pen, calculator and tape dispenser to its students on the occasion of
Children’s Day. Therefore, it entered into a contract with Anushka on 28th
October for supply of 2,000 packages at a single price of ` 250. Rates of GST
for fountain pen, calculator and tape dispenser are 5%, 12% and 18%
respectively.
(iv) Received the following payments during the month of October:
- earned ` 160,000 by performing at a western Indian cinematic concert in
Indore
- earned ` 50,000 for renting of space for use as a Textile Emporium
- received ` 70,000 for supply of farm labour
(v) Supplied machinery with a basic price of ` 45,000 (before TCS under Income
Tax Act, 1961). Tax collected at source under Income-tax Act, 1961 on said
machinery is ` 2,500. Further, a subsidy of `50,000 is received from Prakarti
Foundation Pvt. Ltd for usage of green energy and the subsidy was linked to
energy saved during the month.
9
Anushka needs to transport one consignment to the transporter and then to the
consignee. The distance, within the same State, between her godown and the
transporter is 20 kms and from the place of transporter to consignee is 99 kms,
respectively.
All the amounts given above are exclusive of GST, wherever applicable.
Based on the facts of the case scenario given above, choose the most appropriate
answer to Q. Nos. 1 to 5 below:-
1. Donation made by Anushka to Netrajyoti Charitable Trust is _______.
(a) exempted from GST by way of a notification
(b) not a supply at all
(c) liable to GST under forward charge
(d) liable to GST under reverse charge
2. Which of the following statements is correct with respect to the sponsorship
fee received by Anushka?
(a) Tax on sponsorship services is payable by Anushka under forward
charge.
(b) Tax on sponsorship services is payable by WE-WIN Cricket Academy
under reverse charge.
(c) Sponsorship services are exempt from GST since services provided to
a sports academy are exempt.
(d) Tax on sponsorship services is payable by Anushka under reverse
charge.
3. Determine the nature of supply and the applicable rate of GST for the
packages supplied by Anushka to Ashoka Public School.
(a) composite supply & applicable rate of GST is 12%
(b) mixed supply & applicable rate of GST is 18%
(c) composite supply & applicable rate of GST is 18%
(d) mixed supply & applicable rate of GST is 12%
4. Out of all the payments received by Anushka in the month of October, value
of exempt supply amounts to _____.
(a) ` 4,30,000
(b) ` 70,000
(c) ` 1,20,000
(d) ` 2,20,000

10
5. The value of supply of machinery supplied by Anushka is________.
(a) ` 45,000
(b) ` 47,500
(c) ` 48,500
(d) ` 51,000
6. Which of the following statements is true in respect of furnishing of details of
conveyance in Part B of e-way bill?
(a) Part B need not be filed in respect of transport of consignment from
Godown of Anushka to transporter location.
(b) Part B need not be filed in respect of transport of consignment from
transporter location to consignee’s location.
(c) Information in Part-B is neither required in transport of consignment from
Godown of Anushka to transporter location nor from transporter location
to consignee’s location.
(d) Information in Part-B is mandatory in transport of consignment from
Godown of Anushka to transporter location and from transporter location
to consignee’s location. (6 x 2 Marks = 12 Marks)
7. While filing return for the month of November, a firm - Vedika & Co. - registered
under GST generated E-Challan on 5th December for making payment of GST
through RTGS of their bank. Determine the validity of E-Challan generated
by Vedika & Co. for payment of taxes for the month of November?
(a) 5th December
(b) 15th December
(c) 20th December
(d) 31st December (1 Mark)
8. Vikas Nigam Limited (a Public Sector Undertaking) has placed an order to
Bharti Steels registered in Bokaro, Orissa for supply of 70 Iron shields each
costing ` 12000 (exclusive of GST). However, the supply will take place in 3
lots containing 10 shields, 20 shields, 40 shields on different days. Determine
whether tax is required to be deducted under GST law by Vikas Nigam Limited
on the above order?
(a) No TDS will be deducted
(b) TDS to be deducted on the third lot of 40 shields only as value exceeds
Rs. 2,50,000
(c) TDS to be deducted on entire order of 70 shields
(d) TDS to be deducted on supply of 2nd order of 20 shields (2 Marks)

