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To add to this, "Are you now?" could also basically mean the same thing as "Are you?," with the "now" adding emphasis or a bit of a sarcastic tone (i.e., the "now" wouldn't refer to time):
Child: "I'm a two-headed unicorn monster!"
Parent: "Oh, are you now?"
The acceptability of this usage may be heavily dependent on your dialect - it sounds fine to my British English ear. Not sure how it would sound to speakers of American English or other dialects.
It's common in American, too. I would say we'd be more likely to use it to someone we don't respect than to a child, though:
Grown Man: I am an expert in Kame-Sennin Ryu.
Me: Are you now?
This usage is what came to my mind too
The other comments are correct, and I just want to add that it has a slightly patronizing or hostile tone, as if you are questioning someone’s statement or asking them to consider if they are truly correct. Ex: “I would know, I’m a lawyer.” “Are you now? You don’t sound like one.”
It could, but it could also be neutral depending on context, as in amazondrone's answer.
The key may be tense:
"I was.... "; "Are you now?" -- neutral
"I am..."; "Are you now?" -- patronizing
Yes, I can certainly conceive contexts where this would make sense, e.g.: