Declare @WhereClause nvarchar(max) = 'CityID=1 and CategoryID in(select CategoryID form Category where ParentCategoryID=3';
      select CONVERT(bit, @WhereClause) as Test

Msg 245, Level 16, State 1, Line 3
    Conversion failed when converting the varchar value 'CityID=1 and CategoryID in(select CategoryID form Category where ParentCategoryID=3' to data type bit.

DECLARE @CityID AS SMALLINT
DECLARE @ParentCategoryID AS SMALLINT
Declare @WhereClause nvarchar(max)
DECLARE @SQLQuery AS NVARCHAR(max)

SET @CityID = 1
SET @ParentCategoryID = 3

SET @WhereClause = 'CityID = ' + CAST(@CityID AS NVARCHAR(10)) +
' and CategoryID in(select CategoryID form Category where ParentCategoryID = '
+CAST(@ParentCategoryID AS NVARCHAR(10)) +')'

SET @SQLQuery = 'SELECT * FROM YourTable WHERE ' + @WhereClause

EXECUTE(@SQLQuery)

Declare @WhereClause nvarchar(max) = 'TRUE'
select convert( bit, @WhereClause) as Test