11
 Division B - Descriptive Questions
Question No. 1 is compulsory.
Attempt any two questions out of remaining three questions.
Total Marks:35 Marks
1. (a) Aashima Limited, a registered dealer in Patna (Bihar), is engaged in
various types of supplies. The company provided the following details for
the month of January 2024:
Sl. Particulars Amount
No. in `
(i) Outward supply of goods made during the month to As given
various non-related persons: in
Particulars Market Transaction particulars
value Value (`) column
a. in the State of 3,00,000 4,00,000
Bihar (Intra-State)
b. to other States 2,00,000 1,00,000
(Inter-State)
(ii) Services by way of warehousing of potato chips 5,00,000
(Inter-State transaction)
(iii) Stock transfer without consideration to its branch at Nil
Gaya (Bihar). Branch has separate GSTN for
convenience of accounting and billing.
Value under section 15 of the CGST Act, 2017 -
` 20,000 (Intra -State)
(iv) Intra-State inward supply of various services for 6,50,000
use in the course or furtherance of business (30
invoices)
Additional Information:
(a) All the amounts given above are exclusive of taxes.
(b) During the course of arranging and filing documents, the
accountant of Aashima Limited observed that an invoice for
` 30,000 (excluding tax) dated 02.12.2023 was omitted to be
recorded in the books of accounts and no payment was made
against the same till the end of January 2024. This invoice was
issued by Mr. Suhaas of Patna, from whom Aashima Limited had
taken cars on rental basis. Invoice included cost of fuel also. (Intra-
State transaction).
(c) Rate of GST applicable on various supplies are as follows:
Nature of supply CGST SGST IGST
Car rental service 2.5% 2.5% 5%
All other inward and outward supplies 9% 9% 18%
12
 (d) No opening balance of input tax credit exists in the beginning of the
month.
(e) Out of the 30 invoices of inward supply received, 6 invoices with
taxable value amounting to ` 1,50,000 were e-invoices in which
Invoice Reference Number (IRN) was not mentioned. However, all
the invoices were duly reflected in GSTR 2B for the month of
January 2024, since the suppliers had filed their GSTR-1.
(f) Subject to the information given above, conditions necessary for
claiming ITC were complied with.
(g) Aashima Ltd. is not engaged in renting of cars business.
You are required to calculate the amount of net GST liability payable in
cash by Aashima Limited for the month of January 2024. Brief notes for
treatment given for each item should form part of your answer.
(10 Marks)
(b) Shri Narayan Pvt. Ltd., a registered supplier, furnishes the following
information relating to goods sold by it to Shri Ram Pvt. Ltd.-
S. No. Particulars Amount (`)
(i) Price of the goods [excluding taxes and other 1,00,000
charges mentioned at S. Nos. (iii), (v) and (vi)]
(ii) Municipal tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidy received from Shri Shyam Trust 50,000
[Subsidy is directly linked to the goods
supplied]
(v) Late fees for delayed payment inclusive of 1,000
GST
[Shri Ram Pvt. Ltd. paid the late fees.
However, these charges were ultimately
waived by Shri Narayan Pvt. Ltd. and the
amount was refunded to Shri Ram Pvt. Ltd.
during the same month]
(vi) Weighment charges 2,000
[Such charges were paid by Shri Ram Pvt.
Ltd. to Radhe Pvt. Ltd. on behalf of Shri
Narayan Pvt. Ltd.]

Note: Price of the goods is net of the subsidy received.

Determine the value of taxable supply made by Shri Narayan Pvt. Ltd. to
Shri Ram Pvt. Ltd. (5 Marks)

13
2. (a) Determine the time of supply from the given information in each of the
following independent cases:
(i)
Particulars Date
Supplier invoices goods taxable on reverse charge May 4
basis to Saroj & Co. (30 days from the date of
issuance of invoice elapse on June 3)
Saroj & Co receives the goods May 12
Saroj & Co makes the payment May 30

(ii)
Particulars Date
Supplier invoices goods taxable on reverse charge May 4
basis to Durable & Co. (30 days from the date of
issuance of invoice elapse on June 3)
Durable & Co receives the goods May 12
Durable & Co makes the payment May 30

