Step 1: What is the McMahon Line?
A boundary line proposed in 1914 (Simla Convention) demarcating the frontier between British India and Tibet—today corresponding to the India–China boundary along Arunachal Pradesh.
Step 2: Eliminate distractors.
It is not in J& K/UT of Ladakh (A), nor in Uttar Pradesh (C) or Assam (D).
Step 3: Conclude.
\[
\boxed{\text{Arunachal Pradesh (Option B).}}
\]