Assets acquired in the Previous Year but not put to use in the same Previous Year
anonymous poll

c. Is added in the block of asset but no depreciation is allowed in that PY – 52
👍👍👍👍👍👍👍 87%

a. Is not added to the block of asset – 5
👍 8%

b. Is added in the block of asset and depreciated accordingly as depreciation is allowed on the acquisition of the asset – 3
▫️ 5%

d. Depreciation is allowed at half of specified rates in that PY
▫️ 0%

👥 60 people voted so far.

1. Option d Tea Bushes and Live stock as per definition of plant u/s 43(6) plant excludes tea bushes and live stock

2. Option c is added in the block of asset but no depreciation is allowed in that PY

Determine correctness of following when all assets are sold
anonymous poll

b. The Block of asset ceases to exist and would lead to Short Term Capital Loss or Short Term Capital Gain and therefore irrespe – 18
👍👍👍👍👍👍👍 55%

c. The Block of asset ceases to exist and would lead to Short Term Capital Loss or Short Term Capital Gain but still if as per t – 7
👍👍👍 21%

a. The Block of asset is continued only for depreciation purposes – 6
👍👍 18%

d. The balance if any in the block does not require any treatment and is a dead Loss/Gain. – 2
👍 6%

👥 33 people voted so far.

Who is entitled to claim depreciation in case of an Operating structure of a Leasing arrangement of a vehicle registered in the name of the lessee and the lessor is not the actual user of the vehicle?
anonymous poll

d. Lessor – 32
👍👍👍👍👍👍👍 76%

c. Lessee – 4
👍 10%

a. Allowed to the person who capitalises the asset in his books of account – 3
👍 7%

b. 50% allowed to the Lessor and 50% to the Lessee – 3
👍 7%

👥 42 people voted so far.

Determine correctness of following when all assets are sold
a. The Block of asset is continued only for depreciation purposes
b. The Block of asset ceases to exist and would lead to Short Term Capital Loss or Short Term Capital Gain and therefore irrespective of the Period of Holding of the asset Deduction u/s 54EC cannot be taken on the said transfer
c. The Block of asset ceases to exist and would lead to Short Term Capital Loss or Short Term Capital Gain but still if as per the Period of Holding of the asset it is Long Term Deduction u/s 54EC can be taken on the same
d. The balance if any in the block does not require any treatment and is a dead Loss/Gain.

1. Option c the block of asset ceases to exist and would lead to STCL or STCG but since period of holding is long term deduction u/s 54EC can be claimed.
2. Option d Lessor since ownership lies with him in operating lease

The assessee introduced his residential building as office premises on 1/4/2018. The fmv of building was Rs.15 Lakhs. The building was purchased in 2015 for Rs. 10 Lakhs. Determine the cost at which building would be recorded in books of sole proprietor.

Select from following
anonymous poll

15 Lakhs – 21
👍👍👍👍👍👍👍 62%

8,10,000 – 7
👍👍 21%

10 Lakhs – 6
👍👍 18%

12,15,000
▫️ 0%

👥 34 people voted so far.

Examine the correctness of the following
anonymous poll

A power generating and distribution company can only charge depreciation on SLM basis u/s 32(1)(i) – 14
👍👍👍👍👍👍👍 38%

A power generating and distribution company can only charge depreciation on SLM basis or WDV basis u/s 32(1)(i) – 13
👍👍👍👍👍👍👍 35%

A power generating and distribution company can only charge depreciation on SLM basis or WDV basis provided it exercises the opt – 10
👍👍👍👍👍 27%

None of the above
▫️ 0%

👥 37 people voted so far.

1. Option 3 - 8,10,000 (10L-depn for 2 yrs) as per explanation 5 to sec 43(1) in case Where a building which was previously the property of the assessee is brought into use for the purposes of the business or profession, its actual cost to the assessee shall be the actual cost of the building to the assessee, as reduced by an amount equal to the depreciation calculated at the rates in force on that date that would have been allowable had the building been used for the purposes of the business or profession since the date of its acquisition by the assessee

2. Option 3 - a power generating co can charge depreciation as per SLM or WDV method provided it exercises the option before due date of filing ROI

In case of purchase of second hand asset purchased at Rs. 60,000 (original cost Rs. 40,000), what would be the cost to the assessee for depreciation
anonymous poll

1. 60000 – 14
👍👍👍👍👍👍👍 64%

3. AO with approval of JCIT can determine the cost – 6
👍👍👍 27%

2.40000 – 2
👍 9%

4. FMV as on date of transfer
▫️ 0%

👥 22 people voted so far.