(4 Marks)
(b) Examine whether the following activities would amount to supply under
section 7 read with Schedule I:
(i) Rimjhim Manufacturers have a factory in Delhi and a depot in
Mumbai. Both these establishments are registered in respective
States. Finished goods are sent from factory in Delhi to the Mumbai
depot without consideration so that the same can be sold from the
depot.
(ii) Mohan is an architect in Chennai. His brother who is settled in
London is a well-known lawyer. Mohan has taken legal advice from
him free of cost with regard to his family dispute. (6 Marks)
3. (a) World Fashions, a registered supplier of designer outfits in Delhi,
decides to exhibit its products in a Fashion Show being organised at
Hotel Green India, Delhi on 4th January. For the occasion, it gets the
service by way of makeover of its models from Glamour Beauty Services
Ltd., Mayur Vihar, on 4th January, for which a consideration of ` 5,00,000
(excluding GST) has been charged. Glamour Beauty Services Ltd.
issued a duly signed tax invoice on 10th February showing the lumpsum
amount of ` 5,90,000 inclusive of CGST and SGST @ 9% each for the
services provided. Answer the following questions:
(i) Examine whether the tax invoice has been issued within the time
limit prescribed under law.
(ii) Tax consultant of World Fashions objected to the invoice raised
suggesting that the amount of tax charged in respect of the taxable

14
 supply should be shown separately in the invoice raised by
Glamour Beauty Services Ltd. However, Glamour Beauty Services
Ltd. contended that there is no mandatory requirement of showing
tax component separately in the invoice. You are required to
examine the validity of the objection raised by tax consultant of
World Fashions. (5 Marks)
(b) M/s Balaji Electronics, a registered dealer, is supplying all types of
electronic appliances in the State of Karnataka. Its aggregate turnover
in the preceding financial year by way of supply of appliances is ` 120
lakh.
The firm also expects to provide repair and maintenance service of such
appliances from the current financial year.
With reference to the provisions of the CGST Act, 2017, examine:
(i) Whether the firm can opt for the composition scheme, under section
10(1) and 10(2), for the current financial year, as the turnover may
include supply of both goods and services?
(ii) If yes, up to what amount, the services can be supplied?
(5 Marks)
4. (a) What is the place of supply for mobile connection? Can it be the location
of supplier? (5 Marks)
Or
(a) What would be the place of supply of services provided by an event
management company for organizing a sporting event for a Sports
Federation which is held in multiple States? (5 Marks)
(b) What are the documents and devices to be carried by person-in-charge
of conveyance under rule 138A of CGST Rules, 2017? Also explain the
meaning of consignment value of goods. (5 Marks)

15
 Mock Test Paper - Series II: December, 2024
Date of Paper: 11th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP-I

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

Division B – Descriptive Questions

1. Computation of total income of Mr. Ashok for the A.Y.2024-25
Particulars ` `
Income from house property
Arrears of rent 1,35,000
(Taxable under section 25A even if Mr. Ashok is not
the owner of the house property in the P.Y.2023-24)
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 3,500
(` 7,000/2)
- Disallowance under section 40A(3) in respect of
salary paid in cash since the same exceeds 22,000
` 10,000
1
- 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 1,20,000
(Note 2)
Salary as working partner fully taxable 1,00,000 2,20,000 7,50,700
Income from other sources
Interest on bank fixed deposit (Gross) [` 49,500 x 55,000
100/90]
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. Ashok for the A.Y.2024-25
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 liability (Rounded off) 41,580
Notes:
(1) Depreciation allowable under the Income-tax Rules, 1962
Opening Rate Depreciation
WDV/
Actual
cost
Block 1 Computers 2,40,000 40% 96,000
Computer 1,50,000 40% 60,000
printer
Block 2 Motor Car 6,80,000 15% 51,000 40,800
[50% of 15%
is allowable,
2
 since it is put
to use for
less than
180 days]
Less: 20% disallowance for 10,200
personal use
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. Ashok.
(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
Under section 80D
Health insurance premium taken for himself is 35,000
fully allowable as deduction, since he is a
senior citizen
Under section 80G
Contribution towards PM National Relief Fund 50,000
eligible for 100% deduction without any
qualifying limit
Under section 80TTB
Interest on deposits in case of senior citizen, 50,000
restricted to
Total deduction 2,65,000
2. (a) Mr. Sudesh is a non-resident for the A.Y.2024-25, since he was not
present in India at any time during the previous year 2023-24.
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.

3
 Computation of Total Income of Mr. Sudesh for A.Y. 2024-25
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. Sudesh, 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 Nil
10(7)].
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
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)
Gross Total Income/ Total Income 8,75,000
(b) Mr. Sumit has furnished his return of income under default tax regime
for A.Y.2024-25 on 22.10.2024, i.e., after the due date specified under
section 139(1) i.e., 31st July 2024. 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. Sumit for A.Y.
2024-25, 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.
2025-26. The loss of ` 2,50,000 from let out house property cannot be
carried forward since Mr. Sumit is paying tax under default tax regime.

4
 However, unabsorbed depreciation of ` 2,00,000 pertaining to
A.Y.2024-25, can be carried forward to A.Y.2025-26 for set-off, even
though Mr. Sumit has filed the return of loss for A.Y.2024-25 belatedly.
(c) (i) HFC 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 HFC 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. Chetan is a pensioner. However, Mr. Chetan has to
deduct tax at source@5% u/s 194M, since the payment to
contractor, Mr. Gopi, exceeds ` 50 lakhs.
3. (a) Computation of taxable income of Mr. Yogesh for A.Y. 2024-25
Particulars Amount Amount
(`) (`)
Income from house property (A)
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, 2024
` 20,000
Gross Annual Value 1,80,000
Less: Municipal taxes [50% of ` 30,000] 15,000
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. - -
Yogesh is paying tax under section 115BAC.]
70,500
Profits and gains from business or
profession (B)
Business Income [without deducting 2,40,000
expenditure of Unit – 2, 25% floor area used
for business purposes]
Less: Expenditure in respect of Unit -2
5
 - Municipal taxes [25% of 7,500
` 30,000]
- Repairs [25% of ` 7,000] 1,750
- Interest on loan [25% of 22,500
` 90,000]
- Ground rent [ 25% of 1,500
` 6,000]
- Fire Insurance premium 15,000 48,250 1,91,750
[25% of ` 60,000]
Taxable Income (A+B) 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. Soham
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.
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) exceed
110% of the consideration received (` 1.50 crores), business
income would be computed in the hands of Mr. Soham, for
A.Y.2024-25, taking sale consideration of ` 1,75,00,000 as the
full value of consideration arising on transfer.
II Tax consequences in the hands of Mr. Aman
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 and 10% of actual sales consideration.
Where the date of agreement is different from the date of
6
 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.
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. Accordingly, ` 25,00,000 would be taxable in the
hands of Mr. Aman under the head “Income from Other Sources”
in A.Y.2024-25 since the difference of ` 25,00,000 exceed
` 15,00,000, being the higher of ` 50,000 and ` 15,00,000 (10%
of consideration).
4. (a) Computation of Total Income of Mr. Mohan for A.Y. 2024-25
Particulars Amount Amount
(`) (`)
Income from house property
House in Delhi [Since Mr. Mohan receives
direct or indirect benefit from income arising
to his brother’s daughter, Ms. Veena, from
the transfer of house to her without
consideration, such income is to be included
in the total income of Mr. Mohan as per
proviso to section 62(1), even though the
transfer may not be revocable during lifetime
of Ms. Veena]
Gross Annual Value 1 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
Profits and gains from business or
profession
Share of profit from firm [Exempt u/s 10(2A)] -
Exempt income cannot be clubbed
Capital Gains
Long term capital gain from sale of property 15,000
Less: Short-term capital loss can be set-off 15,000 -
against both short-term capital gains and
long-term capital gains 2. Short term capital
loss of ` 16,000 set off against long-term

1 Rent receivable has been taken as the gross annual value in the absence of other information
2 as per section 74(1)
7
 capital gains to the extent of ` 15,000 3.
Income from other sources
Dividend on preference shares [Taxable in 10,00,000
the hands of Mr. Mohan 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), 75,000
since sum of money exceeding ` 50,000 is
received from his niece, who is not a relative]
Income from betting [No loss is allowed to be 34,000
set off against such income]
Income from card games [No loss is allowed 46,000 13,55,000
to be set off against such income]
Gross Total Income 18,10,000
Less: Deduction under Chapter VI-A
Deduction under section 80TTA [Interest
from savings bank account] 10,000 10,000
Total Income 18,00,000
Losses to be carried forward to A.Y. 2025-26
Particulars Amount (`)
Short term capital loss [` 16,000 – ` 15,000] 1,000
Loss on maintenance of race horses [Loss incurred on 14,600
maintenance of race 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.2025-26]