The assessee dealer in buildings converted it as its fixed asset on 1/4/18. FMV as on that date was Rs.7 Lakh. Cost of shares was Rs.2 Lakh. What would be the depreciation and income taxability
anonymous poll

1. Depreciation 70,000 and income 5 Lakh – 14
👍👍👍👍👍👍👍 78%

2. Depreciation 20000 and income Rs. 7 lakhs – 2
👍 11%

3. Depreciation 70,000 and income Rs. 7 lakhs – 1
👍 6%

4. Depreciation Rs. 20,000 and income nil – 1
👍 6%

👥 18 people voted so far.

Since we have touched upon many MCQs since last 3 weeks. I would like to know reviews, suggestions and feedback or ur doubts. Also would request you to participate for your benefit. Telegram me on my id: prernaP

Answers
1. Option 3. - AO with approval of JCIT can determine the cost if he thinks that the transfer has been made for the purpose of claiming higher depreciation- as per Sec.43(1)

2. Depreciation 70000 as per Sec.43(1) and income chargeable u/s 28(via) - 5,00,000- FA 2018 amendment

Mr. C was using vehicle for his business (acquired for Rs.10 Lakh in 15-16) and transferred to Mr.D for Rs.7 Lakh in 2016-17, re-acquired again at Rs. 8 Lakh on 1/8/2018. What would be depreciation.
anonymous poll

A. 1.275 – 8
👍👍👍👍👍👍👍 38%

C. 1.05 – 7
👍👍👍👍👍👍 33%

B. 1.2 – 6
👍👍👍👍👍 29%

D. 1 Lakh
▫️ 0%

👥 21 people voted so far.

ABC Ltd. had plant in 2016 for Rs.10 Lakhs. It transferred to XYZ Ltd in 2017 for Rs. 8 Lakhs. ABC Ltd. then acquires the same asset back from XYZ Ltd. on lease of Rs. 60K pm in 2018. Determine correctness of following
anonymous poll

B. XYZ would claim depreciation on cost of Rs. 8 Lakh – 11
👍👍👍👍👍👍👍 46%

A. XYZ Ltd. will claim depreciation on cost of Rs. 8.5 – 7
👍👍👍👍 29%

C. ABC Ltd. would be entitled to depreciation – 6
👍👍👍👍 25%

D. None of above
▫️ 0%

👥 24 people voted so far.

1. Option B- 1.2 Lakh - Where any asset which had once belonged to the assessee and had been used by him for the purposes of his business or profession and thereafter ceased to be his property by reason of transfer or otherwise, is re-acquired by him, the actual cost to the assessee shall be —
(a) the written down value at the time of original transfer; or
(b) the actual price for which the asset is re-acquired by him (whichever is less) (Explanation 4 to S.43(1))

2. Option C - XYZ Ltd. would claim depreciation on cost of Rs.8.5 Lakh - before the date of acquisition by the assessee say, Mr. A, the assets were at any time used by any other person, say Mr. B, for the purposes of his business or profession and depreciation allowance has been claimed in respect of such assets in the case of Mr. B and such person acquires on lease, hire or otherwise, assets from Mr. A, then, the actual cost of the transferred assets, in the case of Mr. A, shall be the same as the written down value of the said assets at the time of transfer thereof by Mr. B (Explanation 4A to Sec.43(1))

Depreciation was claimed on discarded assets of Rs. 1 Lakh. No salvage value was received. Examine the correctness of following. The rest of the block is still used for business
anonymous poll

A. Depreciation shall be allowed on discarded asset as no money was received – 17
👍👍👍👍👍👍👍 45%

B. No depreciation can be claimed on discarded asset – 13
👍👍👍👍👍 34%

C.The depreciation shall be claimed till the date asset is discarded – 5
👍👍 13%

D. None of the above – 3
👍 8%

👥 38 people voted so far.

The assessee had debited Rs. 3 Lakhs being loss due to destruction of machinery destroyed by fire. Examine the correctness of following
anonymous poll

C. The loss shall not be allowed as deduction but depreciation of Rs.45000 would be allowed – 21
👍👍👍👍👍👍👍 36%

A. The loss shall be allowed as deduction being business loss u/s 28(i) – 17
👍👍👍👍👍👍 29%

B. The loss shall not be allowed as deduction being capital loss – 14
👍👍👍👍👍 24%

D. Loss as well as depreciation of Rs. 45,000 would be allowed – 7
👍👍 12%

👥 59 people voted so far.

1. Option A. Depreciation shall be allowed on discarded asset as no money was received

2. Option c the loss shall not be allowed as deduction but depreciation of Rs. 45000 would be allowed