(b) First Alternative

As per sixth proviso to section 139(1), every person, being an
individual whose total income without giving effect to the provisions of,
inter alia, section 54EC and Chapter VI-A exceeds the basic exemption
limit, is compulsorily required to furnish return of income on or before
the due date.
Therefore, in the present case, Mr. Prince, a senior citizen is required
to file return of income, since his total income of ` 3,90,000 before
giving effect to the exemption under section 54EC and deduction of
` 1,50,000 under Chapter VI-A, exceeds the basic exemption limit of
` 3,00,000 applicable in his case.

3 as per section 74(1)

8
(b) Second Alternative
(i) True: Section 139A(2) provides that the Assessing Officer may,
having regard to the nature of transactions as may be prescribed,
also allot a PAN to any other person, whether any tax is payable
by him or not, in the manner and in accordance with the
procedure as may be prescribed.
(ii) False: Section 140(b) provides that where the Karta of a HUF is
absent from India, the return of income can be verified by any
other adult member of the family; such member can be a male or
female member.

9
 SECTION B – GOODS AND SERVICES TAX (50 MARKS)
SUGGESTED ANSWERS
Division A - Multiple Choice Questions
Question Answer
No.
1. (b) not a supply at all
2. (b) Tax on sponsorship services is payable by WE-WIN
Cricket Academy under reverse charge.
3. (b) mixed supply & applicable rate of GST is 18%
4. (b) ` 70,000
5. (a) ` 45,000
6. (a) Part B need not be filed in respect of transport of
consignment from Godown of Anushka to transporter
location.
7. (c) 20th December
8. (c) TDS to be deducted on entire order of 70 shields

Division B - Descriptive Questions

1. (a) Computation of net GST payable in cash by Aashima Ltd. for the
month of January 2024
Particulars CGST (`) SGST (`) IGST (`)
Outward intra-State supply 36,000 36,000
of goods made in the State [4,00,000 × [4,00,000 ×
of Bihar 9%] 9%]
[Value of supply is the
transaction value of the
goods.]
Outward supply of goods 18,000
made to other States [1,00,000
[Value of supply is the × 18%]
transaction value of the
goods.]
Services by way of 90,000
warehousing of potato [5,00,000
chips [Taxable since × 18%]
services by way of
warehousing of only
cereals, pulses, fruits &
vegetables are exempt.]
Intra-State stock transfer 1,800 1,800
to Gaya Branch with [20,000 × [20,000 ×
separate registration 9%] 9%]
10
 [Supply of goods between
distinct persons in course
or furtherance of business
qualifies as supply even if
made without
consideration.]
Total output tax 37,800 37800 1,08,000
Less: Input Tax Credit (37,800) (7,200)
[Refer Working Note (CGST) (CGST)
below]
(37,800) (7,200)
[CGST credit should be
(SGST) (SGST)
utilized for payment of
CGST and IGST in that
order. Similarly, SGST
credit should be utilized for
payment of SGST and
IGST in that order. ITC of
CGST cannot be utilized
for payment of SGST and
vice versa.]
Net GST payable in cash Nil Nil 93,600
Working Note:
Computation of ITC available
Particulars CGST SGST (`) IGST (`)
(`)
Intra-State inward supply of 45,000 45,000 --
services [5,00,000 [5,00,000
[` 6,50,000 – `1,50,000] × 9%] × 9%]
[ITC cannot be claimed on the e-
invoices without IRN since an e-
invoice without IRN is not treated
as valid document for claiming
ITC.]
Cars taken on rental basis from -- -- --
Mr. Suhaas
[Tax on renting of motor car
services wherein cost of fuel is
included in consideration
provided by a non-body
corporate to a body corporate
and invoice is issued charging
CGST/SGST @ 2.5% is payable
under reverse charge.
Time of supply of such services
is 1st February being earlier of
11
 date of payment, or date
immediately following 60 days
since issue of invoice by the
supplier. Since the time of
supply of renting of motor car
services in the given case does
not fall in January, tax liability on
the same does not arise in said
month.
Further, ITC on renting of motor
car services received is blocked
since the recipient - Aashima
Ltd. is not in the same line of
business.]
Total ITC available 45,000 45,000 --
(b) Computation of value of taxable supply made by Shri Narayan Pvt.
Ltd. to Shri Ram Pvt. Ltd.
Particulars Amount (`)
Price of the goods 1,00,000
Municipal tax 2,000
[Includible in the value as per section 15(2)(a) of the
CGST Act, 2017]
Inspection charges 15,000
[Any amount charged for anything done by the supplier
in respect of the supply of goods at the time of/before
delivery of goods is includible in the value as per
section 15(2)(c) of the CGST Act, 2017]
Subsidy received from Shri Shyam Trust 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, 2017]
Late fees for delayed payment Nil
[Not includible since the same is waived off]
Weighment charges paid to Radhe Pvt. Ltd. on behalf 2,000
of Shri Narayan Pvt. Ltd.
[Any amount that the supplier is liable to pay in relation
to the supply but has been incurred by the recipient
and not included in the price actually paid or payable
for the goods, is includible in the value of supply in
terms of section 15(2)(b) of the CGST Act, 2017]
Value of taxable supply 1,69,000

12
2. (a) Determination of time of supply:
Particulars

(i) May 12 will be the time of supply, being the earliest of the three
stipulated dates namely, receipt of goods, date of payment and
date immediately following 30 days of issuance of invoice [Section
12(3) of the CGST Act, 2017].
(ii) June 4, 31st day from the date of supplier’s invoice, will be the
time of supply, being the earliest of the three stipulated dates
namely, receipt of goods, date of payment and date immediately
following 30 days of issuance of invoice [Section 12(3) of the
CGST Act, 2017].

(b) (i) Schedule I read with section 7(1)(c) of the CGST Act, 2017, inter
alia, stipulates that supply of goods or services or both between
related persons or between distinct persons as specified in section
25 of the CGST Act, 2017, is supply even without consideration
provided it is made in the course or furtherance of business.
Further, a person who has obtained more than one registration,
whether in one State/Union territory or more than one State/Union
territory shall, in respect of each such registration, be treated as
distinct persons [Section 25(4) of the CGST Act, 2017].
In view of the same, factory and depot of Rimjhim, Manufacturers
are distinct persons. Therefore, supply of goods from Delhi factory
of Rimjhim Manufacturers to Mumbai Depot without consideration,
but in course/furtherance of business, is supply under section 7 of
the CGST Act, 2017 read with Schedule I.
(ii) Schedule I read with section 7(1)(c) of the CGST Act, 2017, inter
alia, stipulates that import of services by a taxable person from a
related person located outside India, without consideration is
treated as supply if it is provided in the course or furtherance of
business. Explanation to section 15 of the CGST Act, 2017, inter
alia, provides that persons shall be deemed to be “related
persons” if they are members of the same family. Further, as
per section 2(49) of the CGST Act, 2017, family means, —
(a) the spouse and children of the person, and

(b) the parents, grand-parents, brothers and sisters of the person if

they are wholly or mainly dependent on the said person.
In the given case, Mohan has received free of cost legal services
from his brother. However, in view of section 2(49)(ii) of the CGST
Act, 2017 above, Mohan and his brother cannot be considered to
be related as Mohan’s brother is a well-known lawyer and so, not
wholly/mainly dependent on Mohan. Further, Mohan has taken
legal advice from him in personal matter and not in course or
furtherance of business. Consequently, services provided by
13
 Mohan’s brother to him would not be treated as supply under
section 7 of the CGST Act, 2017 read with Schedule I.
3. (a) (i) As per section 31 of the CGST Act, 2017 read with the CGST Rules,
in case of taxable supply of services, invoices should be issued
before or after the provision of service, but within a period of 30
days [45 days in case of insurer/ banking company or financial
institutions including NBFCs] from the date of supply of service.
In view of said provisions, in the present case, the tax invoice
should have been issued in the prescribed time limit of 30 days
from the date of supply of service i.e. upto 3rd February. However,
the invoice has been issued on 10th February.
(ii) Section 31 of the CGST Act, 2017 read with the CGST Rules, inter
alia, provides that tax invoice in addition to other mandatory details
shall also contain the amount of tax charged in respect of taxable
goods or services (central tax, State tax, integrated tax, Union
territory tax or cess). Further, where any supply is made for a
consideration, every person who is liable to pay tax for such supply
shall prominently indicate in all documents relating to assessment,
tax invoice and other like documents, the amount of tax charged in
respect of taxable goods or services which shall form part of the
price at which such supply is made.
The objection raised by the tax consultant of World Fashions
suggesting that the amount of tax charged in respect of the taxable
supply of makeover services should be shown separately in the
invoice raised by Glamour Beauty Services Ltd., is valid in law.
(b) (i) The registered person, whose aggregate turnover in the preceding
financial year does not exceed ` 1.5 crore, may opt to pay tax under
composition levy, under section 10(1) and 10(2) of the CGST Act,
2017.
The scheme can be availed by an intra-State supplier of goods and
supplier of restaurant service.
However, the composition scheme permits supply of marginal
services (other than restaurant services) for a specified value along
with the supply of goods and restaurant service, as the case may
be.
Thus, M/s Balaji Electronics can opt for composition scheme for the
current financial year as its aggregate turnover is less than ` 1.5
crore in the preceding financial year and it is not engaged in inter-
State outward supplies.
(ii) The registered person opting for composition scheme, under
section 10(1) and 10(2) of the CGST Act, 2017, can also supply
services (other than restaurant services) for a value up to 10% of
the turnover in the preceding year or ` 5 lakh, whichever is higher,
in the current financial year.

14
 Thus, M/s Balaji Electronics can supply repair and maintenance
services up to a value of ` 12 lakh [10% of ` 120 lakh or ` 5 lakh,
whichever is higher] in the current financial year.
4. (a) The location of supplier of mobile services cannot be the place of supply
as the mobile companies are providing services in multiple states and
many of these services are inter-state. The consumption principle will
be broken if the location of supplier is taken as place of supply and all
the revenue may go to a few states where the suppliers are located.
The place of supply for mobile connection would depend on whether the
connection is on postpaid or prepaid basis. In case of postpaid
connections, the place of supply is the location of billing address of the
recipient of services on the record of supplier of services.
In case of pre-paid connections, if the service is supplied:-
(i) through a selling agent or a re-seller or a distributor of SIM card or
re-charge voucher, the place of supply is the place address of the
selling agent or re-seller or distributor as per the record of the
supplier at the time of supply; or
(ii) by any person to the final subscriber, the place of supply is the
location where such prepayment is received or such vouchers are
sold;
(iii) in other cases, the place of supply is the address of the recipient
as per the records of the supplier of services and where such
address is not available, the place of supply shall be location of the
supplier of services.
However, if the recharge is done through internet/e-payment, the
location of recipient of service on record of the supplier will be taken as
the place of supply.
Or
(a) In case of an event, if the recipient of service is registered, the place of
supply of services for organizing the event is the location of such person.
However, if the recipient is not registered, the place of supply is the place
where event is held.
Since the event is being held in multiple states and a consolidated
amount is charged for such services, the place of supply will be deemed
to be in each State in proportion to the value for services determined in
terms of the contract or agreement entered into in this regard.
In the absence of a contract or agreement between the supplier and
recipient of services, the proportionate value of services made in each
State (where the event is held) will be computed in accordance with rule
5 of the IGST Rules by the application of generally accepted accounting
principles.

15
(b) The person-in-charge of a conveyance has to carry -
(a) the invoice or bill of supply or delivery challan, as the case may be;
and
(b) a copy of the e-way bill in physical form or the e-way bill number in
electronic form or mapped to a Radio Frequency Identification
Device embedded on to the conveyance [except in case of
movement of goods by rail or by air or vessel] in such manner as
may be notified by the Commissioner
Consignment value of goods shall be the value:
♦ determined in accordance with the provisions of section 15 of the
CGST Act, 2017,
♦ declared in an invoice, a bill of supply or a delivery challan, as the
case may be, issued in respect of the said consignment and
♦ also includes the Central tax, State or Union territory tax, integrated
tax and cess charged, if any, in the document and
♦ shall exclude the value of exempt supply of goods where the
invoice is issued in respect of both exempt and taxable supply of
goods.

16